Bottoms

Symptoms of a Bear Bottom

Financial indicators:

1.)  Heavy outflows from equity mutual funds.

2.)  Mergers & Acquisitions – IPO’s calendar is very weak.

3.)  Credit spreads have peaked and are moving down.

4.)  Shiller PE¹⁰ is down substantially & dividend yield of the market has now improved dramatically.

5.)  Number of stocks making new lows is drying up.  

Mass psychology:

1.)  Investors use any excuse to sell

2.)  Investors can’t bear to look at their portfolio statements.

3.)  The media dishes out a copious amount of negative financial, economic and investment results on a daily basis.

4.)  Bad news becomes common place.

5.)  Markets and the economy will be terrible forever.

6.)  Annuities and savings accounts are now considered the place to be and have become popular.

7.)  Bullish gurus admit they were wrong.

8.)  Known contrarians are wildly bullish yet are perceived by the public as misguided or outright crazy.