Mike, we had excess liquidity in the Market during the whole February massacre, thus liquidity, while a necessary precondition for a bull move, is not a sufficient condition, it does not assure a bull move. What often creates a strong bull move is sellers exhaustion. My point has been (and quite possibly this point is wrong) that the late March decline did not have enough "sellers" exhaustion. Compare that bottom to the late May 2000 bottom, there we had more than 5 consecutive days of a naz tic below -1000, that was seller exhaustion, yet, it was not the bottom of the bear. Could we have a bull market without the prior bear market being terminating in the classic way? Sure we had a number of these in the 1966/1982 period, but they were characterized by narrowing leadership (the nifty 50' of the time), and thus selectivity will be critical. Since the small caps have been in their own bear market for much longer than the naz, it is quite possible that they may serve as a good vehicle right here, of course, unless the specific issues get "discovered', just being value will not be enough either.
Zeev |
