Wow.  A hectic week is becoming even more hectic this morning.

The U.S. has followed the U.K.’s lead in banning short selling among financial stocks; the Fed is pumping more money into the system, and is accepting short-term Fannie/Freddie paper as collateral; the Feds are backing money market funds; and the market is going to open up more than 5%.

I don’t have any sure-fire answers as to how this all plays out–we are truly in unprecedented territory.  In fact, the last three days in a row, the NYSE has seen more than 30% of all stocks traded there reach new 52-week lows.  Nothing like that has ever occurred.

However, just a quick note here to STICK TO YOUR SYSTEM.  When the market gets this volatile, it’s tempting to jump in (or out), but unless you’re a trader, it’s hard to make money doing so.

Right now, I’m very encouraged by the action.  Yesterday’s volume was among the highest levels ever.  And today’s should be right up there as well.  Combine that with the sheer, outright panic seen this week–the man-on-the-street was truly fearful of a financial meltdown–and I believe it’s possible we’ve seen a real, big-time bottom.

But two days does not make a bull market.  Keep your feet on the ground!  If this is going to be a new bull market, there will be weeks to get in on the leaders.  (Our studies show the best leaders come out three to eight weeks or so after the bottom.)  Right now, we’re seeing an encouraging reaction rally … but we can’t say it’s more than that quite yet.