No Crash Yesterday, But Was It a Bottom?

Drat, we didn't crash. Really, yesterday we had our best chance to flush out the weak hands that dominate this market. We didn't get rid of the hedge fund sellers of the brokerage stocks -- now bailed out by Goldman Sachs' (GS - commentary - Cramer's Take) numbers, which were pretty fabulous, despite last-minute rumors that they would be terrible. We didn't get the sellers of the oil stocks that would make them stabilize; in fact, they appeared en masse with a $4 crack in the commodity. We didn't get the down 500-point capitulation crescendo that would make it so it would be safe to buy an Apple (AAPL - commentary - Cramer's Take), which I think has bottomed, but which I -- like everyone else -- worry could still go down more, or a Research In Motion (RIMM - commentary - Cramer's Take), which I think is doing well.

Now, it is possible that what we did get was a test of a decline and a hold. That's the most positive interpretation, and I want to believe that there is now a possibility of a real bottom. The Bear (BSC - commentary - Cramer's Take) shock did create panic. It also showed you that there is a way out of a collapse; if we were to get one for all but the biggest bank, Citigroup (C - commentary - Cramer's Take). It showed we can find a way out of a National City (NCC - commentary - Cramer's Take) or a CIT (CIT - commentary - Cramer's Take). We also could get a real cut from the Fed, 100 basis points, that will make a difference. I just question whether the panic was deep and long enough to get rid of those who have challenged us by selling into every rally. I just wonder whether any shorts covered and whether they won't be right back again after a little lift.

But what I really think we got was the oversold bounce, the endless oversold bounce that happens every time we get to minus-5 on the oscillator. This oscillator bounce is pretty much etched in stone as a truism, once again stopping a crash, as it has done every time since the 1987 crash when the oscillator betrayed us the week before, a terrible week that turned out to be just a prelude to a much worse one.

If we HAD gotten the capitulation, I would have said that's about a 75% chance of a real bottom. That means the action yesterday and today is just prolonging the pain.

We need to get in shape, and get out the weak hands because some stocks like Washington Mutual (WM - commentary - Cramer's Take) and Nat City and firms like E*Trade (ETFC - commentary - Cramer's Take) and CIT seem like they are really rolling over, and I want to know if the market is ready for those if they fail. Is the market even ready for a Downey (DSL - commentary - Cramer's Take) to close, given it has 10% nonperformings. Is the market ready if Bank of America (BAC - commentary - Cramer's Take) walks away from Countrywide (CFC - commentary - Cramer's Take) or if Wachovia (WB - commentary - Cramer's Take) cuts its dividend. How about, for heaven's sake, a Citigroup problem of a big magnitude?

Here's what I think will occur: We bounce, the futures lead us, people get bullish again until the next bad event, and we just keep replaying things.

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