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Pastimes : The Philosophical Porch
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From: Rarebird3/14/2008 11:49:21 AM
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Transcendental Market Fragments:

The Market:

Stocks dipped deeply on Thursday, but rebounded strongly. Based on some sentiment measures I track, such as AAII and Investors Intelligence, Investors have become whole-heartedly bearish. That's when you get a change. Thursday's market demonstrated that the bears may have run out of gas.

The Public is now more bearish than any time during the 2000-2003 Bear Market. But the crowd is always wrong at turns. The Armstrong turn date is March 22, 2008.

What happened to cause this sudden shift of sentiment? Well, there has been a couple of successful retests of the January lows, which should have turned the bears bullish. That it turned the bulls bearish is quite irrational from a technical point of view. And, of course, this is the kind of irrationality this market has driven investors to embrace.

Fundamentally speaking, there is no good reason to buy stocks. The Dow and S@P 500 have not even fallen 20% from their highs.

I'd love to see a final cathartic plunge below 1250 on the S@P 500 before I go long. That would represent the culmination of the first leg down in this bear market. If the recent lows hold (in spite of all the bad news) as we approach the Armstrong turn date, that will testify to the strength of this market.
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