Sunday, July 27, 2008

When will the market bottom get here?

When will the market bottom? Some ascribe to the theory it will happen when we have capitulation. A Barron's column says capitulation is coming.

Ahead of that one giant, desperate cry of uncle yet to come, the bear so far appears to be twisting investors, sector by sector, asset class by asset, until the white flag goes up. Slowly but surely, each of the major asset classes, for example, has found itself down from highs: real estate, stocks, bonds, commodities and the dollar.

Bear markets eventually get to all equity sectors, notes Mike O'Rourke, chief market strategist at broker BTIG. After housing, retail, financials -- and energy last week -- have been hit, technology might be next for a further mauling, given the poor trading action and recent disappointing news out of Apple, Google and Microsoft , he says.

The good news is the process is unfolding. The bad news is that there are plenty of stock groups not nearly as beaten-up as the ones mentioned above, and even a few that are up since the market hit a high last fall. Eventually, the bear will get to most, if not all, and investors will collectively cry "uncle!"

I hope the bottom comes this year and not next (or even 2010). I'm continuing to methodically put money into stocks. Not as much money as I used to put in since I want to hold more cash, but I still put money in so that when the bottom comes I catch it with some money invested.