My call of a bottom in March seemed accurate until just the past few sessions as the indexes have tested or broken through their lows from about three months ago. The Dow, helped by losers Citigroup (C) and Bank of America (BAC) did indeed break through its low. The S&P tested it, and it appears to be bouncing off nicely.

S&P 500:

Dow Industrials:

So why is now the (real, or second) bottom? I think that the planets are aligning - er, mutual fund window-dressing is ending, which will eliminate the recent downward pressure. Such financial losers like Lehman (LEH) and CIT were down 10-15% today on little or no news. The dumping (and possibly subsequent shorting) seems to have little fundamental basis.

So as the S&P and Dow try to squeak out a positive day, maybe this will be the bottom. Many buyouts are failing (fingers still crossed for PENN!), Citi’s now a sell, and nearly everyone has a negative point of view.

Other than the end of quarter, another stimulus, maybe an unexpected positive data point, Fed tightening, or a nice shower of oil that gives the US a nice 10mmb reserve, could cement a turn. Otherwise, the superficial causes of this extra pain may end, as investors rich with commodity gains might reinvest the proceeds into financial (if they follow the sheiks’ leads).

Cullen Notes: I discussed the market internals late last week. Since then, most indicators have improved, with the noticeable exception of the S&P’s TRIX, which has not yet rolled over positive.My call of a bottom in March seemed accurate until just the past few sessions as the indexes have tested or broken through their lows from about three months ago. The Dow, helped by losers Citigroup (C) and Bank of America (BAC) did indeed break through its low. The S&P tested it, and it appears to be bouncing off nicely.