What do you make of a day like today? What do you make of it when the Dow moves in 250 point range from top to bottom, then moves almost all the way back at the close?

And what do you make of a stock like Citigroup

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[C  Loading...      ()   ] , which trades in a 10% RANGE IN A SINGLE DAY and whose total volume, approaching 200 million shares, is 10% of the entire volume of the New York Stock Exchange? (if all the shares traded at the NYSE--they didn't)

And...(last one) what do you make of Chinese stocks like New Oriental Education

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[EDU  Loading...      ()   ] , which was trading at $81 at noon and then a little more than an hour later, was trading at $71, down 12%? IN A SINGLE HOUR? And then rallies back to $78 two hours later?

Here is what you make of it: this market is completely under the control of momentum traders, who do not give a damn about the global growth story, Ben Bernanke, the U.S. consumer, or Britney Spears for that matter. They only care about price action and volume in stocks and sectors; positive price movement on strengthening volume generally means buy; weakening price action on strengthening volume generally means sell.

On a broader basis, what today means is:

--Everyone is scared
--No one wants to miss the up move
--Markets are groping for a bottom

The two main themes today:

1) The sectors with the most significant momentum traders--emerging markets and tech--are seeing considerable weakness. These the two last sectors to keep the overall market trend on the upside (materials and energy have held gains, but lost momentum).

2) The steepening yield curve. The Fed's dilemma--and the concern for the markets--is again reflected in the steepening yield curve. Put simply, yields on the short end of the curve (below 3 years) are notably lower, while yields on the longer end (10 years and above) are higher.

Here is the dilemma, as Tony Crescenzi at Miller Tabak and many others have noted:
--As the Fed will continue to cut, yields will come down on the short end of the curve
--The weaker dollar that results from those cuts cause inflationary pressures, which tend to drive up yields on the higher end.

Tomorrow, what matters is evidence of a market bottom. Bulls want heavier volume (they got it today--over 2 billion shares) and a strong close.

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