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Traders trying to pick bottoms in this commodity free-fall had a tough day. NYMEX crude

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[US@CL.1  Loading...      (%)] futures suffered their biggest one day dollar drop since 1991--falling as much as $7 this afternoon.

"This is big. It's a serious unwinding," says Addison Armstrong, director of research at TFS Energy. Liquidation was rampant across the board in the energy complex--with gasoline and natural gas down about 7 percent, heating breaking its record-setting streak by falling 3 percent just 15 minutes before the end of the open outcry session. "It's a run on the bank," Armstrong says.

And here's why: If you're an investor getting hit on all sides, you want need to access money quickly--particularly if you have to cover margin calls in other investments. So the thinking is, let me get to that money and get it out. Liquidate profitable positions in oil, energy and other commodities.

Even gold is well off its highs of the day. It hit a record $1034 in the wee hours of the morning, but is barely holding above $1000 right now. Still the bullion is seen as the best inflation hedge.

So what happens next? Traders are bracing for more heavy selling in electronic trading after-hours and into tomorrow. Volume is very big today and the selling was broad-based.

But after today's rout, some floor traders say they're more likely to stay to the sidelines than stick their necks out again. Says Citi energy analyst Tim Evans: "It's increasingly looking like cash is the place to be."

Questions?  Comments?  energysource@cnbc.com

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