"How l-o-o-o-o-w can it go-o-o-o?"

The rock-and-roll disc jockey ripping and reading market results in platter patter two Fridays ago at least got the question right.

On Friday Sept. 25 the Dow Jones Industrial Average dropped precipitously 11.13 points to 824.01 as the stock market hit what was then its lowest point in 16 months.

On Monday Sept. 28, amid reports of collapsing markets abroad, traders in New York held their noses and got ready for a plunge -- only to find themselves instead in a remarkably bouyant market.

After a brief sell-off that sent the Dow Jones dropping nearly 15 points in the first half hour of trading, the market began a recovery that lasted the week. On Monday prices climbed 18.55 points above the previous Friday's close in a rally that continued through Friday.

At week's end the market had advanced for five straight days, with the Dow ending at 860.73, up more than 50 from the low of 810 that it hit in the passing panic Monday morning and 36.72 points above the previous Friday's close.

The rally felt good, but it didn't dispel questions about how low the market may go in the long run. Did it hit bottom or not on Monday? Was that brief plunge the turning point from which there is no place to go but up?

The verdict is complicated by the fact that no stock market goes up or down continuously. In the best of times there are days or periods when most stock prices inexplicably go down. In the gruffest bear markets there are periods when stock prices rise.

The question now is whether the stock market, which has lost 17 percent in the Dow Jones Average during the last five months, is poised for a turnaround or whether the Monday reaction is merely one of those temprorary recoveries in a period of declining prices.

Most analyst agree that the rebound this week was as much technical as anything else and that market forces again will test the lows on the Dow average within the next few weeks.

But after a volatile day such as Monday, the test "does not usually occur immediately and certainly not when everyone expects it and prepares for it," according to Newton D. Zinder, analyst for E.F. Hutton & Co. "It would seem that while the easy part of this technical rally is probably over (it usually is after the first two days), the market still has some further work on the upside and a test or tests will be postponed until fewer expect it."

"Monday wa a climatic day -- the kind of convulsion of action you see at the bottom," said Larry Wachtel, first vice presiden t of Bache Hasley Stuart & Shields. "We're in the process of bouncing off a bottom" he said, but he added that the market may hve to return to a level near the Monday low "to prove that was the bottom."

Monday was close to a selling climax, said Robert Gardiner, president of Dean Witter Reynolds. "I don't think the market is gboing to go straight up," but the market was close to its reversal point, he said.

The point about a technical rally is that it does not mean that the underlying realities driving the market in one direction or another have changed.

One major reality to which the market is reacting, according to most market observers, is interest rates. Investor fears that President Reagan's policies may contribute to higher rates or keep rates at their currently high levels means that the president is a factor n the market -- whether the fears are warranted or not.

Interest rates are a problem for two reasons, according to Robert Salomon, managing director of Salomon Brothers Inc. "Interest rates are competition," he said. "If I can get 16, 17 or 18 percent on a high-grade bond, why invest in stocks? There are not that many stocks with that kind of yield."

The traditional argument in favor of stocks is that their total return (appreciation plus dividends) has been higher than competiting investments and therefore a better hedge against inflation than most alternatives. That is no longer true he said.

High interest rates involve a transfer of wealth from someone else to the lender. In the case of the interest rates being paid by corporations, it may be the shareholder who will bear the ultimate cost as falling corporate profits bring a decline in return on equity, salomon said.

Another underlying reality is concern over the size of the deficit -- Budget Director David Stockman's worlds to the contrary about the trend being more important notwithstanding. "The buzz word is what's the deficiet going to be?" said Dean Witter's Gardiner.

Another factor overhanging the market is the large amount of margin debt out there -- about $14 billion. The margin is the amount of collateral investors who buy on credit must keep in accounts with their brokers as earnest money. When the market goes down, the value of the investor's stocks -- which serve as collarteral on the amount owed -- also goes down, and the investor has to fork over more cash.

When stock owners who buy on credit are forced to sell out becasue they are unwilling to keep adding collateral, their sales reinforce a decline. Some of the early Monday decline was fueled by margin liquidiations, but for the rest of the week the pressure was off because of the rebound in may stock prices.

Even so, there has been continued heavy margin selling by investors unwilling to put up more money to save their investment. Those transactions suggest that market participants soon expect a test of those Monday lows and want to sell now in hopes of making a profit or minimizing their losses rather than be forced to sell by their brokers when prices are lower.

"Nothing has changed this week relative to the budget or Washington," said Bache's Wachtel on Friday. "We're rallying this week, but we went down last week."

Watch that space.