Have we been to the bottom?

Market performance has been pretty good lately (yesterday being a strong exception), but James Picerno at The Capital Spectator isn't so sure we've seen the bottom of this bear market yet.

[T]he rally this month has drawn power primarily from a new round of hope that Washington's various experiments to right the economy will finally hit pay dirt. Perhaps, but it's not the stuff that powers sustainable rallies, much less secular bull markets. We're closer to that point than we were three months ago, of course. But uncertainty still dominates.The latest chatter may put a floor on equity prices, and for the moment that's what we're looking for, although it'll only be obvious in hindsight. Clearly, the government is integral in the healing process. But expecting the latest press release from the Treasury or the Fed to unleash something more substantial than a bounce is probably expecting too much at this point....

[T]he government's engineering of prices, even for fundamentally sound reasons, has limits. Since the implosion of Bear Stearns more than a year ago, Washington has been stepping into the breach and (sometimes) propping up the market, only to watch the true market sentiment return. Prices, in other words, keep falling....

[F]inding equilibrium isn't solely a function of government announcements, or so history reminds. Ultimately, the crowd has to come to terms with the reality that awaits, in which case prices will fully and fairly reflect the future estimate of what's coming....

That tends to be a tedious and unexciting process, revealed over time. The bottom will be obvious in hindsight. In real time, almost everyone will be clueless.

Mr. Picerno's words are a reminder that although forecasts and speculations may be rife on cable news shows and in the financial press, no one can know the future.

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Joseph Slife is a contributing author and editor for SMI. Visit www.soundmindinvesting.com to learn more.