File under the “a picture is worth a thousand words” category, or at least worth a 300 plus day in the Dow. Again, not that we think the volatility will subside any time soon, nor do we think that companies values and earnings numbers are really close to their bottoms, but you do have to question the market psychologists. In terms of market psychology, I have seen many studies and research services that track sentiment in print, media, television and other sources to correlate market movements with the general tone of media. Almost all of them demonstrate that, at a certain point (and they each describe that point differently) there becomes a good news / bad news saturation of media. In other words, the human investor can simply not absorb any more bad news to make them sell.
Last week we say many screen shots from the web that highlight this phenomenon. The question remains, are we fed up enough with bad news to believe that “its got to get better from here.” And does that have any economic correlation to the real world?