I've got a 3 month old domain. Since I put it online, google has been non stop on the site. About a week ago, this site had 700 pages indexed in google and was getting fairly good traffic. Yesterday, traffic dropped to zero and number of pages indexed dropped to under 50. I have checked all the datacenters and they are all around the same 50 pages indexed. Could it be my site has been penalized, I thought it had finally come out of the sandbox? There are a number of backlinks, some of which are pr 4 and 5.
Are your backlinks of reciprocal type ? Google has now introduced new stuff on crawling of sites that have generally more low quality backlinks. ( reciprocal)
Is your web servers reliable? Early last year, I had experienced a significant drop in traffic due to long downtimes. After changing servers, everything smooth sailing. Tuning is right about the recent reindexing exercise by Google. If you go to blog.bestwebsites.com.my (Search Engines) you would be able to read about it under the heading "Google Placing a Bigger Emphasis on Trusted Links".
Most folks spend longer than three months in the Google sandbox. More than likely you have just gone into that sandbox after a few months of good "new domain" exposure. I've seen new domains do great on Google the first three months and then disappear for up to a year after that nice inital bounce. Just a guess on my part, but I've seen this happen before.
For some of the questions posted....my server is reliable, the host gets very good ratings....and my links are a mix of reciprocal as well as one way. The results really do fluctuate....I went from 700 to under 50. Today when I check, all but one google datacenter shows under 50 pages indexed. The one datacenter that is different now shows over 4000 pages indexed.