And now the view from the Bear Camp....

From Marketocracy:

The short term momentum oscillators remain negative, confirming the bearish stance of the AlphaKing Trading indicator. The accumulation/distribution profile remains in sell-mode, with a slew of higher volume distribution days over the past couple of weeks and zero accumulation days. The leadership profile remains very bearish, with Friday's close yielding 84 stocks making new 52 week highs versus 1035 stocks making new 52 week lows.
The 4% rule has turned negative, while Federal Reserve policy remains positive. The VXO volatility indicator closed the week at 26.8, continuing the bull market spike for investor fear. The primary Elliott wave count suggests wave 3 of a new bear market decline is fast underway, which should lead to major new lows in the weeks and months to come. Wave 3s run two, three, and sometimes many times more the points dropped in wave 1, so we're talking NASDAQ 1860-1540, SPX 1050-875, and Dow Industrial 9600-8000 before the wave 3 low would be expected to be complete.
Seasonal trends have us looking for a rally into the first quarter of 2008, while the Presidential cycle also remains bullish, suggesting a continuation of buy the dips working throughout the first half of 2008. The Benner-Fibonacci cycle will remain bullish until 2010, though this prolonged time period may include one or more cyclical bear phases
Summary:
The battle between the bulls and bears that has raged on and off throughout last year ended with a massive bear victory this week, and the great bear market of 2008 has begun. Bear markets come with three to six month vicious drops, followed by a rebound of sorts. Most often those rebounds post capitulation go on to develop into new cyclical bull markets, though occasionally the selling returns and the bear runs for two to three years before hitting bottom. Since most stock indexes closed below their prior low today, and have taken out key necklines of head and shoulders tops, a rapid crash over the next week or so has very real potential. The fundamental news continues to highlight an economy falling off a cliff into recession. The stocks indexes fall on average 45% going into a recession - with most stocks falling much more than the indexes - and we can get there quick, or we can get there slower. Either way bear markets do not end until we see a capitulation and panic selling by the bulls. While today was bad for the bulls, it no where near reached the height of capitulation selling. Indeed, the bears should remain in control of the trend until we see capitulation selling of the leaders, and not just the lagging indexes and sectors. That means a crash of commodity related stocks and the Apples and Rimms of the world is needed before we hit bottom. Maybe we are being too bearish, and maybe the bulls will be able to pull yet another savior rabbit out of the investment hat, though then again all the investment ducks lining up in the same direction just might be telling it exactly how it is.

Kevin Wilde, Chief Trading Strategist, AlphaKing.com

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Makes a good case from a purely TA standpoint - but I have yet to hear any bear case made from a fundamental point. The market is not overvalued as it was in 2001. The SPX is currently trading at PE 15 - and the global expansion doesn't appear to have slowed as evidenced by the continued growth of emerging markets. Having a weak dollar certainly doesn't hurt our exports either. I view the current market action as a correction. And by correction I mean a buying opportunity.

So what to buy? Same as always, growth, growth and some more growth.

Run your stock scans for 20/20 companies - 20% revenue and 20% earnings growth.

If they're selling for under PE 20 they might be a buy.

Unless of course they're a builder.

Unless it's Lego - If they ever go public........... It's a Mon Back, BOOYA Baby!

Man, I hope I didn't just say Mon Back, BOOYA Baby - That's some bad mojo baby.