Welcome to the Jungle

What would Axl Rose do in these markets? He would probably say go long the market because this G7 meeting over the weekend will solve all our problems!! Um no.

Unless something extraordinary comes out of this meeting over the weekend (which is what the market is pricing in now with the insane rally in the last hour of the day today that lifted us back to breakeven essentially) then I say we come right back down Monday morning to todays lows and finally have the long awaited Monday-Tuesday washout that smart folks like my main man Art Cashin have been calling for since June.

I keep saying that government intervention does not create stock market bottoms in the long term. It only provides a suckers rally that usually comes right back down. I only see one thing that could be announced from Washington DC or for that matter the G7 that would actually be constructive to restore confidence in the eyes of Americans and their investments.

They need to come out and say,

"We are buying SnP 500 futures because we will not let this market go lower. We have met with top money managers and hedge funds from Wall Street and have come up with a plan to clearly show this market has value and is a fundamentally long term buy. We will continue to buy US equity futures to show this value until it is recognized by all who have lost confidence."

The public is scared to own stocks. Period. Yes I know the credit markets are frozen and businesses cant borrow money but the panic in the markets is because of public fear in the eyes of the average investor in middle America. Fear that we have not seen in decades. I dont think 9/11 even measures up to this quite honestly. Confidence needs to be restored and you will not see that until officials put their money where their mouth is.

That being said, I believe we could see something positive next Monday. You should be moving your 401ks back into stocks right now, assuming its not already. This may be the greatest long term buying opportunity we have seen in decades. But you wont make money if you wait till things are rosy again. Dip your toes in now and then scale in further as we recover.

Since this s*** began I have said the bottom will come when all these morons on CNBC stop ASKING whether or not we have reached a bottom (Yes, Dennis Kneale and Power Lunch I'm looking at you).

If you study bottoms and extreme panic anytime the past 20 years, you'll see that bottoms are only formed once everyone is too tired of calling "the bottom". At true bottoms, everyone is in so much pain from riding their stocks into the ground that they have essentially given up on "bottom-calling". The last day or two has been the least amount of this questioning on CNBC, which tells me they have given up.

Its time to buy stocks people, dont tell me I didnt warn you in 6 months or 1 year.