If layoffs are increasing, consumer confidence and spending nosedive, and Jack Welch of G.E. is correct that we're in for the worst consumer recession since 1980, with the brunt of the washout not coming until this summer, it's difficult to conceive of corporate earnings beginning to recover until sometime after the first quarter of 2002. The market usually anticipates an earnings recovery by beginning its next bull market six to nine months before the fact, which supports my expectation that the bear market will resume, and not bottom until the September to November time period. We also have to consider seasonality. The market's mean season is approaching. As I remind you several times a year, even in bull markets the market has a very consistent pattern of suffering most of its corrections between May and October.
Bear markets tend to follow a similar pattern.
So again I say, enjoy the rally, but don't become complacent. Mr. Harding has been consistently ranked in the Top Ten Timers for years. In Riding The Bear, Mr. Harding reveals that while many Wall Street pros urge investors to hold steady during market declines, these same Wall Street pros and institutions sell quickly at the first sign of a market turning.