Trend: The devastating capitulation that signals the bottom of a market decline hasn't occurred yet, so market history suggests that we aren't near the bottom.
Bear market expert Bill Fleckenstein at MSN Money describes how he will know when the market hits bottom.
Link: Bear's end? Wishing won't make it so - MSN Money.
These are markets, and they can do what they want, especially when there are as many moving parts as now exist. But I think the probability that the worst has been seen is extraordinarily low. (Though perhaps some companies will not make new lows; that we will just have to see.)
And no matter how good a rally looks, it must be remembered that the best ones always occur in bear markets. (As I noted last week, "A bear market rally . . . will be captivating, causing people to believe the worst is over, but will almost certainly be a head fake.")
Here's what I think will be part of the final capitulation process: Valuations in the tech sector will experience the cleansing drop that other companies in corporate America have recently undergone, especially if more progress is made on the nationalization of the banks in the meantime.
So, for those who'd like to see this decline end (and who wouldn't, really?), a rout in tech stocks might be just what is needed.
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