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Notes on this market:

Correction or crash?:

If a correction is 10% and a bear market is 20%, what constitutes an all-out crash? By 1987 standards, the number is 36% -- in other words, two percentage points away on the


(which, ironically, has become



For the Nasdaq that would be 3225 from its high of 5048 on March 10.

Short shrift:

Checked back with my short-selling sources and for the first time since making my round of calls on big down days -- and I'm talking for more than a year -- they're finally starting to sound like winners. (This is after sounding like they were ready to close up shop just a few weeks ago.)

"For a long time the declines were pretty quickly followed by purchases that were described as "buy on the dips," says Paul L. McEntire, who runs the Los Gatos, Calif.-based


fund, the country's only 100% short-only mutual fund. "Today, particularly following several days of serious declines, it's pretty different. Many companies we've been short are down seriously from their highs. It's no longer an issue of a brief decline followed immediately by a recovery or even new higher levels. This is particularly true in companies we would say are highfliers, such as Internet companies and software companies."

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But many are still well above their highs. For example,



got as high as 225 on March 27. It has been in steady decline, but today, alone, it's down around 46%. Still, that puts it at 44 1/4, which is still well above its high of 9 7/8 last April.

McEntire sees that as a signal that the market is starting to "return to values more consistent with actual performance."

Shorts are so busy covering (buying) their positions that the operator of one large short hedge fund says he's "struggling to stay invested on the short side ... we always cover when a stock hits our target, and stocks in the Internet world have started to hit our targets."

Others, like

Estee Lauder

(EL) - Get Estee Lauder Companies Inc. Class A Report

, are still trading at astronomical levels (40 times earnings). "These aren't frauds," the hedge fund operator says, "just good shorts."

Meanwhile, this column's benchmarks for a market that has cracked --

Lernout & Hauspie





-- have both finally cracked. Lernout, at last check, was down 10 5/8 at 95 -- its intraday high was 145 on March 14 -- while CopyTele is down 58%. They're both, however, still well above their lows.

That, combined with the Nasdaq not entering "crash" territory, suggests


sharks remain close to shore.

Herb Greenberg writes daily for In keeping with TSC's editorial policy, he doesn't own or short individual stocks, though he owns stock in He also doesn't invest in hedge funds or other private investment partnerships. He welcomes your feedback at Greenberg also writes a monthly column for Fortune.

Mark Martinez assisted with the reporting of this column.