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More Evidence of a Bottom

I've been reviewing things this weekend to get a feeling for what is happening in the market. The charts above give me a warm and fuzzy feeling that the selling pressure that drove the market crash of the past six weeks has started to ebb. The charts above are courtesy of Mike Burke.

The chart on the left is the current market action compared to the inverse of the NYSE downside volume. The chart on the right is the same except the data is for crash from 2002 that I wrote about several posts ago as being the template for the current crash.

In the chart on the left, you can see that the downside volume (the black line) has begun to diverge from the S&P 500 (the red line). The increasing black line = decreasing selling volume. In the chart on the right, you can see the a similar thing happened in 2002 as the bottom was put in.

Bottoming is a process, as I've written her before, but I believe we are in that process.

Hang in there, the market will come back as the selling subsides.

Mark