It is difficult to put a positive spin on today's market.

But I will try.

Volume on the NYSE Composite was 6.2 billion, the third lowest volume day of October and the lowest since October 2.  A low volume re-test of the previous lows is positive.

As long as the lows hold.

The lows may not hold.  What is amazing is that the market cannot solidify any gains.

The news that the government is going to take a stake in banks is good, at least for the market, or at least it should be.  

The market does not care.

What is disheartening is that sellers hit the bid immediately on the open on Tuesday after the news of the government bailout and have not let up.

And it fell apart today.

The Dow dropped 733 points, 365 points in the last 45 minutes of the day and 140 points in the last 15 minutes.

There just are not any buyers.

Mutual funds are liquidating.  Not only are they liquidating to meet current redemptions, they are also liquidating to meet expected redemptions.  In a massive way.

Then there are the hedge funds.  On average, hedge funds are down 17% this year.  Hedge funds do not get paid 2 & 20 to be down 17%. 

So are hedge funds buying?  No, they are selling because they are being liquidated.  And those who are not being liquidated are moving to cash.

Thus buyers are not buying because money is being taken away, and those that can buy are stepping aside.

Who can blame them?

Markets go down 3%, 5%, 7%, 9% per day.  Downside volume was 21:1 today.  Why get in front of that freight train?

But...

The market may be tracing a bottom.  Proof is needed first, though.

I went almost entirely to cash at noon.  I plan to stay there.

At least for another day.