Here's what we're seeing at midday.

If the

Comp and

Dow hang in here, it would be one of the greatest reversal days in history.

The Dow was down about 425 points at its morning lows and is now off a "mere" 152. Reminds me of a prize fighter that has been clocked, has struggled to his knees and hopes to get all the way up before the ref calls the fight. The Comp fell about 200 and now is only 14 underwater. More like a fighter taking a standing eight-count.

Today may go down as less a study in panic than a study in volatility. As I write, the

Chicago Board Options Exchange Volatility Index

, also known as VIX, stands at 33.48, up 0.77. But that is still far below the levels we saw on April 3, June 2 and September 13 -- all days followed by declines.

One of my favorite young tech hedgies is calling a bottom. Mid-morning, he was buying

America Online

(AOL)

,

Bank One

(ONE) - Get Report

and

Comcast

(CMCSK)

. So far, they look like profitable trades as all are up from their intraday lows. He was on the AOL conference call and came away wowed by AOL's Bob Pittman and

Time Warner's

(TWX)

Gerald Levin.

Their message? Despite some advertising slowdown in America Online's existing business, there is no, and there will be no, slowdown in the combined companies ad revenues. Why not? According to Pittman and Levin, America Online/Time Warner is simply too dominant to be hurt by a slowdown. Isn't that what we would expect them to say?

The stock price in the past six months has been forecasting something less "dominant." AOL's trailing P/E remains about 110 and Time Warner's is 90. The combined company's P/E is more than twice those of other media and publishing stocks. I wonder how the combined entity will trade once the merger goes through.

The hedgie says that for him the "tells" today are

IBM

(IBM) - Get Report

,

TST Recommends

Intel

(INTC) - Get Report

and

Juniper Networks

(JNPR) - Get Report

. At the moment, Big Blue is down 15.4% to $95.56, Big Chip is up 6.7% to $38.63 and Big Tree is down 1.9% to $225 all have rallied off their lows of the day. If he is right, then the market could hold in here.

God knows, the bulls are making a valiant effort here. I wonder nonetheless where the follow-through will come from. Stocks may be oversold. But as Ed Hyman's

International Strategy & Investment

group writes today, they are also "fully owned. With hindsight, last Friday's rally seems to have been a knee-jerk reaction, rather than the beginning of an up-leg. Prior to rallies in late 1998 and 1999, equity managers had become cautious. In contrast, this year they're still close to record bullishness. And although they've raised some cash, they are still pretty fully invested. In addition, margin debt is still sky high."

In addition, a lot of the hedge fund managers I know who were short stocks have already covered. It's up to my hedge fund pal and the big mutual fund complexes to step up to plate here.

What's up on my screen?

Philip Morris

(MO) - Get Report

,

Valero Energy

(VLO) - Get Report

and

Yahoo!

(YHOO)

! See the pattern? I don't. It's that kind of crazy market today. Lot's of volatility. Stocks being marked up and down by manic bulls and bears.

What should you do. I stick by what I wrote

last evening. Be careful. There is a lot of risk in this market. It could still go lower today or tomorrow. The banks and brokerages are all acting badly. I have never seen a real bull market rally when there are questions about the future profitability of our most important financial intermediaries.

One last thing. If the stock market continues to get hit, the odds of a recession increase. That in turn increases the chances of a deeper downturn in stocks. Be careful out there, folks.

Brett Fromson and

RealMoney.com's

contributing editor, Christopher Edmonds, will be discussing today's market at 3:30 p.m EDT on

TheStreet.com.