There is a growing sense of panic in the trading pits, as demand is just not materializing at levels that should, by all precedent and reason, attract buyers.

A lot of fund managers who turned optimistic in December over expectations that the November lows would hold are going to start to freak if demand doesn’t start picking up right now.

Banks are crashing for the usual reasons, but now they are being joined by tech and retail companies’ shares that had so far been relatively secure.

Keep in mind this is not a technical matter. It’s fundamentals, as earnings are under pressure from a withdrawal of consumer and corporate demand.

Another sign of weakness can be seen in the weak performance of the Dow Transports. With components like Southwest Airlines, FedEx, and Burlington Northern, the index is the market’s early warning system for economic malaise.

These companies are the first to feel the pinch from reduced economic activity, as freight volumes fall and business travel is curtailed. Conversely, they are also the first to perk up as a recovery begins as raw materials flow back into the country’s manufacturing base.

Many big hedge funds, which have been canny buyers of distressed assets at times like these in the past, are still facing redemption demands from pension fund and endowment clients who lost money in 2008 and wish to pull out this quarter.

Until transports and banks find brave new value buyers with long time horizons and deep pockets, it’s hard to see the major indexes finding sustainable support even at these depressed levels.

Eventually prices will hit a level that compensates courageous buyers for the risk they will take, and the surge to buy stocks will become a broad, long-lasting stampede of high-volume bargain hunting. That surge has a statistical signature, and I will know it when I see it.

You will be among the first to know as I will tell you to abandon cash and bond positions and join the rush. It’s not here yet, though, so please remain liquid and skeptical.

To see how I recommend trading on these ideas, check out my Trader’s Advantage advisory service.

This article was written by Jon Markman, contributor to InvestorPlace Media. For more actionable insights likes this, visit www.InvestorPlace.com.