Yeah crazy I'm going up down up down up down all week long and down for this keyword and up again for that keyword down for the other keyword....it's driving me nuts...I ordered a bunch of services here to try to get it back up and now after they are done I'm just going to have to wait it out instead of going nuts....I was redoing onsite seo myself the whole works, even though I already know I got it seoed the best you can get already...the big G just keeps you second guessing yourself as to are you doing the right thing....so yeah I had to go back in site redo the redos that I just did to put it back to normal...
My advice yes big Google Update happen, what exactly who knows, just wait it out is the best bet and once you see it getting some what stable again then worry about building more links and onsite seo ect.