The important thing to do is to let the market reveal itself by its own behavior, to let the story unfold. It is delusional to say at this stage of the game that a new bull market has started -- not to mention that a generational low is at hand -- unless you can see the future.

Timing, as they say, is everything. As one well know market participant said, “Don’t tell me what to buy; tell me when to buy it.”

In the first week of October 2002 when I turned bullish on The Street.com, I had little if any company. It seems to me there may be too much eagerness to embrace this current rally as not only A low, but the low. In October 2002, I had no idea that a new bull market had begun. I was looking for a rally and I expected a test in March of 2003 to play out and from that point I would let the market speak.

The S&P has not even turned its Monthly Swing Chart back up. It has not turned its Quarterly Chart back up. It has not overbalanced in time or price any prior corrective upward reactions. It has not offset the last leg down as yet. The best that can be said is that this is another ribbon of black.

To be sure, there was a cycle turning point near March 11th that we were looking for and a time/price square out occurred at that point. We have seen a procession of lows but, a bottom is a process even if it a bottom of a bear market rally rather than a new bull market.

After the bounce (B) from point A in 1930, I suspect most market participants viewed that as another higher low. But notice the breakaway gap that snapped their hopes - similar to the breakaway gap in our markets in February that augured new lows.

At point C in 1930, it looked like a double bottom as the rally that followed looked like a successful test of the crash, didn’t it. When that double bottom broke, the deal was sealed: It would take time for the bear to complete its course.




Then at point D, there was hope that 3 drives to a low may have been carved out, as evidenced by the ribbon of black into point E. In all, there were 6 such ribbons of black sprawled across the red room of the bear market into 1932. Only the 7th rally from July 1932, overbalance in % terms the prior rallies and even then there was a test that played out into March 1933 (another March turning point).