"Is everything going to be OK, Dad?"

My son asks me this question on the ride back from the beach Sunday afternoon. While listening to Bloomberg radio for the entire two-hour drive yesterday, I had no idea he was paying attention to the commentator and expert guests. He is 10 years old, for heaven's sake. Why should he have to worry about our economic future?

Well, it wasn't easy trying to explain how we got where we are. And it wasn't easy trying to convince him that things will be OKafter hearing that European regulators are doing whatever they can to help avert a financial meltdown there. But I tried.

I explained that things will get uglier before they get better. But the sun does eventually shine after prolonged rain storms. And it will shine here as well. "America will be ok, buddy."

Nowhere to Hide

Here is the rub, however. You may have noticed that I have refrained from making any trading recommendations for the last few weeks. I have refrained from doing so on my daily television show appearances as well. There is a reason. I take this column and television very seriously. I know people read my column and watch me on TV for fresh ideas but now is not the time to take chances.

There are those who would have you buying and hoping for a bottom. I will not. There are those who would have you shorting stocks, ETFs or indices ... I will not. You see, when the markets are bad, everyone gets hurt. Bulls get beat up and bears get stopped out with losses. There are no hiding places.

Can't Come Out and Play

Commodities are contracting, equities are falling and surefire "safe havens" aren't safe. Case in point -- gold has been on a losing streak in an environment that should be extremely friendly to the metal. There are no real places I would invest my sons money, so I will not recommend any here. Not yet.

There will be a trade, a time when things sort themselves out, but be wary of recommendations in a really ugly market. This is as ugly as they get -- be warned. Stay nimble, stay in cash.

Cut Losses; Pare Down

My portfolio has been trimmed down dramatically. I took as much risk off the table as possible. Three weeks ago, I thought mid-cap stocks might be bottoming, so I started to buy SPDR Mid Cap 400 ( MDY), the ETF that tracks mid-cap stocks.

As the financial crisis evolved and Washington began spinning, I took a fast loss and am better off for doing so.

I also cut losses on Energy Select SPDR ( XLE). I closed out most of my energy exposure and remain very light there. I still have, although limited, exposure to homebuilders and financial's. The portfolio is pared down to about 5% equities.

Bet on a Happy Ending

I mentioned in an earlier column and on TV that I have moved much of the portfolio into three-month Treasuries at 80 basis points. It is unbelievable that a three-month T-Bill fetches only 80 basis points! And, for the first time in many years, I returned to the muni bond market with a purchase of a New Jersey bond insured by the new Warren Buffett entity that insures high-quality municipal bonds.

Scared? Perhaps, but when my 10-year-old son asks whether everything is going to be OK, I need to be able to look him in the eye and answer honestly: Yes, it will be OK again. In the meantime, preserve capital and play defense.

There will be trading opportunities in the future. Many great trading opportunities lie ahead, but for now, the best trade is no trade.

Trade with your head, not over it.

At time of publication, Bolling was long XHB, XLF, T-Bills, and NJ State Education Bonds, although holdings can change at any time.

Eric Bolling is a host on the new Fox Business Network. Bolling was one of the developers and original panelists (nicknamed "The Admiral") on CNBC's "Fast Money."

Bolling is an active trader specializing in commodities, resource trades and ETFs.

Bolling is a member of several exchanges including The New York Mercantile Exchange (NMX), The Intercontinental Exchange (ICE) and The Commodity Exchange of New York.

After spending 5 years on the Board of Directors at the NYMEX, he became a strategic adviser to that Board of Directors where he assisted in bringing the company (NMX) public. He has been included in Trader Monthly Top 100 in 2005 and 2006. Bolling was the recipient of the Maybach Man of the Year Award in 2007 for his contribution of philanthropy and willingness to de-mystify investing to Main Street.

Bolling graduated from Rollins College in Winter Park, Florida and was awarded a fellowship to Duke University. Bolling was an accomplished baseball player. He was drafted by the Pittsburgh Pirates where he played before his career was cut short due to injuries. He honors his baseball past by sporting the NYMEX trader badge, R.B.I.

More from Opinion

These 5 Tech Giants Still Aren't That Expensive

These 5 Tech Giants Still Aren't That Expensive

Intel CEO Brian Krzanich's Ouster Proves CEOs Aren't Above the Rules

Intel CEO Brian Krzanich's Ouster Proves CEOs Aren't Above the Rules

Red Hat CFO Tells TheStreet: Tech Trends Are Still in Our Favor

Red Hat CFO Tells TheStreet: Tech Trends Are Still in Our Favor

Throwback Thursday: Intel Edition

Throwback Thursday: Intel Edition

Intel's Next CEO Should Try Harder to Protect Its Flanks Against AMD and Others

Intel's Next CEO Should Try Harder to Protect Its Flanks Against AMD and Others