It was a particularly ugly day for the market, but what made it much worse was that Tuesday's oversold bounce had given the bulls a little hope. Even though the bounce was nothing special, there were plenty of folks who were ready to believe that the worst was over.
Unfortunately, the gap-down open this morning and the poor Empire State Manufacturing Survey caught them by surprise. The steady flow of negative news about Greece kept the pressure on all day. Once it became clear that the bulls weren't able to come back from the weak open, they hit the exits hard and it was just plain ugly all day.
Ultimately, this sort of purge will be healthy, but it could easy continue depending on the news flow out of Europe. Some good news might give us a gap up in the morning, but it is just a coin flip at this point.
After action like this we always end up with a fair number of traders calling a market low. They usually don't have any solid reason for believing we have hit a low -- they just don't feel it's reasonable that the market can continue to act this way much longer. It offends their sense of how far a correction should go and, therefore, they start predicting that the market won't go much lower.
The problem with the approach is that the market doesn't care what anyone thinks is reasonable or appropriate.