Well, that happened sooner than expected. The presidential election is still two weeks away, and the chattering classes are still talking of binders of women and horses and bayonets. But investors have decided now is the time to start worrying about the fiscal cliff of tax hikes and spending cuts worth nearly 5% of GDP set to hit on January 1. Plus, we're likely to hit the U.S. Treasury's $1.6 trillion debt ceiling sometime in January or February. 

As I'll explore in my column later this week, expectations are that Congress and the White House will come together to agree on a $300 billion fiscal cut. That will be worth up to a 3.4% drag on GDP growth next year at a time when the economy is sputtering along at a 1.3% annual growth rate. Mix that with disappointing Q3 earnings as corporations keep pulling back on capital investments and start slashing headcounts again, and you have a toxic brew investors are selling into.

Here's why it's likely to continue.

First, I must admit I didn't expect the selling to come so soon. Key cyclical issues like energy and steelmakers were perking up last week in what I thought was one more upward surge before the darkness fell. I was wrong. It was a head fake.

I have no problem, especially in this jumpy, volatile environment, admitting mistakes and adjusting. That's the cost of not buying and holding. But it also led my holdings to a 9% gain in September. And clearly the evidence now is that stocks are going to extend to the downside.

For one, key technical support was steamrolled this morning. The Dow Jones Industrial Average fell away from its 50-day moving average like the Red Bull Stratos jumper, taking out its lower Bollinger Band like it wasn't even there. This level, a measure of volatility, is typically taken out like this during downtrend initiations.

There's more. Haven assets like Treasury bonds and the U.S. dollar are perking up. Energy has whipsawed and, after leading the way higher last week, is leading the way down now. Commodities are under pressure. Breadth is deteriorating as more and more issues participate to the downside.

It's possible that a Spanish bailout announcement, Greece's receiving its next bailout tranche, or some stimulus measure out of China will ease the logjam. But with investors growing increasingly focused on the fiscal cliff -- for which there is no easy solution and little political cohesion -- it suggests the selling is set to continue through the end of the year.

I'm recommending my newsletter subscribers and money management clients pivot into new positions, including ProShares UltraShort Oil & Gas (DUG), ProShares UltraShort Brazil (BZQ) and Direxion 3x Treasury Bull (TMF).

Be sure to check out Anthony's new investment newsletter, the Edge, and his money management service, Mirhaydari Capital Management. A two-week free trial has been extended to MSN Money readers. Click the link above to sign up. Mirhaydari can be contacted at anthony@edgeletter.c​​om and followed on Twitter at @EdgeLetter. You can view his current stock picks here. Feel free to comment below.