How would one know if the 7449 low recorded on November 21 is destined to become a major bottom? Already, a couple of our more technically astute colleagues have speculated as much, and one of them, Porter Stansberry, even thinks the low will come to mark one of the best buying opportunities of the last 30 years. Another, Peter Eliades, has sounded this spooky technical note: The last time a market crash like Monday’s produced a positive McClellan Oscillator reading was on August 12, 1932  –  “a month after what was perhaps the most important market bottom of the Twentieth Century.” Peter says that although the jury is still out concerning the meaning of Monday’s +25 McClellan reading, he cannot rule out the possibility that history is about to repeat itself.

From a Hidden Pivot perspective, there is no evidence yet that an important turn is at hand. However, we can still offer a simple benchmark for determining when the Industrial Average would warrant our serious attention. The chart above shows how a thrust of just 329 points could turn us quite bullish overnight. Specifically, the Indoos would need to push past the three numbered tops without a correction lasting longer than a single day. The first of those peaks lies at 8831, and it doesn’t matters how long it takes the blue chip average to get there from current levels. But once the Dow has exceeded 8831, which you could view as a starting line, it must sprint past the remaining two peaks without pausing for breath. Any less would imply the rally is just a garden-variety bear squeeze. (If you’d like to be signaled when this occurs, by way of having Rick’s commentary delivered free to your e-mail box each day, click here.)