This chart suggests that one of the biggest reasons for the market's collapse is fear. The red line (VIX) is a measure of the implied volatility of equity options, which in turn is highly correlated to the market's fears, doubts, and uncertainties. The higher the fear factor (which shows up as a declining red line since I have inverted the scale), the more people are willing to pay for the protection of things like put options, and the higher the VIX. Fear also contributes to a lack of liquidity and that too can depress prices.
This chart is quite similar to the one comparing swap spreads to equities in my post last night. The main difference is that swap spreads are typically a leading indicator, whereas the VIX is a coincident indicator.
If fear and uncertainty subside, there is a lot of room for equity prices to move higher. Fear is easier to vanquish than depression. We're not talking depression by any stretch of the imagination.