"The decision to abandon ship is usually very difficult. In some instances, people have perished in their life raft while their abandoned vessel managed to stay afloat. Other cases indicate that people waited too long to successfully get clear of a floundering boat." - Procedure For Abandoning Ship from BoatSafe.com

The quote above is about nautical safety, but the parallels with the present situation in the stock market are abundant and clear.

While all stocks have been hammered by this current storm, no corner of the market has been slammed harder than the small caps. As of this morning, the Russell 2000 (^RUT) is down more than 20% in the past month versus about a 15% drop for the S&P 500.

To most investors, the 20% drop on the Russell is enough to characterize the small cap crash as a "Bear Market." However, veteran investor Ford Draper of Kalmar Investments believes the current turmoil must be more prolonged and agonizing to earn that dubious distinction. Instead, he sees this as an opportunity to trade up into companies he thinks have been ''unfairly crushed", to increase holdings where they have "great conviction", and to sell positions where they don't.

"What I would say is don't abandon small caps. There are too many good individual opportunities there," Kalmar says. "Just make sure you don't have a high-risk for high-reward manager, but rather a low-risk for high-reward."

Of course that's easy to say when you have a long-term track record of outperformance, a 4-star rating and a zen-like turnover ratio of just 29%. It also allows him to keep a straight face when using terms like "low risk" and "conservative" to describe their style even as he holds numerous stocks that have 20% short-term losses.

Here's how he justifies it:

Another rough day for stocks as a feared escalation in Europe's debt crisis skipped the pond and hit the U.S. markets hard. The Dow Jones Industrial Average fell 4.6% closing at 10,719 and the S&P 500 sunk 4.4% to 1120.

It would be nice to call the bottom of the Summer of 2011 market meltdown. But confidence is key and there's too much uncertainty out there, making this the key debate on Wall Street right now: Has the market hit bottom?

I'm pulling for the Bullish camp - the side that will hopefully look back and declare yesterday, Tuesday August 9th at 2:42pm EDT, stocks made their lows for 2011. For those scoring at home, the levels were 10,674 on the DJIA and within spitting distance of 1,100 on the S&P.

At that exact moment the fear was palpable, the Fed Statement with its negative implications for the economy through 2012 was digested, and stocks were some 7% off their opening levels of Monday. The market looked into the abyss and found it's soul. As it turns out, the market's soul was a buyer of stocks, in size. Starting at 2:43 EDT on Tuesday, stocks exploded higher putting more than 6% between the lows and the 4:00pm close.

Of such moments and reversals are market bottoms made. To debate the point, Matt Nesto and Aaron Task of the Daily Ticker joined me for a Financial Summit. Their list of fears is as familiar as it is harrowing.

Here's why the Bearish camp believes stocks will move lower:

* The fear still isn't bad enough. The VIX (^VIX) topped 40 today. But for market vets such as Nesto, 40 is nothing. Volatility has plenty of room to run higher.

* Traders are still being tactical; buying levels like S&P 500 1,100 and trying to get footholds for long strategies. Two previously critical support levels - 1,250 and 1,140 on the S&P - held for a blink and collapsed. And 1,100 is no different.