I think we are in a bear market but I think/hope we saw the lows of this downturn in July. Most low points get tested at some time or another and I worry the July low needs to undergo such a test. But a point Sir Larry Kudlow drew out of me last night on Kudlow and Co. is that I do feel better about things.
The further away and the higher we get from the lows of July make the likelihood of revisiting those levels less likely.The strength in financial stocks is also encouraging (but that could be a passing phase motivated by short covering.) I also saw some real positives in yesterday's GDP report. The 3.3% reported gain would have been a mere .3% advance were it not for the 3.1% contribution from export trade. Some want to dismiss this as a one time benefit as the dollar has strengthened recently. My view is the dollar was so undervalued that we will have an export wind from a currency prospective for some time to come. Weakening overseas economies will have a far greater impact on our trade balance than the currency and overseas clearly is weakening, but not disappearing. I expect less of a gain from exports, but a gain none the less. (See video)