Meet Your New Leader: It's China

This continues to be an extraordinarily difficult market, unless you are an adept daytrader; being positioned overnight is next to impossible. The large job losses continue to mount, looking even worse as they are now higher-paying jobs. I cannot quite wrap my head around how these jobs are going to be replaced. Eventually they will, but it seems like a very difficult trek right now to hike our way out of this valley.

In September, it became increasingly clear that Lehman Brothers was not going to make it. Many investors believed that it was safe to assume that this was already priced into the market, but buying stocks based on that rationale proved to be a big mistake.

Likewise, I don't believe that the automakers' bankruptcies are priced into the market correctly. Similar to the unanticipated consequences due to the fallout of Lehman Brothers' collateralized debt obligations, it is very difficult to comprehend the employment implications if the automakers fail.

Giving the auto industry money won't solve the problem that they simply are no longer profitable, but it will demonstrate the government's willingness to do something. This might be construed as a positive by the stock market, but the amount of jobs that are at stake seem to range from a huge amount to an enormous amount. A bankruptcy filing would seriously cut into the auto industry's employment numbers.

Simply put, there is no good solution here. I used to think that the more bad news I witnessed, the closer we were to the bottom. Unfortunately, more bad news simply means more bad news for stock prices.

I completely agree with Jim Cramer who is looking toward China for a bottom. Given the duration and overall loss of this bear market, it is prudent to look for emerging market leadership.

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At the time of publication, Horlbeck had no positions in the stocks mentioned.

Todd Horlbeck is president and founder of Horlbeck Capital Management, which he founded in 2002. Horlbeck was previously an investment broker at AG Edwards & Sons for 11 years. He is a graduate of the University of Wisconsin-Madison and lives in St. Charles, Ill.