I'm not sure if the bottom will hold permanently. However, an "investable bottom" is kind of a contradiction in terms. The whole point of investing is you don't try to predict short/medium-term price movements, you just buy at attractive prices. In 5 years the price of the stocks you buy today will be $X regardless of whether we "long-term bottom" soon or it takes another 6-12 months. So IMO for investors it's irrelevant - just buy if you find good stocks at attractive prices, turn off your quotes for those stocks and sit on them. In 2015 no one will give a damn about this credit crunch, but they will care about good stocks that grew earnings substantially over that 7 years.
As for trading this - I see the following possibilities:
1) No crash, we are at/near the lows now. In this case today should close either unchanged or up, preferably up 2%+.
2) Crash by Friday close. In this case today should be down a lot e.g. closing 1125 or lower.
3) Crash by Monday close. In this case today could close say 1125-1150, tomorrow close at say 1080-1125, setting up for Monday meltdown (perhaps on news over the weekend).
4) Market just ranges around, maybe grinding slowly lower. I find this unlikely since the VIX is so high, I expect some big move either up or down.
So IMO today's action is crucial. If there's no weakness, or especially if we rally hard, then it'll be looking like the crisis was cured by the central bank action.
For it to be a crash, ideally we want to see bearish price action in the face of this intervention news. I wrote in my trading plan earlier that the perfect setup would be an up open that does not really follow through, and then a slow drift lower mid-session, with selling increasing and then breaking yesterday's low later in the day. A bearish reaction like this to good news would be a very negative signal IMO, and would set up for a major panic Friday.
So far, the rally has been a bit anemic. If this was the low I think it should have been up 2-3% and lots of heavy buying, but I don't really see that. By the end of the day the market should have showed its hand. A break of the recent lows (1157-63) and accelerated selling into the close (like we saw yesterday) would be a warning that the crash is on.
So, even if you are bullish, I'd say a move to 1150 and below later today is very dangerous and you should consider at least hedging with the Sep ES puts - they are cheap with only 1 1/2 days to expiry.
