SAN FRANCISCO -- It seems one day of relative calm -- Tuesday -- was about all we can expect from the market, which returned to its wild and woolly form today. And there was a lot of "bully" to go with that woolly.

Even hardened skeptics had to be impressed with the market's ability to withstand the

cautious comments from

Cisco Systems

(CSCO) - Get Cisco Systems, Inc. Report

. Withstand, and overcome, that is. While Cisco fell 3.4% to $36.25, the

Dow Jones Industrial Average

rose 0.3%, the

S&P 500

gained 1% and the

Nasdaq Composite Index

jumped 3.4%. Meanwhile, the

Nasdaq 100

soared 4.4%.

Additionally, Cisco managed to close well off its intraday low of $33.64 on trading volume of 212.7 million shares, more than three times its daily average, and the second-busiest session for a stock in history. Cisco's ability to shake off downgrades and/or estimate cuts from

CIBC World Markets

before the company's presentation at a

Morgan Stanley Dean Witter

conference -- and

UBS Warburg

and

Credit Suisse First Boston

after -- did not escape the attention of market watchers.

"All week long, we've seen the reappearance of the buy-on-dips crowd, and they seem to be targeting weakness created by wire house opinions," observed Charles Payne, at New York-based research firm

Wall Street Strategies

. "This line of thinking goes deep into the belief of many investors that the latest wave of negativity on the Street is really an effort to shake out the little guy."

Retail investors may not be shaking, but Payne mused that "lost in the action is the fact that maybe CIBC is on to something when it comes to Cisco."

Downgrading Cisco to hold from buy, CIBC's Steve Kamman wrote: "Basically, we foresee a period of significant strategic and operation uncertainty ahead in the service provider market and expect Cisco will have to revise its expectations, strategy and operating model to navigate it."

Cisco CEO John Chambers did not specifically lower estimates, but his comments seemed to vindicate Kamman's concerns, which -- again -- were raised before the company's presentation.

Even if the result of

short covering, today's action is no doubt going to encourage talk that equities are on the cusp of a significant recovery, particularly techs.

The risk of such thinking was evident after the close, when shares of

Yahoo!

(YHOO)

fell about 20%. Yahoo! posted fourth-quarter earnings that met expectations, but

forecast earnings and revenue for 2001 far below expectations.

One stock does not a market make, but Nasdaq 100 futures were following Yahoo's lead, lately down 24.50 to 2416.50 in

Globex

trading.

Which brings us back to where we left off

Tuesday night: The notion that investors might be better served waiting for the "all clear" signal from the market, rather than taking cues from the

Fed

.

The Whites of Their Eyes

"Certainly there are good reasons to believe there will be a recovery, but it's too soon, based on stock market performance, to position yourself for that outcome," said Hugh Johnson, chief investment officer at

First Albany

, which manages about $650 million. "The stock market so far is sending a signal that much more will be needed from the Fed before the bear market ends and the bull begins."

Speaking before today's turnabout, Johnson said the action last week reflects the market's indecisiveness. Last Wednesday, "investors decided the Fed would be successful in heading off the hard landing," but concluded the opposite last Thursday and Friday, he recalled.

The money manager is far from bearish, and quite familiar with the veracity of the 'don't fight the Fed' mantra. "I suspect that will be right once again, but the stock market has to tell me that's going to be right, not

gurus, economists or TV commentators," he said. "This could turn out to be like 1973-74, and you could end up buying stocks every month for 24 months at successively lower prices."

First Albany continues to overweight defensive groups such as utilities, where favorite longs include

Duke Energy

(DUK) - Get Duke Energy Corporation (DUK) Report

,

Dynergy

(DYN)

and

KeySpan

(KSE)

TheStreet Recommends

; health care plays

Johnson & Johnson

(JNJ) - Get Johnson & Johnson (JNJ) Report

,

Pfizer

(PFE) - Get Pfizer Inc. Report

,

Medtronic

(MDT) - Get Medtronic Plc (MDT) Report

and

Bristol-Myers Squibb

(BMY) - Get Bristol-Myers Squibb Company Report

; consumer staples

Pepsico

(PEP) - Get PepsiCo, Inc. Report

,

Safeway

(SWY)

and

Procter & Gamble

(PG) - Get Procter & Gamble Company Report

; and energy plays

Barrett Resources

(BRR)

,

Exxon Mobil

(XOM) - Get Exxon Mobil Corporation Report

and

Coastal

(CGP)

.

Within three to six months, Johnson believes the market will signal it's time to shift from an underweight in those sectors to an overweight in tech and consumer cyclicals, where current holdings include

Home Depot

(HD) - Get Home Depot, Inc. (HD) Report

,

McGraw-Hill

(MHP)

, Cisco,

Sun Microsystems

(SUNW) - Get Sunworks, Inc. Report

,

EMC

(EMC)

,

Texas Instruments

(TXN) - Get Texas Instruments Incorporated Report

and

IBM

(IBM) - Get International Business Machines (IBM) Report

.

But "I have learned to wait for the stock market" to give the go-ahead, rather than acting on hunches, he said. "The most intelligent way to begin managing money is to look in the mirror and confess you don't have a clue where the markets are going to go."

First Albany manages a lot of college endowment funds, which Johnson said affects his appetite for risk. Frankly, he didn't offer specific guidelines for what constitutes that green light from the market, beyond a simple trend of sustained gains. Each investor needs to find what works best, based on his or her risk tolerance, financial situation and assessment of the market.

But for those snickering at Johnson's self-deprecation and apparent timidity, consider: First Albany's funds were up 0.7% last year after climbing 32.8% in 1999, far eclipsing the S&P 500 in both years.

P.S.

In reaction to

last night's piece, one emailer wondered if I was discussing what investors should do with funds already in the market, or new money. For the purposes of this discussion, I'm talking about money on the proverbial sidelines, which

Merrill Lynch

estimated at $600 billion to $1 trillion in a report issued today.

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.