SIGNS A BEAR MARKET IS ENDING

1. Bad news abundant. The stock market always seems to start up before the bad news (about lower industrial production, unemployment, lack of consumer confidence, etc.) stops. At that point, the market will be acting ‘‘contrary to the obvious,’’ which is usually a good sign that the market is right in whatever it does.
2. Credit. Still tight. But credit balances in brokerage accounts usually are
considerable. Large holdings in bonds and other cash-related investments. This latent buying power is what will give a new bull market its stamina.
3. Stock Market. Volume low, not much interest. Stocks selling at low price earnings ratios, high yields. But then new lows in the DJIA and S&P occur on even lower volumes. Some key stocks begin to show good rally potential. Volume tends to increase on rallies, decrease on dips. Charts are the way to spot this.
4. Confidence. Nil. Pessimistic forecasts made for the market and for business.
5. Real Estate. Unless it has been an inflationary bear market, real estate prices will be down. It is hard to sell property. Lots of empty commercial buildings. Rents reduced. Foreclosures rise.
6. Bonds. Government bond buying is popular. Corporate bonds are high, yields low.