It's a Selloff, No Matter What You Call It

This column was originally published on RealMoney on Nov. 27 at 1:54 p.m. EST. It's being republished as a bonus for TheStreet.com readers. For more information about subscribing to RealMoney, please click here.

On days like this, we are often told that we shouldn't worry too much because "it's just profit-taking." Of course it is profit-taking. What else could it be?

Trying to minimize the action by calling it profit-taking doesn't help us at all. What we really want to know is how long it will continue and how deep it will go. Are there plenty of patient bulls with sacks of cash waiting on the sidelines to take advantage of this profit-taking action?

Maybe, but I don't know if we can dismiss this aggressive selloff as just some run-of-the-mill profit-taking. This sort of selling can change the character of the market quite a bit. Suddenly all those chest-thumping bulls who want to tell us how the market was going to go up without a pause are thinking that maybe they should take a little off the table when things recover. And the dip-buyers who were so anxious to buy weakness are going to have some second thoughts about that course of action if the downside pressure continues.

I don't know how this will play out, but I do know that there is likely to be a greater amount of hesitancy about chasing parabolic moves and technically extended stocks. My game plan at this point is to look for shorts in individual stocks that are starting to break down. I'm not interested in trying to buy pullbacks, simply because most stocks that are pulling back have yet to find support.

Maybe there will be some good buys among the likes of Google(GOOG Quote), NYSE Group(NYX Quote), Research In Motion(RIMM Quote), Apple(AAPL Quote) and other high-momentum stocks, but most are still very extended, and I would move slowly.