"Are We There Yet?"

I have fond memories of family vacations when I was a kid. We took practically the whole summer off, pulling a 32′ trailer around the country, visiting many of the National Parks. My dad was a college professor, so he had nothing better to do in the summers than haul me and my sister and my mom all over creation.

However, what used to drive him nuts was the inevitable question from the backseat.

“Are we there yet?”, my sister would whine in her 9 year old voice. This was nothing short of impertinent impatience in wanting to get “there” ASAP, even though we traveled only 50 miles enroute to a 400 mile destination.

Sort of reminds me of the hopeful and impatient bulls in this current market.

Most stocks are now in a bear market and we are approaching something that is a full blown bear market—globally. Check these out:

The Russell 2000 is down -19% from its’ peak on 07/13/07.

Naz……..down -20.30% from the peak on 10/31/07.

The Naz 100…….down -22.24% from the peak on 10/31/07.

S&P 500……down -15.25% from the peak on 10/09/07.

DJIA………..down -13.87% from the peak on 10/09/07.

Globally:

MSCI EAFE……..down -17.34% from the peak on 10/31/07.

MSCI Emerging Markets…….down -21.06% from the peak on 10/31/07.

More than 3/4 of the stocks on the NYSE are trading below their 200-day MA. If we take the traditional definition of a “bear market” as a drop of 20% from the prior high, I calculate the current bear market levels as follows:

NAZ …….2287.30

S&P 500…1249.44

Russell 2000….684.35

So, the Russell 2000 is almost “official”. The Naz, Naz 100 and the MSCI Emerging Markets Index are already there.

Hope for the Bulls is that we are approaching a level of internal market damage that suggests we could be closing in on a low for most stocks. In the last two major sell-offs of 1998 and 2002, we saw 85%-90% of NYSE stocks below their 200-day MA., a point where the indexes began to rally.

Outside of technical considerations, we need to see fundamental confirmation to gain conviction about a sustainable market low. This would include a bottom in global leading indicators and a better picture of corporate guidance.

Both are not to be seen at the moment.

Ominous.

Lady Bulls croon for new highs in Mr. Market....