Why We Should NOT Call This the Bottom

The Dow ended the week hitting a 10 year low during Friday's session. Because it hit a 10 year low does not mean it will not go lower. There are many reasons for it to go lower. Until the government comes out with specifics regarding how to reform the financial system, the market will be volatile and uneasy and will pursue the 7000 point mark. Lets think back to the reasons the market is down this far. First, the bursting of the housing bubble and adjustable mortgage rates ultimately ravaged household wealth. Second, the banks are in waist deep debt because consumers can't pay their mortgage or even credit cards. Third, no one is willing to lend and credit has been put on hold. Finally, the economy gets pummeled when no one has money to buy anything.

To be bullish on the economy, financial markets, or anything else, you first have to go back through the reasons we are in this mishap. The government has put out a rescue search for the economy, but every time they find a clue they have to tell everybody about it and then debate on how it helps out the search. We don't have time for this. They need a fast, specific plan on how to use that clue and go on. They are wasting time. Until we get specifics, there will be no bear market or even a recovering economy. If you evaluate the previous mentioned problems, are we even close to fixing them? No. All we have is speculation on how it can be fixed. This market is a death trap until these problems get solved. Keep reevaluating these problems as they eventually should be fixed. However, it will be awhile before this happens. At any rate, it takes time for a bottom to appear in the market. It does not happen overnight. Be patient and wait for the signs before committing to the upswing.