When the mainstream financial media gets this depressed it’s often preceded a meaningful rally.  Even Jim Cramer flatly proclaimed on CNBC yesterday that “we’re in a bear market”.  Kudos to Cramer for not indulging in the usual pedantics about percentages and just say it like it is.  He even made his point with with a hilarious story about an encounter in the wild with a bear of the actual animal kind which he accessorized with Spam, M&Ms, and Tabasco sauce.  Booyah!  

This potential for a rally between now and year end isn’t at all inconsistent with Cramer’s bearish declaration though, nor with my own bearish outlook expressed here last month.  Bear markets typically unfold in a two steps down, one step up, fashion.  Those steps up can be pretty vigorous and are practically essential to the continuation of the bear since if everyone is convinced the market can only go lower there’s no one left to sell. 

Making investment decisions based on short term market movements is not a good idea, but those looking to trim stock exposure anyway could view such a rally as an invitation to sell the rip.  Just don’t be caught off guard … no market goes anywhere in a straight line and it’s direction today is no guarantee of its direction tomorrow.