One of the few good things about very bearish markets is the proliferation of amusing clichés that attempt to explain them. Some of the hoarier ones include "Buy when there's blood in the street", "Don't catch a falling knife" and my favourite "A healthy correction is when you lose money, whereas a crash is when I lose money"!

Given the amount of money that's already been lost in the share market, and may yet be lost in the Australian property market, and sort of humour at this point in time may seem gallows like indeed. Yet the reason clichés like the ones above come into existence is that they often contain kernels of valuable truth.

The history of financial crashes suggests that unless the underlying economy is in a real mess a la 1929-1933, the distance of the share market’s trough from its peak is usually no more than 25% - which happens to be roughly where the All Ordinaries Index is right now relative to the high reached way back in November 2007. And there are many good reasons to suggest that with the usually caveats, the Australian economy is not going to fall into a bottomless pit.

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China’s GDP rose 10.1% in the second quarter, marking its fourth straight quarter of cooling. China’s growth is the fastest of the world’s twenty largest economies and is supporting global expansion this year as a housing slump and credit-market crisis threatens to send the US into a prolonged recession. Inflation too rose 7.1% in June, slowing from 7.7% in May. Retail sales rose 23% in June, the fastest pace since 1999 which confirms positive consumer sentiment from a high savings rate.

Corporate earnings season, which will continue for the rest of July and into August, will be a decider for the performance of the markets as it remains to be news driven in the short term. Real Estate Group China Overseas Land and Investment Ltd has already reported a stunning 84.90% H1 profit, with US$930m attributable to shareholders signaling the remaining strength in the property sector.

Looking forward, market sentiment could turn providing the oil prices establish a down trend; the US raises interest rates to combat inflation and an improved CPI figure is reported in China. Attractive valuations remain with the Hang Seng Index having fallen 18% ytd and is at a prospective PE of 14.6x. Banking stock valuations should have bottomed and with solid earnings growth for 2008, a rebound is likely. Retailers are set to capitalize from an expected sales growth figure of 18%-19%p.a as GDP per capita closes in on the US$3000 benchmark, pointing to a shift in consumer’s spending patterns.

After scouring the media, I found three writers with a positive market outlook.  Today some lone voices, hot off the press, bring you signs that everything might be alright.

Rudi Filapek-Vandyck looks to the work of ‘gods messengers’ to determine “A hint of bull” in his recent Eureka Report story. The Coppock Indicator was originally designed by Edward Coppock to assist the Episcopal Church in determining the beginning of the next bull market.

Likening a market downturn to bereavement Mr Coppock used the bishops average mourning period of 11-14 months as the basis of his calculations. He reasoned that the market participants' emotional state could be quantified by summing up the percentage changes over the recent past to get a general sense of the market's longer term momentum. The formula is the sum of a 14-month rate of change and 11-month rate of change, smoothed by a 10-period weighted moving average.

Sound a little ridiculous? Rudi points out that the measure has successfully indicated the beginning of each bull market since its inception in 1960. Including the May 2003 commodities boom, the 1995 financial boom and the 1982 - 1987 climb to great heights. “The indicator has now started to signal that the next sustainable uptrend is coming, it will be number seven since 1982.”

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