Lately I've been getting lots of "newsletter" emails saying that the market is about to take off because sentiment about the market is getting low." People are very pessimistic and that is a great time for the market to turn.

This might be a little like the same emails that said, "be careful of the gold market because we are due for a correction." Those emails came at a time when gold was about $550 per ounce, on its way up to $725." In fact, when the correction did occur, about two months later, it corrected to about the levels at which the pundits were predicting the correction would start."

So let's look at what's really going on.

1) We're in a secular bear market in which price valuations will generally go down -- possibly for another 10-15 years.
2) That secular bear market will not end until we get single digit PE ratios.
3) We've had 16 (that's SIXTEEN) interest rate increases with no real negative effect on the market.
4) Let's assume that this secular bear market has an Elliot Wave feel to it.
If that's the case we've had one primary down wave (2000-2002) and a correction upward (2003) and 2.5 flat years when PE ratios continued to decline (2004 to date). What we have not really experienced yet is the next down wave.
5) The down wave may have started in the Spring. I certainly don’t see any sign of a turnaround. If fact, the down wave has not even started to hurt most traders yet, and down waves usually have a very painful feeling about them.
6) Crisis always means opportunity and there will be plenty of opportunity in the commodity markets, in my opinion. And you can buy commodities these days through stocks and ETFs.

Van