The jury is still out. The prior low held on Friday. If we breach it we could of course go much lower. It seems more likely that it will hold for now at least, and we may retest once or twice more in coming months. There is a lot of money on the sidelines at present, and perhaps we are nearing the end of the forced selling. That sideline money will push the market higher when the time is right.
I don't agree with those who believe that money will never return, because i believe greed will overcome despair, and when the market finally begins to rise, and it will, those who waited too long to sell, as they always do, will wait too long to buy, as they always do, and furnish the fuel along with inflation to continue the markets rise. I don't see another bull market for a very long time, but i do think 2009 will bring us a bottom.
I see some well capitalized banks selling for 1/12 their book value. This is ridiculous, assuming the data are correct. I would expect most of the better capitalized and managed banks to recover eventually. Of course if they are nationalized that won't be good for common share holders.
