There are a number of items that make me believe we are not at a great bottom. Putting aside the deteriorating fundamental picture, sentiment is still way too bullish for a good low. Rydex traders are still pretty aggressively long and Investors Intelligence bulls are still at 46%. I find this astonishing given that the S&P 500 is 8% off its highs and nearing correction territory.
In the shorter run we have seen the type of selling that typically leads to a bounce. We saw some extreme breadth readings yesterday and a whiff of panic at the close. After eight straight down days I would expect that even if we do not bounce immediately that a bounce is not too far in the offing. I am going to be very quick about reestablishing hedges once a bounce materializes.