If you look at a 400+ point drop, it's usually scary. But longer-term investors get to make their picks and entry points on such days. We would look at the CBOE Volatility Index for an inference today and here is a full article from earlier with more details and exact reference to past VIX levels if you like to delve into the minutia that technical traders look into. The DJIA is now down over 400 points, and very few can accurately pick a bottom or a top. Calling for any exact level for a bottom or top is something that very few can do with success. It's finding your comfort zone and trying to get in a trend that is usually what is the most rewarding for investors.

Remember, there is always the "GO DEFENSIVE STRATEGY" in stock buying. If you will recall, we gave a list of many defensive stocks and even hit a list of second-line defensive stocks for a crummy market. If you want to be an aggressive buyer of individual stocks and say, "Damn the torpedoes, full speed ahead!" then you can probably always go back to Cramer's New Four Horsemen of Tech or can even go look at his top 9 picks for 2007.

Of the 30 DJIA components, six were in positive territory this morning. As of now, Proctor & Gamble (NYSE: PG) is the only one in positive territory. When was the last time you saw Exxon Mobil (NYSE: XOM) down over 6% in a day? Microsoft (NASDAQ: MSFT) and Intel (NASDAQ: INTC) shares are down roughly 3% today, but has the outlook for PCs and software really changed in the last week or so? With shares of McDonald's (NYSE: MCD) down almost 4%, you'd think the market is worried that they have subprime woes or super risky derivatives posing risk. Along with other financials Citigroup (NYSE: C) shares are down big with more than a 4% drop. Bear Stearns (NYSE: BSC) is down over 6.5% to a new year low, although it isn't a DJIA component.

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Stock and bond market volatility has picked up the past few weeks as the yield on the ten-year bond increased from 4.6% to 5.14%, a big increase in what has been a mundane long-end of the curve for quite some time.

Pretty much following the bursting of the tech-telecom bubble and 9/11, the bond market has been stuck in a very tight trading range. Investors developed a Pavlovian response running into bonds on any bad financial news or events surrounding oil or terrorism. However, it appears that this might be about to change. The 10-year bond is oversold and due for a considerable rally, but after a bond market rally, look for a behavioral shift to equities to begin.

The returns for equities will be too promising to pass up and greed will win out over fear. Do not read too much into the recent selloff in bonds. Too much of the asset-allocation pie was directed into bonds, it is time for it to shift back into equities.

Goldman Sachs Group Inc (NYSE: GS) reported, as has become usual the past few years, terrific results. However, analysts are becoming skeptical.

The terrific results

• Revenue and earnings up 35% and 31%, respectively
• Return on equity was 38%, a massive number
• Trading and principal investments were up 35%
• Equities were up 26% -- principal trading

Planet earth results

• Equity commission up 3% -- up essentially the rate of inflation
• Assets under management grew 6% -- roughly in-line with money supply growth
• Employees up 2%

What these numbers tell you is that Goldman makes most of it money from taking risk. Especially in the fixed income, currency and commodities businesses or what is now called the FICC businesses.

The so-called FICC business you will be hearing a lot more about during the next year or possibly the next few days. That is where all the subprime and prime mortgage trading occurs. All the major Wall Street firms now group their businesses this way. This is where all the leverage trading occurs for the house account.

As we started blogging about a few months ago, be careful of the major brokerage firms. They reported tremendous results during the earlier part of this decade primarily due to fixed income profits. This is now coming to an end. Unless stock commissions go through the roof, these companies are going to have a tough time growing earnings.

Yahoo!, Yahoo!, what did you do?

While I busy myself composing a nursery rhyme about Yahoo!'s deadly warning of an hour ago, I'm looking at the red numbers on my monitor. (What rhymes with "Project Panama"? Ooh, I can just rhyme with "unforeseen delay.") Yep, Yahoo! Inc. (NASDAQ:YHOO) is not looking good, down $3.57, or 12.3%, and flirting with its 52-week low of $24.91. Google Inc. (NASDAQ:GOOG) down 4%, or $16.54, to $398.15 (break on through to the other, other side!). eBay investors are slamming their portfolios, too, selling off eBay to the tune of a drop of 82 cents, or 3%, to $26.02.

Yahoo!'s position as bellwether certainly has a storied history; I remember oh-so-well those heady days in early 1999 when I sat in Jeremy Siegel's finance class at Wharton and watched Yahoo! soar to ever-dizzier-heights, rising and falling $100, $200 a share in a single day. It was crazy, and the company always lead the market. That was long before the advent of a public Google; and it's interesting to see how Google and Yahoo! are interacting now that the two of them share a sector on the NASDAQ.

Yahoo! is to blame, that's for sure. It's the company's failure to grab revenue from the ever-luscious but hard-to-handle local classifieds. It's the terrifically unreliable growth. More than anything, it's the "confusion and delay" caused by the unknown future of Project Panama.

It's all Yahoo!'s fault.