Following another dismal day on Wall Street at the end of last week, amid concern that tightening credit conditions may lead to a slowdown in housing activity, the market is a state of heightened uncertainty. Which way will it go? Is it going to get worse, or is this an opportunity for bargain hunters?

Scott Thill, writing for AlterNet, warns that we could be on the edge of a 1929-style crash because the American economy is now divorced from reality with hedge funds playing both sides of the market, like a craps game. Except that the hedge funds are also the croupier, own the casino management and the gaming regulators.

But is it as bad as that? Yes, US housing is expected to snowball further. But the other fundamentals seem to be okay.

US Treasury Secretary Hank Paulson said it was just a matter of risk being re-priced, reports the Financial Times. "I think we could use some more discipline. We are seeing a reassessment of risk and that is leading to a market adjustment," Mr Paulson said.

Then there are the economic fundamentals. Profits might be down but the market does not seem to be worried. In a note last week to clients titled "Five Reasons Not to Panic," and quoted in The Wall Street Journal market blog, Jeffrey Kleintop, chief market strategist with LPL Financial Services said it's "just another 5-7% pullback''.

In any case, he says, the temporary unwinding of yen carry trade is nearly over, profit worries are overblown, subprime losses are unlikely to cause a financial crisis, and there is no one left to sell.

Other analysts say it's not necessarily the way markets work. "You don't tend to go to new highs and then immediately start a bear market. Markets don't tend to turn on a dime,'' Liz Ann Sonders, the chief investment strategist at Charles schwab told the New York Times.

Those views are echoed in a conversation I had Australian market analyst Michael Heffernan today. ''The performance of Wall Street on Friday wasn't too bad," Mr Heffernan said. "It was pretty close to what you would call an ordinary down day."

Watch this space.