Editor's Note: 5 Things will not be published tomorrow (Friday) and will return as usual on Monday.

1. The Fallout

Well, that was fun, wasn't it? I must admit to being taken aback by the magnitude of the negative responses received from yesterday's "Time for Bearishness Has Passed" piece. It far exceeded even the magnitude of the negative responses I received in July 2005 for writing about the inevitability of the housing bubble collapse, though to be fair, our little media company has grown significantly since then.

I want to reiterate that just because I believe that those decrying the bearish case for stocks (not the economy, which is different) are engaging in hand-waving, that does not mean "everything is fine," as one critic put it in an engaging harangue, titled. "Kevin's Fantasy Adventureland," or something to that effect.

I have never said everything will be fine. As I wrote yesterday, "Yes, the economy will turn horrific before improving. But the economy and financial markets are not the same thing." In my book, horrific is far from "fine."

If, as I believe will be the case, we make a new low next year, then I would consider 14-years of net no gain in the S&P 500 Index about as good a bear market we can reasonably hope for.


2. But What About Deflation?

It is important to understand that even during severe deflation not everything goes down all at once... and then stays down permanently. Stocks will go down (they have gone down) ahead of many other items because among most asset classes they are more widely held and easier to dispose of then, say, a business or a room full of antiques.

But the deflationary debt unwind  will, at some point, end. Make no mistake,  it will get far more severe than it is now, and I would add far more severe than the majority are pricing in.

Look, my views have not changed. But I am uninterested in discussing a permanent abandonment of stocks. I am not a permabear. And I am not interested in joining the ranks of those who make a career out of hating stocks.

The DeMark indicators I use suggest to me that there is some probability we reach an important bottom in global stocks in the fourth quarter of this year or perhaps the first half of 2010. That's not a trading call, because you can't trade stocks on the probabilities of a three-quarter time frame. It's an investment call.

Moreover, because markets are dynamic, this outlook may in fact change. Markets are constantly evolving. There is no predetermined course. The bottom line is that this is a time to be imagining what the other side of the collapse looks like. That is what I mean by "preparing" for it. It is difficult intellectually and emotionally to make a sudden shift from bearishness to something more moderate. That's what I mean by preparation.


3. Ok, Let's Look Again

But let's look again at what I have said: U.S. stocks deserve some exposure at prices that are AT LEAST 15% LOWER than where we are now, with some probability that we decline 50% MORE FROM HERE.

Moreover, I said that in terms of weighting, U.S. stocks should remain UNDERWEIGHTED against BOTH Emerging Markets and select commodities.

Incredibly, in any other year than 2009, that outlook would place me deep into bear territory.

Just think about that for a moment. I'm not buying stocks here after a 35% move off the five  days this year they spent below 800. I want to be adding exposure after a serious decline.

If I were less disciplined, I might be inclined to just buy right here due to the sheer enormity of negative emails and responses I have received for merely suggesting those with very large cash positions and extended time frames consider buying SOME U.S. stocks AFTER they decline by at least 15%.