Has the Market Hit Bottom? (Short Answer: No)

From Barrons:

Testing Time for the Market

The Market's Mood

THE RALLY FROM JANUARY'S LOW was certainly exciting. After all, from its worst levels through last week's high, the Dow Jones Industrial Average rallied 9.7% in just eight trading days. But with Tuesday's drubbing, (the DJIA fell 2.9%, the largest one-day drop in almost a year) it appears that the fun has ended and the bears are ready to resume control, Wednesday's recovery notwithstanding.

The question now for investors is whether current market weakness is part of a bottoming process or the start of something more ominous.

Personally, I'll go with the latter. But holding any view without actively investigating the alternative can be a recipe for investment disaster.

Let's assume for a moment that the market has seen its worst levels and is indeed in the repair process. Within that framework, the Standard & Poor's 500, for example, can fall to near its January low of 1270, give or take perhaps 1% or 2% (see Chart 1)....MORE