I believe it will take some time for the turmoil in financial market to cool down as liquidity is still of a concern. It is evident from the TED spread chart which is currently at a level of 3. This level was last reached in the year 1987. You may take a look at what TED spread is all about from the link I provided.
Another concern you need to take note is the trailing twelve months S&P PE ratio. It is currently at a ratio of 24.7 which is on the high side I would say. I remember S&P ratio was about 18 in late 2007 and despite of S&P index crashing more than 300 points from peak to trough, the PE ratio is still higher now. That means earnings have dropped tremendously. Some experts commented that the high ratio is meaningless as a major portion of reduced earnings is contributed from stocks in banking sector. You may visit the link if you wish to check PE ratio of various markets.
Let us see the latest S&P daily chart. There are positive trends that you can deduce from the chart. First of all, trading volume had been flat since March but lately there is an evidence of increased volume with a big rise in S&P index. There is also a positive divergence forming on the MACD line. It looks like soon the index is going to test the 200 days moving average for the second time which was held as resistance in late May.
Also with the ban of naked short selling of stocks in US market, it means downward or selling pressure is greatly reduced. I think that is a good move to curb speculators who have been taking advantage of the down trend and abusing the power of shorting without paying financing charges to borrow shares.
In my opinion even though the financial market turmoil is not over yet, now is a good opportunity for long term investors to do some bargain hunting if they have not done so previously. If not, they may miss the ride. As usual, personally I have already picked up some stocks before the rebound and in the beginning of the month.
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