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BEHIND THE MONEY: J.P. Morgan Sprains Ankle, Stock Market Bottoms

One of the arguments AGAINST the notion that this past Monday's 12-year low was THE stock market bottom is the observation that it came at the end of a slow downward grind on not-particularly high volume. Market followers often cite total capitulation, or a monster down day on heavy volume, as one of the key markers of an actual market bottom. However, history shows that it is quite possible for markets to bottom quietly.

Birinyi Associates analyst Jeffrey Rubin gathered up the market stories from The New York Times on the day and the day after big bear market bottoms in 1932, 1938 and 1974.

"Little in the way of capitulation can be found on those days as words such as 'discouraged', 'dispirited' and 'indifference' were used," wrote Rubin, in a note to clients yesterday. "On July 8, 1932, the highlight of the day was apparently J.P. Morgan's sprained ankle."


This Tuesday, the day after the stock market fell a mild 1% to a new bear market low, the headline of the lead market story in the NY Times business section read, "Wondering if Crude Could Fall Even More." The stock market story barely made the section at all, appearing on the last page.

These are merely just amusing anecdotes as we navigate the most brutal bear market of our generation, but at the very least it seems to discredit the notion somewhat that bear markets MUST go out with a big bang.

One more question: Is Jamie Dimon walking with a limp?

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