Holy Schnikes!

That is a Tommy Boy reference for the uninitiated. You know who you are.

Wait...you mean owning stocks involves risk? Yes. Surprise, surprise. The Shanghai market fell apart to the tune of 9% Tuesday which had ripple effects around the globe including the good ole US of A. Let's have some perspective though...the Chinese market had risen 13% in the prior two weeks and was up 120% last year so that isn't exactly a disaster. The word is that Chinese officials are considering measures to stamp out excess speculation and easy some of the "easy money" policies that are overheating the local economy. Nothing tangible is really known and officials have denied plans to institute a capital gains tax there that would certainly induce additional selling.

The US market had enjoyed a very long streak with no daily losses of 2% so we were certainly due. Whether you want to blame China or Greenspan uttering the R word or the fiasco that is occurring in the subprime mortgage market - it doesn't really matter. We have been due for a correction and we are getting it now. Quite quickly. The question now is whether this is just a normal correction within a bull market (defined as a decline of 10% from the highs) or the start of something more sinister - i.e. a bear market (defined as a decline of at least 20% from the highs).

Impossible to say at this point but defense is the name of the game until we know more. I took my hits last week along with everyone else. I suppose I am fortunate to be up 5% for the year still versus the Nasdaq being down 2%. But it is going to be challenging to keep my lead if things don't ease up a bit. As I write this, overnight futures are suggesting a weak open Monday morning. My hope is we open down big and then bounce as more weak hands are shaken out. That would be the best scenario - which means it probably won't happen.

Going to be challenging. Hmmm...there's that word again.

Oh...and the CNBC contest starts tomorrow. Just in time. I need more national exposure. ;)