Michael Kahn: Technicals Suggest The Bulk Of The Bear Is Behind Us

Michael Kahn, Barron’s technician, summed up the technicals this way in Wednesday’s column:

I think the real message lies somewhere in the middle with the bearish trend ending and a sideways range beginning…..

This is hardly a bull market forecast.  Rather, it is a view that the bulk of the bear market is actually behind us and the healing process is already underway.  While it leaves the door open for another significant decline at the conclusion of the bear-market rally, I do not believe that it will set a new low.

– Michael Kahn, “A More Bullish Picture Emerges” (subscription required), Barron’s, Wednesday March 18

That’s my view as well….. Remember: This is not a forecast for a new bull market!  Do you hear me Tim Knight? 

The idea is that the bear is mostly over and we are now in a period of healing in which markets are likely to be range bound.  There will be rallies and selloffs but both should occur within a broader range of about 600-900 on the S&P 500.  To say it another way, in terms of price the bear market is mostly over though it still has more time to run.