The bears, whose numbers are vast, have had to stomach two sessions of short covering and pricing. But let’s look at their strongest and weakest arguments about the direction down.
Strongest- Not since the 1930’s has such contagious financial losses effected the bottom line in the bulge bracket sector.
If confidence is the name of the game in the making of long term success for investments and a willingness to lend money, then the bear may live in markets continuing to appear as if the worst is over only to see repeated failed rally attempts.
Weakest – Capitulation is the only way to a bottom. The end will come with such force and negativity there will seemingly be no hope for recovery.
Tough to base an argument on the ‘ know it when I see it ‘ rule. Bears need to be ready to accept that the speed of intervention by the G and Fed may have trumped the death dive.
Despite all the claims of the bears, great wealth on Wall Street is being created for those who are positioning themselves between bale-out and intervention. Hard to imagine the bears missing that one.
In any event, the ability for the market this week to put the lows behind rather quickly will be the tell on the upside strength. So far, it is still a range trade.
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