How Do We Nail the Bottom?

SPX is 150 points - about 17% - off the low. That's a bottom. VIX has dropped more than 20% off the record highs. Credit freeze is thawing... sentiment has shifted from extreme panic and fear to just fear. Governments begging banks to accept hundreds of billions.
 
The market is definitely calming a bit but the VIX needs to get under 40 to demonstrate the panic is abating in the market. It's my impression any forthcoming bad news could cause another panic with a VIX over 50.

Do you think some negative earnings surprises could cause a return to the lows?
 
Quote from netedge:

The market is definitely calming a bit but the VIX needs to get under 40 to demonstrate the panic is abating in the market. It's my impression any forthcoming bad news could cause another panic with a VIX over 50.

Do you think some negative earnings surprises could cause a return to the lows?
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Sometime in November/December, when it becomes quite clear to most Americans and to the the world that the economy is in a recession, that things would be bad for a few quarters, unemployment up to 7%, Fed can't cut rates anymore, Treasury and Fed have used up most of their ammo.... there will be a feww weeks of sustained selling, not crash-like, but slow Chinese-torture dripping dripping selling....who knows how fa down this thing can ago? 2002/2003 lows? Maybe.

But, looking on the brighter side, things will start turning around by late Q2 or Q3 2009. I am afraid next 3 quarters may be quite gloomy.
 
Quote from stock_trad3r:

The bottom is in. The funds won't let the market fall much more. There is too much value and too much growth in too many sectors.
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Wow.. you and kudlow must be smokin the same stuff

This is just one more opinion but I dont think we're even close to a bottom. The market reacts to current conditions and when no new bad news surfaces it retraces to the up side a bit. just wait until retail spending slows to a crawl, xmas sales come in way below expectations, commercial realestate joins the glut of unsold, unrented foreclosed space. desperate homeowners finally run out of things to sell to pay their mortgage payment so they put it on their credit cards until they finally max those out and credit card defaults start to really hit the major banks. I just dont see a quick fix for the current mess. Even wealthy people I know have finally come to their senses and realize that the cash spending faucets need to be closed. The average poor american has no faucet at all. Things are going to get alot uglier. I admit that I'm a bit on the pessimistic side. I hope I am wrong but I fear I'm not.

Good Trading to all
 
Quote from Johno:



Just because you're there early doesn't necessarily mean that you are going to be better off.

Trade what you see, not what you think is reflected in your crystal balls!

Regards

Johno
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Fully agree. Making predictions and making money are two completely different things.
 
Quote from Jahajee:

Sentiment: to me, this is crucial. VIX has spiked up to record levels and then retreated, by not by much. VIX closing below 50 would indicate a reversal in progress.
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Huge, imho.
 
Quote from Rimping:

Fully agree. Making predictions and making money are two completely different things.
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Wasn't it Keynes who said "The markets can remain irrational long after you can remain liquid."
 
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