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From Alan Greenspan on down, conventional wisdom is that the economy and the stock market are being waylaid by geopolitical events. Such concerns were widely cited in explaining

Wednesday's losses.

Hard-core bears argue the "war fears" talk is a smoke screen, claiming the economy and stocks are suffering because of deep fundamental problems such as equity valuations, high consumer debt levels, mistrust of corporations and Wall Street, rising federal deficits, a weakening dollar, the unwinding of the 1990s bubble and (for good measure) rock 'n' roll.

Then there are the technicians. Some chart readers believe the current decline is mainly a function of the ongoing bear market and the V-shaped nature of the rally from the October lows. In sum, a retest -- and possible break of those lows -- was (and is) inevitable, regardless of the geopolitical backdrop.

"Because we went up so quickly off the initial stages of the October lows,

there's nothing between the October lows and

current levels that could conceivably serve as areas of significant buying interest," said Richard Dickson, senior strategist at Lowry's Reports. Therefore, a retest of the October lows is "pretty well baked in," he said, especially for the

S&P 500

and the

Dow Jones Industrial Average

, which closed Wednesday at 818.68 and 7758.17, respectively.

On Oct. 9, the Dow closed at 7286.27 and the S&P 500 near 777. The Dow traded as low as 7197 intraday and the S&P as low as 768.67 on Oct. 10 before both rebounded sharply. The

Nasdaq Composite

, which ended Wednesday at 1279, traded as low as 1108.49 last October and closed as low as 1114.11.

Events are unfolding for a potential retest, or break, of those October lows roughly coinciding with the foreseen start of military action. While only fanatic chart readers would contend geopolitics are irrelevant, a war and the test of the lows are arguably coincidental. Moreover, geopolitics may be secondary to overriding technical developments.

"The fact is, the market continues to act, smell and trade like a bear," said Rick Bensignor, chief technical analyst at Morgan Stanley. "In conventional technical analysis terms

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the stock market is acting the way a bear market acts

and rallies are meant to be sold into."

Furthermore, if things go as expected both militarily and marketwise (two big ifs), most participants believe stocks will rally when the bombs start dropping. Bensignor suggested the S&P could rally a quick 30 points "as soon as the bullets start flying." Most pundits will attribute any such move to the "uncertainty about war" having been removed.

But from a technical point of view, any subsequent rally after a test or breach of October lows will be, well, mainly technical in nature.

Why? Because many traders who missed buying at the bottom in October don't want to miss the opportunity again. When the market rallies sharply, as it did last October, few traders are able to buy in at the absolute bottom. Instead, Bensignor estimates that most buying was done between S&P 880 and 920, meaning most positions are now underwater.

As the averages get closer to the actual October lows, some traders will step up on the belief that they're getting a second chance to buy at the proverbial bottom.

In fact, Bensignor suggested the market would probably be falling more heavily now if you didn't have the October and July lows as a "reference point" where buying is expected to emerge. Whether that occurs as the S&P approaches 770 "depends on has something happened or not," he said, giving a large nod to concerns about war with Iraq.

"There are too many variables to say whether we should stop and create a true triple bottom," which wouldn't be established unless the S&P subsequently rallied back above 900.

And a Triple?
The combination of the July and October lows created a clear 'W' formation in the S&P 500's chart. The avearge now appears destined to revist, if not break, those levels.

Watching the Fall, Not the News

From a purer technical read, Dickson suggested any rally at the outbreak of hostilities will be relatively meaningless in comparison to the technical nature of the decline that precedes it.

"If we were to see a sequence of 90% downside days as the market approached or got through the October lows, and that coincided with the outbreak of war, we'd say the market was looking higher regardless of war," he said. "But if we see a steady erosion of buying interest without capitulation, war or no war, we wouldn't anticipate any significant rally."

As

previously discussed, Lowry's president, Paul Desmond, has been lauded for his research on so-called 90% downside days. The basic principle is that major market bottoms occur when there's a series of sessions with 90% of

both

trading volume and price activity to the downside. When that's soon followed by a 90% upside day, it's an indication the selling pressure has been satiated and buyers can take control.

All the talk comparing the current situation to the market in early 1991 misses a crucial element, Dickson said. "You had a clear-cut bottom in October 1990," featuring a series of 90% downside days. In the current cycle, there was nearly one on Jan. 27, but that failed to qualify and was a solo effort.

The rally in early 1991 timed with the outbreak of Desert Storm "reinforced the trend" that was established the prior fall, rather than being the precipitating event as is commonly believed, Dickson said. The setback that occurred prior to the rally in early 1991 -- to which many see similarities to the current situation -- was a "temporary interruption" of the uptrend from the October 1990 lows, he added.

Currently, "the downtrend is in force and if it's still in force, I see no reasons why the start of war should reverse that trend," Dickson concluded, even if it's temporarily interrupted.

Voice of (Optimistic) Dissent

Another point of view comes from John Bollinger, president of BollingerBands.com in Manhattan Beach, Calif., who believes the October lows represented a "good retest" of the July lows, and that we're in a new cycle today.

A quick glance at a chart of the S&P 500 shows a pretty clear "W"-formation, a common pattern at market lows, with the July and October lows marking the bottom points. Today, "we're working a different part of the puzzle," he said.

While admittedly surprised by the "persistence" of recent selling, Bollinger believes the S&P 500 could make a stand soon. He's eyeing S&P 807 (only about 1.5% below Wednesday's close) as an area of potential support, as it's the lower end of the Bollinger Band, which has just started to turn up, he noted. (Bollinger Bands are "curves drawn in and around the price structure that provide relative definitions of high and low," according to the firm's Web site.)

The lower band starting to turn up and volatility being down is a "typical setup" for a rally, Bollinger said.

Maybe a rally is coming -- one trader even suggested results from

Dell

(DELL) - Get Dell Technologies Inc Class C Report

after the close Thursday could be a trigger -- but there's very little that's "typical" about the current environment.

Aaron L. Task writes daily for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. He invites you to send your feedback to

Aaron L. Task.