We now enter the most challenging part of the bear market: The tedious middle.
This is the portion of the bear cycle where we’ve fallen far and long enough to have scared off the BTFD crowd. There is an excess of bears. More importantly, a variety of technical indicators are near as oversold as they ever get. It is encouraging to those who are hoping the worst of it is behind us.
So we rally.
I suspect this may not be anything more than a relief rally, a way to work off a deeply oversold condition. We discussed this concept generally ~two months ago in “Too Many Bears.”
It’s a bottom, but is it THE bottom? I dunno…
Consider a few indicators that most of the time, are not especially informative, but at extremes, can be very useful:
• Away from