I think our cognitive tendency to compress historical time scales, as pointed out by the history professor I referred to above, is distorting many investors' perception of the speed at which such economic processes unfold. A working hypothesis that the bottom will be in 2000 looks much more sensible to me, until and unless I see some solid evidence otherwise. Beneath the surface and invisible to all but the most astute of observers, severe economic or financial strains have built up. A huge mismatch between perception and reality has developed. Panic selling slows and then stops.
Market volatility declines.
Because markets are no longer falling, there is a natural tendency to believe and hope that the worst is over and the bottom is in. Its been nasty while it lasted, but the damage overall doesn't look too bad. So the markets start to go up again. But there is a problem. Most people are focussed solely on the crash itself.