Have we hit an interim market bottom? That is the trillion dollar question. The market got slaughtered after hours with MSFT, MER, GOOG, and COF all seeing large losses after earnings releases after the bell. The markets reaction tomorrow to these companies and Citigroup earnings release before the bell will go a long way I think to answering the question. If the market gets slaughtered tomorrow with selling intensifying I will say we are not at an interim bottom. If instead the market stabilizes and stays flat or moves up (say from a down 100 to finish down 50) than a bottom may indeed be in place in the short term.
I have said for awhile that I thought the next bottom will be made because breaks down and moves substantially lower. The reason is because the market has to be able to grasp something that things have changed fundamentally and will be okay now. August, January, and March it was the Fed. Fed made dramatic moves on oversold markets and the investors bought it thinking the day was saved. The Fannie and Freddie move by the Treasury showed the market was not going to buy it again. Way oversold and the market sold the rally. The market essentially said so what the government is going to help out, it will not change anything fundamentally. This was a dramatic separation from the previous government moves and why we were once again on the verge of a crash like move. If all of a sudden oil goes to 100 fairly quickly you will get the bulls feeling feisty again that now that oil has dropped by a 1/3 this will save the day, the consumer will start spending again, and earnings will be okay. The fundamental picture has changed. Sorry but to little to late in my opinion but I recognize it could cause for a multi week rally in the markets.
As a side note I read something that the last two day move in financials was an 11 standard deviation event that would happen once in every trillion years or something stupid. Two things, one - even if the rally continues the short term trade is to sell financials and two - these seemingly impossible multi standard deviation events happen every few years.