With the

Nasdaq

in a wrong-way race to last week's low, and the

Dow

merely treading water, we know that the most critical question on our readers' minds is: Just where is this market headed?

We posed this question to the

TSC

columnists, whose opinions on the subject were bound to be provocative. And they didn't disappoint. Here, without further delay, are their own views on the forces that will be driving this market in the weeks ahead.

Gary B. Smith, The Chartman

It is clear to me -- at least it was on the morning of April 11 -- that the Nasdaq is in for a serious hurt dance. Two reasons lead me to this conclusion:

The rally from last week was on declining volume, and failed at the breakout point (see my

April 7 column).

I had numerous short candidates pop up Tuesday morning with barely any longs.

Given this, many have asked where I think the Nasdaq is headed. Obviously, this is a day-to-day kind of call, but for now, I think Nasdaq 3600 is in the cards. If that does not hold -- and frankly, I don't give it high odds -- then we could easily drop to 2600.

This is not good news, I know, for many readers. But, I call 'em as I see 'em. If you want to take advantage of the decline, then obviously the short side is the way to play it. But, even there, be careful: Short-covering rallies are fierce and scary. If you think you could handle last week's comeback, then the short side might be for you.

Are there signs of optimism, though? In small areas, yes. For example

FedEx

(FDX) - Get Report

and

Goodyear Tire & Rubber

(GT) - Get Report

both look strong, as do nontechnology companies such as

Celestial Seasonings

(CTEA)

.

Above all, my advice is this: Stick to your methodology, and don't bet on the market direction by guessing on a bounce. If you're unsure, then just stay on the sidelines. There will be easier times ahead.

Disclosure: At time of publication, Smith held positions in FedEx, Goodyear Tire & Rubber, and Celestial Seasonings, although holdings can change at any time.

David Brail, The Risk Arb

For me, the seminal event in the market recently has been the bloodbath in the shares of

Palm

(PALM)

. What should have been an enormously successful IPO has fallen flat on its face, thus deflating prospects for all future IPOs in its wake.

With so many New Technology companies carting around large portfolios of venture investments, the prospect of the disappearance of this trove of value drove share prices higher over the last two years. Now that is history, too.

Valuation may matter less in today's market than it ever has before, but I think it will matter more and more over the next few weeks and months. The enormous multiples on bellwethers such as

Microsoft

(MSFT) - Get Report

,

Cisco

(CSCO) - Get Report

,

Intel

(INTC) - Get Report

and all the recently public Internet infrastructure companies will come under increasing scrutiny. The recent decline in Nasdaq shares will intensify.

The most important question in my mind is the extent to which that decline infects the broader stock market, the bond market, and the capital markets in general. I don't see how they will escape unscathed.

Disclosure: At time of publication, Brail held no positions in any of the securities mentioned in his article, although holdings can change at any time.

Jonathan Hoenig, Capitalistpig

Although I have closed a portion of my short positions, I think we've got more carnage to come. If this were a real bottom, we would have seen the

VIX

(Volatility Index) in the 40-50 range. We'd see

Newsweek

cover stories entitled "Nightmare on Nasdaq." We'd see tech CEOs vilified as crooks and massive outflows from the

Janus

mutual funds.

If this were a real bottom,

Jay Leno

would be joking about brokers jumping out of windows on

The Tonight Show

. We'd see liquidity evaporate into thin air. We're not there yet.

Disclosure: At time of publication, Hoenig held no positions in any of the securities mentioned in his article, although holdings can change at any time.

For more

TSC

columnist views, see

Part 2 of this story.