If the market cycles go as decribed by the old-timers and the books about bears, we are nailing a new low in pessimism and, more importantly for trading the up-leg, skepticism.
We are at the point of recognition now, but it is quite recent. Everyone FINALLY agrees we are in a bear market. Anyone who thinks this is not a recent development needs to go back and study the press and SI the last time the Dow was still up around 10K.
Anyway, the next leg up should now be driven by persistent skepticism and too-eager shorting. There is no reason not to expect that we can make targets to the upside that seem lofty. Let's say the S&P gets down to 800, then why not expect that it can kiss a high of 970 or so, just over the putative neckline. That's a run of over 20%. I think tech could do twice as good as that.
I wish I had stuck more firmly to the plan, as it seems this call from November, 2001 was indeed correct, including looking for the high in tech in mid-December, 2001 (yes, the composite, not NDX, did make a higher high in January):
"The prize is the coming decline, not what's left of this rally." ... sigh...
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