Hi allAn interesting pointDoes Lack of Bottom Calls Signal a...

Hi all

An interesting point

Does Lack of Bottom Calls Signal a Bottom?

Coming off its best two-day rally since after the 1987 crash, the stock market was struggling midday Tuesday as traders dealt with yet another new government bailout program as well as more grim economic data:

Third-quarter GDP was revised down to 0.5% vs. 0.3% previously.
The S&P Case-Schiller Index set yet another new record for home price declines.
The FDIC reported a sharp rise in the number of "problem banks" in the third quarter.
Given the economic backdrop, it's very likely the market's recent flirtation with higher prices will end up in the trash heap like all the other short, sharp rallies of the past year.

The one big difference between this 12% rally and prior advances of similar (or greater) magnitude is the notable absence of "bottom" callers. Having been burned repeatedly in recent months, most market watchers are wary of declaring last Thursday's 11-year lows to be "the" lows of the cycle — at least publicly.

The very fact few people are willing to even contemplate a bottom is the kind of sentiment backdrop from where big rallies usually emerge. Even if the recent lows are ultimately breached — as they most likely will be — it's important to remember the most intense rallies often come during bear markets.

And rather than sharply up or down, a prolonged period of sideways action is another alternative that's probably not getting enough attention from investors and pundits alike.

Sara