I don't care to try to predict if we're heading into recession or how bad that recession will be. I have no idea where the market will bottom or how long it will take to get there; the one thing I do know is that stocks are going to continue to get wrecked, whether or not we have a short-term bounce. Amazingly, it's been just eighteen days since I warned investors the market would drop 10% in 2008 and now we're already there. I've considered buying quality growth stocks like Mosaic (NYSE: MOS), Monsanto (NYSE: MON), Sigma Designs (NYSE: SIGM), Priceline (NASDAQ: PCLN), BE Aerospace (NASDAQ: BEAV), Vistaprint (NASDAQ: VPRT) and Lululemon (NASDAQ: LULU) on weakness, but their continued downtrending has made them falling knives, aka, too unpredictable for me.

My fellow blogger Lita Epstein has talked about picking up bargains on beaten stocks with strong fundamentals. I disagree with her. While maybe her statement applies to a precious few like Apple (NASDAQ: AAPL) and Amazon.com (NASDAQ: AMZN), I don't care how great those companies are, we're looking at a housing collapse and a massive slowdown in consumer spending which will hurt even the best of companies. For now, forget about stock picks; this is not the time for speculation. If foreign stock markets have tanked this hard on U.S. recession fears, imagine how hard U.S. stocks will get hit -- why not protect yourself and respect the downside for once?

Now, I'm not saying you should all out panic -- who really knows what to do here? I don't -- but I'm simply very comfortable sitting on the sidelines. And please don't automatically assume we'll get a 1987-like immediate recovery. No industry whatsoever looks immune to this seemingly now global epidemic and all these greedy over leveraged speculators holding illiquid and opaque investments-financial firms like Citigroup (NYSE: C), E*Trade (NASDAQ: ETFC), Merrill Lynch (NYSE: MER), MBIA (NYSE: MBI) and Countrywide Financial (NYSE: CFC) right alongside the house flippers and investors who reason "housing prices will eventually come back," have yet to atone for their sins.

But we Americans are an optimistic bunch, and just as we believed we were immune to terrorist attacks on our home turf before 9/11, many will buy blindly into this panic on a bet that our economy will be fine. Sure, they might be right, but they force me to play devil's advocate -- not crazy perma-bear devil's advocate -- by advising you to prepare for the worst, just in case. It's important to remember the housing bubble-induced recession that plagued Japan lasted an entire decade. Sure, there were bounces along the way, but the overall trend was overwhelmingly negative. Who knows, maybe the real bargains won't be until Dow 10,000. Crazy, right? But guess what, it's possible. Never underestimate the power of fear during a panic.

After all, even if we do get a bounce, where are we going to go from there? Even with the Dow at 11,500, we're still less than 20% off our highs, highs I exceedingly doubt we'll see anytime soon. I'd say we have another 15-25% short-term downside (if we give panic its due) and really only 5-10% upside. With those odds, it doesn't sound like buying blindly here is such a great proposition after all.

Timothy Sykes writes the blog timothysykes.com, is a former hedge fund manager, star of the TV show Wall Street Warriors and author of the book, An American Hedge Fund: How I Made $2 Million as a Stock Operator & Created a Hedge Fund