New bull market?

I'm already hearing the calls for a new bull market :-)

So is it or isn't it?

I'll give you my thoughts and you can decide for yourselves.

At secular bear market bottoms P/E's always become ridiculously cheap. That means single digit cheap. At the recent lows the P/E on the S&P was roughly 18.

We have an imploding credit bubble. The last time this happened it led to the Great Depression. Everything the Fed is trying today was tried in the thirties. Nothing worked then and I dare say nothing is going to work now. There is no magic bullet.

At true bear market bottoms Lowry's selling pressure has turned down at least a month before the nominal bottom. Buying pressure at bear market bottoms starts to surge higher before the nominal bottom is put in. Neither one of these two happened at the Mar. low.

At true secular bear market bottoms the Dow:gold ratio has approached at least 2:1. The recent low came with the Dow:gold ratio at 7.

At true bear market bottoms nobody believes the bottom is anywhere in sight. Amazingly enough after less than two weeks everyone seems to think the bottom is in.

At true bear market bottoms the public will never want to see a stock as long as they live. I suspect most Americans are still holding on to their 401K's.

At true secular bear market bottoms volume will dry up because everyone has given up all hope and no one is interested in trading stocks anymore.

Bear market rallies are characterized by violent moves higher. The S&P rallied 7% today. There wasn't one single day during the last 5 year bull market where the S&P rallied that much. As a matter of fact, I don't think there was even one day where the market rallied 4% or more.

Dow Theory just reconfirmed the bear market.

'V' bottoms are the hallmark of a bear market rally. True bull markets need to build a base.

The next four year cycle low isn't due until late 2010 at the earliest.

Just so you know there were 13 counter trend rallies in the 1929 to 32 market. Trying to continually pick a bottom is what bankrupted many otherwise sophisticated investors.

Just like bull markets go up much further than anyone expects, true secular bear markets fall much further than anyone can foresee.

So you can decide if you think this is a new bull market.

FWIW I'll be watching for the signs that the rally is topping and the next leg down is beginning.