While we were enjoying the Thanksgiving Holiday break, the markets had five consecutive ‘up’ days, by my count – three Obama press conferences; five ‘up’ Dow days in a row. Have we seen the Bottom or is this just a Bear Market Rally? Likely, it is the latter, but, the Bottom can only be confirmed when looking in the rear view mirror, and we are still weaving and bobbing so much to avoid all the roadkill of the last months that we cannot safely steal that glance yet.

A Bear Market Rally is that curious creature that inspires hope, only to dash that hope after a short time and confirm that this is indeed a deep Bear Market and the Bulls have not returned. The Bottom, on the other hand, is the absolute statistical low point as shown on graphs – usually a V or U shape, that we can look back at and say, there it is – that was the Bottom – now onward and upward. It also gives us bragging rights if we got lucky enough to actually buy something at the absolute statistical bottom. It can make a dabbler in investment sound like a true maven – enough to fool the uninitiated and those without any historical reference.

There is dispute among scholars as to where the terms Bull and Bear Markets come from. Among exotic tales is this one from Wikipedia: “London bearskin ‘jobbers’ (market makers), who would sell bearskins before the bears had actually been caught in contradiction of the proverb ne vendez pas la peau de l’ours avant de l’avoir tué (‘don’t sell the bearskin before you’ve killed the bear’)—an admonition against over-optimism.”

Other ideas are that the term Bull Market comes “from the word ‘bulla’ which means bill, or contract. When a market is rising, holders of contracts for future delivery of a commodity see the value of their contract increase.” And Bear Market is where “in a falling market, the counterparties—the ‘bearers’ of the commodity to be delivered, win because they have locked in a future delivery price that is higher than the current price.”

The incoming Obama Administration had better not find too many cause and effect relationships between their press conferences, correctly designed to bolster confidence and stop the panic, and the actual behavior of markets, capricious and illogical at times, particularly when panic and hysteria is whipped up to a frenzy by the media and the economy is the first conversational topic at all holiday parties this season.

The 1929 stock market crash did not produce a market Bottom until 1932. There were various Bear Market Rallies along the way from 1929 to 1932. A Bear Market Rally is often recognized in Dow gains in the 10 to 20% range and the last five days have produced nearly a 10% gain in the Dow, from the 7,000’s to the high 8,000’s, but, we are still a world away from the giddy 14,000’s reached not so long ago.

I have said before, but it bears repeating, that there are some startling bargains out there in stocks, such as some of the financial companies, if you have the stomach for it. B of A, if it can swallow all of the companies it bought, is trading at historically very low prices. If you bought Citi at it’s two Friday’s ago low of 3.77, last Friday’s close north of 8 would have produced a handsome profit. Of course, if Citi’s rise is just what traders colorfully call a Dead Cat Bounce (a crashing stock that revives a bit and then continues crashing – "even a dead cat will bounce if it falls from a great height"), then it will be but a blip on the radar screen before Citi continues it’s death spiral.

If you have the stomach for it and can afford to lose your entire bet, the time to buy is now; if you don’t, then sitting by the sidelines and waiting this out may be best. Either way, this is not a market for dabblers, amateurs or dilettantes – there will continue to be huge swings and really bad government statistics hitting like a punch in the solar plexus at regular intervals. It will seem like the two (market moves and grim statistics) are related; whether they are, or are not, is a function of whether or not you believe the commentators when they imply cause and effect to market moves by saying ‘The Dow rose today on news of . . ..”

Computers that design and execute complex trading programs do not read newspapers or watch Talking Heads TV – but, the markets are far from being scientifically based – they are run by humans and share all of our human foibles, including the tendency to throw a good temper tantrum or to rant and rave when really upset. Some say that is the story of Fall 2008 – one big market temper tantrum.

But, this kind of volatility that we have seen for months now is based on fear and lack of confidence (and some truly horrible statistics) and, if it takes lots of Obama press conferences to prop up the market and keep the Dow rising, I say, bring on those market-calming press conferences. And, if you still cannot bring yourself to open those 401k envelopes, you are in good company – Americans may be setting records for unopened financial mail these days.