This must be about the 10th full-scale financial panic I've seen since the mid-1990s. Could anyone that's been with the stock markets for a while ever forget Long-Term Capital Management? How about WorldCom, or the panic after 9/11? Or what about the financial crisis that gripped Asia in Summer 1997 or Russia just one year later? And what about the SARS crisis in Asia back in 2003? There have been plenty more. And during each one, serious and intelligent financial figures around the world assured us that the economic world might collapse altogether.

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A Stock Market or Bear Market Bottom marks the end of a bear market - or even an entire bear market rally - or just a light short-term market downturn and the beginning of an upturn.

A bottom may occur because of presence of a cycle, the end of a recession or because of overselling in reaction to a development in the markets.

It is easy to spot a bear market bottom after an upturn and price rally is well underway. However, it can be hard to predict a bottom when a market is still in the decline. At some point, an attempt by investors to break the downward cycle will be made. These attempts more often than not end in failure because the resulting upturn is sometimes a false upturn - also known as a Bull Trap -, after which the decline resumes.
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