More weakness is likely in the market. This anticipation is not only due to earnings downgrades, or falling indirect tax collection.
While these factors do influence the maket, there is some fundamental change taking place the world over. Twenty years ago, the Berlin wall came down, heralding the demise of communism. This changed the world. The credit crisis is leading similar changes in the world economy. It appears that the excesses of crony capitalism will now be corrected through a reversal process - more for the people, less for the billionairs.
The stock market is already adjusting itself to the new era. But not all adjustment can be made in advance. Price earnings will be rerated, many sectors will see significant government ownership, focus will shift on fair deals for the people even at the cost of lower growth. In the long run, this will be beneficial to the markets since what benefits the country will benefit the market. But the adjustment process will be painful. More so because the investment bankers who control the money have ostritch like thinking. They have buried their heads inside a world of their own imagination - refusing to see reality.
My point is: there may be more downside. At some point, the markets will revive. But the gains seen in the 2003 - 2008 bull market were exceptional. We may not see similar gains in the coming years. That's fine, since traders should hope for steady gains rather than volatile earnings.