Stocks turned in their best performance in more than a month last week, leading many observers to believe at least an intermediate-term bottom is being formed, messily and noisily.

By intermediate, they mean that it may last at least a few weeks to a few months before the bottom drops out again in 2009. And by messy they mean the volatility.

I'm not so sure. I would like to think that an important low is forming, and can see evidence to support it. But if you step aside from the daily noise, and stick to our discipline of waiting for a sustained improvement in stock demand, it's hard to see enough improvement to get excited about.

At the risk of sounding wish-washy, the bottom line is that we may be astride a real bottoming process, or we may be entering a period of the greatest danger yet. I recommend that you hope for the former and prepare for the latter.

The difference in these views emerges not just in their outlook, but in the speed at which events might unfold. For if the market is truly bottoming, then the process will likely be slow and will provide us with relatively low-risk entry points once upside resistance barriers are cleared. So there would be no rush to act until conditions materially improve.But if the danger scenario is more accurate, a trap door will open, and it will be impossible to jump out of the way quickly enough.

Short of a rocket ride back to last year's highs, the best-case scenario emerging now would be a long-lasting range-trade from here with a bottom around S&P 850 and a top at S&P 1,200 punctuated with a ton of volatility in between, offering lots of opportunity for swing-traders and frustration for buy-and-holders.

My greatest concern comes from the…