All bets are off (the table)
Early warning shots over the bow were the breakdowns of various market leaders; for example, Symantec/SYMC and especially eBay/EBAY (and the fact that EBAY again rolls over). More recently, there is the volume-deficient throw-back rally in favored investment, Starbucks/SBUX. In addition, Google/GOOG has today breached its intermediate term line of support. (I have sold these last two stocks.) Moreover, Apple/AAPL too looks set to suffer a bout of 'sudden failure'. Although other favored investments (Cheesecake Factory/CAKE, Johnson & Johnson/JNJ, and Whole Foods Markets/WFMI) continue to make new all time highs, their trends could be tested in the short term. Obviously, this grocery list purposefully highlights the market's leaders, not its coevals, laggards, and sluggards because I prefer my investments to be market (and markets') leaders.
What causes this sudden bout of market consternation and personal angst? The increasing price for oil and other commodities, the failure of the US$ to abort its long term down trend (and instead to renew it), and the sudden and ferocious ratchet upwards of interest rates in the credit markets. Treasury notes and bonds are now at yields not seen for 6-8 months. Do not take solace that this move upward in yields is only to 6 month highs; instead consider the change in direction, the ferocity with which it occurs, and the likelihood that this new trend, if not its trajectory, will continue. Higher rates mean a slower economy, albeit with a lag. But when the investor admits to the leverage inherent in today's economy...
Conflated by stock valuations that are stretched, the market likely will decline soon. And hard. But as hard as this potential decline might be, it will mask the exsanguinating that individual stocks will suffer. And of course, that hiss (you soon will) hear will be the air escaping from the balloon that is the real estate market. (Yeah, yeah, I know -- but I just had to slip in that comment! ;-)
Each of us have our own risk tolerances and time frames. Even should the markets suffer a nasty decline they also will recover. Perhaps to recovery highs. And of course there always will be specific stocks, groups, and sectors that rise in the face of a general market decline. Day-to-day oscillations in the markets tend to mask what really transpires under the surface (the averages); in the near future, carnage on the margin.
So as I mentioned, this post serves as a warning of risk, not a prediction of direction.