Although we finished the day in mixed territory, the ability of the major indices to finish well off their worst levels was a small victory. After a few fits and starts, the market was able to hold at the lows of the day, not fall apart once the final hour began, and rocket higher as the closing bell approached.
Certainly, it is way too early to think that we may have seen a bottom, but after spiraling downward for days on end, we finally saw a little support and anxiousness on the long side. We still have tremendous strains in the credit market and significant problems in the economy, but at least if this market can stop bleeding here, then we will have made a step in the right direction.
It’s going to be a long time before anyone has confidence in this market again, but as I've been saying all along, that kind of disgust and exhaustion is a necessary stage of a bear market. Should we start to see some action to the upside, plenty of investors will take that opportunity to make a more graceful exit, but as we move forward, that sort of back and forth action, should recent lows hold, will be what builds a base.
The bottom line is that, as long as we can stay patient and not be in too big a rush to dive back in, this market will improve and we will find outstanding opportunities to profit.
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