I've been sitting here for a few minutes now wondering what exactly you say on a day like today. Happily, it doesn't involve finding some new way to describe a continually plunging Stock Market. In fact, quite the opposite. I'm sure you've seen already, but each of the three major US indexes is up more than 11%. Let me just go ahead and repeat that: over 11%.

How does this rank historically? From what I've got from Yahoo!Finance, it looks like this is the sixth largest percentage gain on the Dow (note: ignore the hoopla over the point gain, that's meaningless -- focus on the percentage). Ominously, all of the single-day percentage gains higher than today's were during the Great Depression.

Now I know this will make everyone jump to the conclusion that this means we're in the same situation as back then. I don't believe it does, so I'm not going to drag out the comparison any further.

What I will say is that there are two primary factors that are going to be front and center for me going forward: 1) the economy's reaction to the global efforts to jump start the credit markets and 2) how far the repricing of risk goes and how persistent it is. The reason for #1 is that if the economy falters then the companies that we're investing in (broadly) will be hurt by pinched sales and profitability. Simple as that.

#2 comes from the fact that over time investors tend to determine their required returns differently depending on how scared they are. People are very scared right now and want a big return to take pretty much any risk. If that continues to be the case, valuations for stocks will continue below what they had been before this drop began.

As for tomorrow... who knows? It's hard enough evaluating the market when fundamentals are in the driver seat. When investor psychology takes over -- particularly when there are a lot of unknowns -- things get interesting.

-AvgJoe