The market has definitely put in a bottom as we look back to the second week of October and observe the price movement of the indexes. The lows made in that second week have been tested but the indexes have bounced up from them each time. Also, we have been getting poor economic statistics this last week and this morning yet the stock market is not reacting to it. That means, unless something is dramatically worse than expected, the stock market has already factored in the weakness. 

Is this ‘the’ bottom in the market? No one really knows but you can look at history and get a sense of where we are. It is rare that the market of stocks sell at these discounts to normal valuations, even in recessions. What is built into these prices is a huge multi year recession bordering on a depression. Of course that is possible it’s just not probable.  

The smart money managers are buying; maybe they are not being so smart this cycle but I believe they are correct. You buy when everything looks the worst. I think we reached that point in early October. Of course there is nothing wrong with being prudent so buy slowly and only those stocks that have great growth prospects looking forward. 

Good Trading
Steve Peasley