The Six Unknowns That Are Roiling the Stock Market

However, sales figures could still disappoint. "The consumer is in retrench mode," says Ralph Shive, portfolio manager at 1st Source Funds. Falling energy prices have been likened to a 'tax cut.' But, Shive says, compared to the many factors stacked against the U.S. consumer, the "gas 'tax cut' won't be enough."

5. When will the hedge funds stop selling?

Market professionals speculate incessantly on the state of the hedge fund industry. But few have solid information as to what is going on.

Hedge funds invest billions of dollars in the market and often borrow to magnify that exposure. Reportedly, funds are being forced to sell assets because of their poor investment performance, the difficulty of obtaining credit, and most of all, because their investors are withdrawing money.

Funds don't want to disclose that they're being forced to sell assets, but many observers assume that hedge fund troubles are partly to blame for the market's big decline in past months. "None of this is out in public," Reed says. "It's all between the hedge funds and their customers."

Though hedge fund investors can pull their money out each month, the end of the year may cause even more investors to reduce fund exposure, Frederick warns.

6. What's the next turn in the credit crisis?

Every market expert has a different opinion on what the U.S. Treasury, the Federal Reserve, and regulators and central bankers around the world should be doing to resolve the global financial crisis. The biggest unknown may be whether—and when—they are ultimately successful.

"Credit drives the economy, and we are in a credit crunch of unknown degree," Shive says.

Some easing of credit-market conditions has cheered investors recently, Neimeth says. But, he adds, more could be done.

Many companies aren't able to obtain short-term financing because of problems in the commercial paper market. Neimeth says the government should protect investments in money market funds, a move that would add liquidity to the commercial paper market.

With so many unknowns continuing to make investors very uneasy, wild daily index swings are likely to keep our heads spinning.

By Ben Steverman