Are we about to repeat? Is the bottom in for the next few months set for a violent 4 to 8 week rally? I am going to say no, at least for now. We could be in for a very violent rally, especially in financials but I do not think the psychological aspects are in place for a long sustained rally. After Bear Stearns it was assumed that all was well. The government stepping in would end the fear and there was nothing wrong fundamentally with the economy. Obviously that ended up being a pipe dream. I do not think the same depth of optimism will come alive again in the minds of so many investors.
We are and have been so oversold and trying to predict anything for the short term at these extreme readings is nearly impossible. Because of the oversold nature if this is a short term 2 or 3 week bottom I could easily see us rally up to the 1325 area in the S&P. If you know why your fundamentally short something that isn't that big of deal. A more sustained rally could bring us up to 1370 and that would be very painful for the shorts.
Well I am in San Diego sitting in a hotel room watching the European markets. Need to go to sleep so I can wake up at 6:00 San Diego time before the markets open. Oh my!!! Horrible time for a business trip.