What to make of this completely crazed market? It’s simple (but that doesn’t make it any more bearable): we’re right on a major cusp.

Four critical indices — the NASDAQ Composite, the Russell 2000, the Wilshire Total Market Value Index, and the S&P 500, are all engaged in the same desperate battle — a struggle to hang on the the level of key highs they made in 1998. For the NASDAQ, the Wilshire TMV and the S&P, the highes were achieved in July. For the Russell 2000 it was in March.

Remember where we were then. Those highs were achieved at the peak of public confidence in the dynamic duo of the American economy, Alan Greenspan and Robert Rubin. The markets sold off when that gruesome twosome took us off what had been an implicit gold standard, and started a relentless campaign of too-strong money that triggered the Asian contagion, the Russian debt default, and the collapse of Long Term Capital Management.

After the lows of October of 1998, the Fed orchestrated a bailout of LTCM and cut interest rates three times — restoring at least a superficial confidence in American monetary policy, and ushering in the deflationary boom that lifted the NASDAQ above 5000. Now we’ve made the round trip. We’re right back to the same levels we were at three long years ago. To the penny. And once again all eyes are on American monetary policy, hoping that once again confidence can be restored.

For the NASDAQ, that level is 2028. While the NASDAQ has made new intraday lows for the last five sessions, for each of the last four sessions it has crossed madly back and forth above that key level. Yesterday it managed to close just above it. For the Russell 2000 Index of small-cap stocks, it’s been precisely the same story at 493.

The Wilshire TMV and the S&P 500 have managed to hang in their just slightly above their version of the same critical level. For the Wilshire it’s 11122, and for the S&P it’s 1191.

These levels in these indices are shaping up as the lines of death — the decision junctures below which we will be destined to revisit the lows of late spring, and above which we can launch a new leg in the recovery. While we’re still toying with these levels, the markets are going to be as crazy and frustrating as they were yesterday.

What was that, anyway? A market that doesn’t want to go down? Or a market that doesn’t want to not go up? I’m lost…

Markets like this are the hardest of all to trade. Industry groups get unstuck from their traditional trading relationships with each other. For example, yesterday Internet stocks were generally higher, and networking stocks were generally lower — they normally trade together. Stocks within groups behave as though they were complete strangers to each other. For example, while most semiconductors traded lower yesterday, Intel traded higher all day. And style and risk sectors lose their normal character. For example, yesterday supposedly “speculative” biotech stocks soared, while supposedly “safe” energy stocks faltered.

It’s a bad time to try to be a guru. Or an investor. The best thing I can recommend is to be patient and brace yourself while the tectonic plates shift around just a little longer. We’ll know which way it’s going to go soon enough.

The views expressed within represent those of the author, and do not necessarily reflect those of Capitalism Magazine’s publishers.