Wow, that was quite a day. The closing numbers in no way describe the roller coaster ride: the Dow had a range of 12404.82 - 12580.35 (!) and closed at 12474. Barry Ritholtz at the Big Picture had a nice summary of the day's news. The usual dip buyer(s) showed up around 3 and pushed the Dow and Naz back into positive territory.
After going up yesterday when the US markets were closed, gold and silver took a brutal beating. The HUI went down 4% to below its 50 and 200 dma. This sets off an alarm bell for me and I sold my EGO and HL which I picked up during the last couple of weeks. They were showing a small profit and I loath to let a gain turning into a loss. I also bought some protective puts on GDX, although only half of the order was filled. This is probably the extent of the defensive action I'll take for my PM positions. Until HUI breaks the recent low of 312, the bull trend is still intact, and I know I'll be quick to jump back in precisely because I'm ready to take defensive action to limit my downside when I get it wrong.
Anyway, it was almost too much action for the first trading day of the year. Now let's see if this volatility sets the tone for the rest of 2007. Good luck and be safe!