End of the Panic of 2011?

The case for carving out a bottom right here:

1.       Capitulation volume

2.       Fibonacci 78.6% retracement of the rally since May 2010

3.       Market deeply oversold (I know, can stay oversold)

4.       Channel support from the bull market channel going all the way back to the March 2009 low

5.       S&P Bullish Sentiment rock bottom @ 4%

                                                                                                                                                                                                                               

SENTIMENT 4% BULLS			Moving Averages
8-Aug-11	4		10	23	40
24-Jun-09	4		51	63	73
9-Mar-09	4		6	6	8
3-Mar-09	4		5	5	10
20-Nov-8	4		9	11	11
10-Oct-8	4		5	9	15
18-Sep-1	4		7	10	17
4-Apr-1	4		26	35	31
21-Dec-0	4		16	29	29
1-Sep-98	4		25	31	31
28-Oct-97	4		40	42	48
8-Jul-96	4		50	55	47
12-Oct-92	4		27	33	37
10-Nv-87	4		24	32	31

We are not in a deflation. There is no monetary contraction. Banks are turning deposits away.

A wall of money will hit the market if QE3 is announced, taking all risk assets right back up.

Or all hell could break loose and we can break below 1000 J who knows?