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It is my opinion that we have not seen the bottom in these markets. There are still many unknown factors out there, and there will most certainly be surprises both in terms of earnings, further deleveraging and more tinkering with our financial system from the government.
Right now, there is a new bailout package being discussed, so we can expect more uncertainty and volatility to come. That said, we are now in the seasonal and price pattern for the markets to at least stop going down for a while. In fact, it is possible (as I have written in my blog posts) that we could slog our way up for the next weeks and even into early 2009.
There will be down days, and that is where the psychology will be important to understand. There is more about this below.
But first:Encouraging signs that the worst is ( temporarily) over are:The markets are bouncing today from oversold conditions. This does not necessarily mean anything in a bear market, because oversold conditions can remain so for considerable periods of time while everyone is trying to call a bottom and getting stopped out.
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