3 Steps to a Market Bottom

There is a reason why Market Bottoms are known only after it has occurred.

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Step 1:
Not only does the $BPSPX need to stay above the 10d EMA, but the BPSPX 10d EMA also has to at least stop trending down:


Also, the $BPCOMPQ needs to stay above 20 .


Step 2:
VIX 10d EMA has to stop pointing UP.


A decline in the VIX would mean a return of investor confidence.

Step 3:
SPY 84-88 needs to hold.


SPY (AMEX:SPY) also gapped up today, so the gap fill would be around 88-ish.

So while today's market action looks encouraging, we really won't know whether Oct 10/08 was the bottom until at least a week later.