Some Capitulation, but Probably Not the Bottom

Tuesday's session included something for both sides of the debate, but left unresolved the lingering question over whether last week marked a so-called capitulation low, a.k.a. the bottom.

Hindsight is going to be necessary to declare when an actual bottom has occurred. But I wanted to revisit the issues of capitulation and bottoms, which remain foremost in the minds of many investors.

Most market watchers believe some form of capitulation is necessary before a bear market can end. But what's vexing to many readers is that "capitulation" has varied definitions. The most obvious form occurred in 1987, when investors bailed out of stocks in a quick and bloody "washout" encompassing a handful of sessions and culminating on "Black Monday," Oct. 19, 1987. Conversely, capitulation occurred in a long and begrudging fashion in the 1973-74 bear market. ...