BOTTOM PATTERN - 7/15/08

It is instructive to look at bottoming patterns.

On 7/15/08, we hit what was to be the bottom to this BANK PANIC. On 9/21/01, we hit the bottom of the 9/11 disaster. Whereas today, it takes 2 days to bottom in these panics, back in 2001, it took a week of trading.

Several things to consider:
1. New ETFs like UYG allow anyone to short.
2. Electronic/Algorithmic trading means that people move in/out much quicker. It also means that there is a more prevalent use of STOPS.
3. No downtick rule means that people can just buy UYG like crazy and cause arbs to go nuts.

The market is adaptive. We are in a new, highly volatile trading regime. It is a war of attrition, just like in Paths of Glory.