Carl Spackler

Is It Time to Buy? What History Shows

All of these signals - high VIX, the gurus buying stocks, market rising on bad news, etc... have been flashing for 5 months. What has that gotten investors - losses. I am always amazed at how many people will try to find the bottom of a market only to get hammered further. To me, it is the surest sign that there is more room to go down.

Too many people still have the psychology that this is another in the line of shallow recessions. Wake up folks! This is a one in a hundred year event. This is a deep recession. This is a deep bear market. Periods such as this when researched show that the bottom is in place when we have at least 6 months of trading within a narrow range. We hit a new low just last month, so I have not seen 6 months of sideways action yet.

Keep on trying to find that bottom. If somehow on your ninth try you actually hit it - yipee!!! The smarter money however will hold off establishing longs until the market shows signs of stabilizing (at any price) for 6 months. Big drops like this take a long time to stabilize and do not do it in a month or two, so you have plenty of time to get on the bus when it actually gets here, mso what's the hurry?