Reprinted from MarketWatch newsletter.
While bears likely have some more room to roam, investors are hoping for at least some short-term relief from the series of brutal sell-offs that have occurred over the past two weeks. But a number of investors have been searching for signs of an actual capitulation, which would mark a longer-term market bottom.
One Dow Theorist believes that Tuesday's 7 October 2008, trading session may very well have offered such a capitulation. Peter Brimelow reports that Jack Schannep, editor of the Schannep Timing Indicator, proclaimed that yesterday's collapse marked the end of the bear market.
But could the daily search for a market bottom actually be hindering its formation? After all, as Brimelow notes, Richard Russell, another well-known Dow Theorist, believes that bear markets "end in only one way -- in exhaustion.
"If that's the case, then the Hulbert Stock Newsletter Sentiment Index suggests that though there is plenty of gloom to go around, investors have yet to reach the exhaustion that marks a true capitulation.
In fact, Hulbert says that his sentiment index is actually a few percentage points higher than where it stood in early July when the market was trading nearly two thousand points higher than today.
As Hulbert puts it, contrarians believe that investors will have to become far more bearish before an enduring bear market bottom can be achieved.
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While bears likely have some more room to roam, investors are hoping for at least some short-term relief from the series of brutal sell-offs that have occurred over the past two weeks. But a number of investors have been searching for signs of an actual capitulation, which would mark a longer-term market bottom.
One Dow Theorist believes that Tuesday's 7 October 2008, trading session may very well have offered such a capitulation. Peter Brimelow reports that Jack Schannep, editor of the Schannep Timing Indicator, proclaimed that yesterday's collapse marked the end of the bear market.
But could the daily search for a market bottom actually be hindering its formation? After all, as Brimelow notes, Richard Russell, another well-known Dow Theorist, believes that bear markets "end in only one way -- in exhaustion.
"If that's the case, then the Hulbert Stock Newsletter Sentiment Index suggests that though there is plenty of gloom to go around, investors have yet to reach the exhaustion that marks a true capitulation.
In fact, Hulbert says that his sentiment index is actually a few percentage points higher than where it stood in early July when the market was trading nearly two thousand points higher than today.
As Hulbert puts it, contrarians believe that investors will have to become far more bearish before an enduring bear market bottom can be achieved.
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