Nothing unusual, it's common, the ranking position fluctuate. In this situation I would prefer to concentrate more on local search and will target less competitive keywords for universal search.

Fluctuations are natural and nothing to worry about. It's usually more useful to look at your traffic to detect something you might need to worry about.

Is traffic down by a substantial amount?

Oh ya. I have experienced this many times. fluctuation in ranking is normal for any website.

Ranking fluctuations are basically caused by two things:

1. Google uses various datacenters to provide search results. Each of them has crawled the web differently and has determined what is important differently.

2. Google is constantly adding and removing, visiting and revisiting, and ranking web pages from each of its datacenters. It sometimes goes through complete recrawls which can list weak webpages highly, temporarily until it has revalued the whole Internet.

In general, fluctuations will subside over a short period time ( a couple of months).

I've been doing organic SEO for about 5 years. My bet is that your site just is not strong enough to stay at the top. It's only strong enough to stay there 1/2 the time.

I'd say just focus on new backlinks, updates and outbound links not working.

See #2 at http://thyseo.com/thework.html