Joshua Hayes'  Instablog

The market got a double dose of bad news as Greece inches closer to a Euro exit and Italian short-term bond yields jump. Volume rose on the NYSE by a small fraction, but fell over on the NASDAQ. Italian CDS along with Spanish CDS jumped on the day as yields rose for both countries. Traders and investors continue to pound on the PIIGS for their troubles and the global markets are reacting negatively. To highlight the fear VIX jumped to multi-month highs. Everything in the market as well as commentary points to very bearish outcome.

There are plenty of reasons for this market to turn lower. A Greece exit is projected to be a very costly, but may be necessary venture. In the long run it may be the best case scenario to stop endless bailouts. In addition, the market is sniffing out the ramifications of the fiscal cliff the United States is headed towards. Higher taxes and lower spending to curb deficits will certainly lead to an economic slowdown. When you include government spending in GDP (remember, government has to take from corporations and consumer) of course when government spending is contracting so will the economy. There isn't much other than taking our medicine we can do to avoid the inevitable.

One saving grace in the near term is the oversold conditions we have in the market currently. While conditions can remain oversold for quite some time coupled with the overwhelmingly bearish talk and lack of bulls it would not be inconceivable for a rally to occur. Shorting at obvious times tends to end in disaster for many. Have a game plan and execute it flawlessly.

Over the next 24 hours at some point Greece will decide one way or another if they will pay more than 400 billion dollar principle payment. It'll be interesting to see if they are going to pay it or not as it will be a significant headline driving the morning buzz regarding the market. It wouldn't surprise me if somehow the Greeks were allowed an extension or some sort of relief to avoid a potential disaster. Have a game plan and leave the guess work to CNBC's market pundits.

Cut your losses short and enjoy this market.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.