"The wise trader and investor assimilates the data then acts accordingly. It is a real-time approach. Predictions are subject to great error. Those who stake their reputations on predictions often find themselves psychologically wedded to such predictions. Therefore should one make a prediction, one should always be ready to change their view on a dime. Price dictates such actions. If your stop is hit, you might be wrong. Move onto the next opportunity or circle back if a second or multiple entry points arise while the risk/reward remains favorable. The trade of a lifetime often comes every few weeks, especially near market lows. Stay nimble and open to all possibilities. "

Breadth and volatility are displaying characteristics that haven't been seen since 2011 or 2008. Therefore, while buy signals can be traded, we are continuing to be cautious.

                                                      chart to watch for clues

Watch Thomson Reuters Equally Weighted Commodities Index for clues.

Thomson Reuters Equally Weighted Commodities Index, will go miles towards telling us if we are headed towards very tough times or if the huge declines of late are actually in a bottoming process.
The index tracks a basket of 17 commodities, including cocoa, coffee, copper, corn, soybeans, cotton, crude oil, gold, heating oil, lean hogs, live cattle, natural gas, platinum, silver, soybean oil, sugar and wheat.

The index has been headed south over the last nine years, reflecting general weakness in commodities. In 2009, a then-29-year-old support level held, indicating that the worst of the financial crisis was priced in.
It’s testing that level again now.If the index holds at 2009 support, it would suggest that lows are in play and the worst has already been priced into the markets. If the index breaks this 40-year support/resistance level, it would suggest that some really tough times are ahead.

"If we analyze a century worth of data, we will see that all crises were followed by major averages bottoming then moving higher which brought major buying opportunities."

In summary, cash or a "core" bearish position should still be held, but these short-term counter-trend buy signals can also be traded.

"A number of funds have a 60/40 stock/bond allocation rule. Since their stocks got hammered, the 60% has shrunk so these funds will have to buy stock to keep up with their 60/40 allocation, so we could see yet another up day in the major averages before the end of the quarter which would further improve the odds for a short-sale position succeeding, though in this time of crisis, some analysts have said this rule may be lifted."