“We saw the beginning of a selling panic today,” a semi-retired Ft. Lauderdale, Fla., trader, Fred Guerin, told me in an e-mail message Friday. “The $64,000 question is how long will it last? That’s what people want to know, and that’s what you should be writing about.”

He’s right about panicky selling. Struck by a leap in the price of oil during the day to a record $139.01 a barrel and a surge in unemployment to 5.5%, the highest level in 22 years, investors Friday went on a selling binge, knocking down the Dow Industrials a wicked 394 points, or 3.1%, to 12,209.81. Earlier in the session, the Dow was off more than 400 points.

At some point, the market will rally — it always does after a big decline — but with the negatives outweighing the positives, a number of pros suggest there’s scarier times ahead and likely more bouts of panic selling. For example, global whiz George Soros is telling one and all: “We’ve seen just the first part of the bear market.” He also says he’s fearful that “the oil bubble may trigger a recession.”

Veteran investment adviser Joe Granville is another Gloomy Gus, warning that “we’re in what could be the worst and longest bear market in history.”

Liquidity tracker Charles Biderman, who frequently shifts gears based on the latest liquidity trends, describes himself as fully bearish and recommends a market strategy of 100% short (a bet stock prices will fall). Mr. Biderman, skipper of TrimTabs Investment Research in Santa Rosa, Calif., lays out his dark case as follows: Data show no sign the economy is improving even though it has been a recipient of a huge boost from fiscal and monetary stimulus; new cash takeovers have been practically nonexistent for the first time since the start of 2002, and the oil bubble is going to burst.

Against this backdrop, investors are facing a bevy of worries. Chief among them: an impending rash of significant bank write-downs of problem assets; mounting job cuts; nonstop credit problems; no letup in the decay in the housing market; skidding consumer confidence; an outburst of rising prices, especially for food and gas; the probability of a sharp slowdown in consumer spending; swelling global inflation, and the likely end of the rate-cutting cycle.

Given the plethora of such negative sentiment, contrary thinking might suggest the stock market is headed higher. Not this time, San Francisco money manager Gary Wollin says. “The outlook is still gloomy; it’s time to flee to the sidelines,” he says. Based on his recent track record, the views of Mr. Wollin, who manages close to $100 million in assets under the banner Gary Wollin & Co., merit an earful. Although basically negative the past nine months, he has made a series of bullish and bearish calls that have enabled him to outpace the general market. His firm is up about 3.5% this year, following a 10.2% gain in 2007.

“I certainly wouldn’t buy here,” he says, adding: “It makes absolute sense to keep your powder dry because there’s enough negative stuff out there to cause any sane investor to back off.”

Arguing that the market is still in a bottoming phase, he contends several negative trends — unemployment, real estate, inflation, and banking’s reluctance to lend — figure to get progressively worse. These old negatives as well as the new negatives — such as the end of rate cuts, the necessity of raising huge amounts of capital to stabilize banks and brokerages, the probability of some small- and mid-size bank failures, the likelihood of growing defaults on credit card debt, and a likely host of store closings — still have to work their way through the system, he says. “We’re looking at a negative cascade, and that cascade is not yet reflected in the market,” he says.

Mr. Wollin says he is convinced “there is still a real estate panic on the downside.” Given the sagging economy, he also says he believes the jobless rate will approach 6% before year-end.

Given his grim outlook, he says he expects the Dow to soon break below its 2008 low of 11,740 (that was in March) and then fall to 11,500, or possibly to 11,000, before year-end. Putting his money where his mouth is, he hasn’t bought a stock in around a month, he says, and has boosted cash reserves to 25% from his usual 5%. “I’m wary, but how can you not be in this market?” he says.

His favorite stocks — the names he thinks are the ones to own once sunnier times return — are Procter & Gamble, Johnson & Johnson, 3M, Exxon Mobil, Chevron, Rowan Cos., and Helmerich & Payne.

Because four of these stocks are energy-related, I asked about the obvious risk in the event that crude prices tumble. “So what if oil prices come down?” he says. “Some speculative money is coming out of oil, but long-term the trend remains up because people in fast-growing China and India will demand more and more of it.”

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