Can the market bottom if the worst sectors of the bear market (financials) continue to head south?
Likely not. My studies show that the worst sectors of the bear market need to hit a low point before a new bull market begins. Note, however, that these sectors—financials in this case—don’t lead the next bull market. Back in 2003, for instance, it wasn’t bubble boys Cisco, Juniper, JDS Uniphase and Nortel that led the way higher. It was newer stocks with newer stories that hadn’t gone through the wringer.
