"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey

Here's a question. If you could go back 4,5 or even 6 years ago, and buy stocks at the same prices, would you?

The problem of course is the media, almost in unison, is constantly referring to, and comparing what is happening today, to the "Great Depression".

If you have read books such as "Wall Street Meat", "The Fortune Tellers", or any other books explaining how Wall Street feeds the media with garbage to get the little guy to act, then you'll look at all this talk about the Great Depression II with a suspicious eye.

You need to understand, without conflict of interests, Wall Street cannot make money.

Yesterday, the DJIA dropped below 10,000 for the first time since October 22, 2004. Intraday however, the DJIA dropped to 9,525.32, a level not seen since September 16th, 2003. The lows over the past 10 years came in September and October. Once after the 911 attacks (2001), and again in 2002 after the bursting of the NASDAQ bubble.

September 21, 2001- DJIA bottomed at 8062.34. On this day, the VIX index spiked to 43.76.

October 7, 2002- DJIA bottomed at 7404.94. On this day, the VIX index spiked to 42.95.

March 11, 2003- DJIA bottomed at 7559.64. On this day, the VIX index spiked to 33.75.

Yesterday, October 6, 2008- DJIA bottomed at 9,525.32, but the VIX index hit 58.24.

The VIX index is also known as the "fear index" representing the market's expectation of volatility over the next 30 days. In short, any reading above 40 signals "fear" and a potential market bottom. Any number below 20 signals a high degree of optimism, and a potential market top.

Some said today was not a capitulation day because the sell-off was not on high volume. This may or may not be true, but I could argue that the DJIA bottoming in March 2003 wasn't a capitulation either since the VIX index only spiked to 33.75 at a market bottom.

If the DJIA revisited its 2002-2003 lows from yesterday's low of 9,525.32, what level would the VIX close at then? 110?

What we are witnessing is panic liquidations by hedge funds. This is very obvious if you watched the energy sector today. Here are a few examples;

ConocoPhillips (COP): Low for the day $59.19. Closed at $64.74.
National Oilwell Varco (NOV): Low for the day $32.71. Closed at $37.02.
Schlumberger(SLB): Low for the day $61.30. Closed at $69.50.
Transocean (RIG): Low for the day $79.70. Closed at $88.38.

Today, I am expecting the hedge fund unwinding to continue. When you couple that with forced selling by mutual funds to meet redemption's, we have all the signs of a market bottom all around us.

The latest rumors circulating is the G8 ministers were going to get together and coordinated an interest rate cut. In addition, the Bank of England is expected to cut rates by Thursday, and the European Central Bank has hinted a rate cut is in the works for their November meeting.

On the contrarian side, Jim Cramer is finally bearish. Yesterday he told viewers "to sell into any strength, whenever you get it... in any rally."

Not to be overly critical, but wasn't Jim Cramer the same guy that gave you these "Predictions for 2008?"

-Goldman Sachs (GS) makes more money than every other brokerage firm in New York combined and finishes the year at $300 a share. Not a prediction—an inevitability. In fact, it’s only January, and I think it’s already come true.

Today's close: $124.00

-Oil goes much higher, maybe as much as $125 a barrel... We are running out of oil more quickly than people can imagine, and that means great returns for oil companies. Just buy the stock of the company you filled up at today or buy a driller (Transocean (RIG) is my favorite), then sit back and make money.

Oil closed at $88.56/bbl after peaking at $145.00. On January 2, 2008 Transocean (RIG) was at $145.95. Today it closed at $88.38. Apparently we are not "running out of oil more quickly than people can imagine", due to the worldwide economic slowdown.

-Google stock reaches $1,000.

On January 2nd, 2008, Google (GOOG) closed at $685.19. Yesterday the stock closed at $371.21.

I'll end with this one.

-Apple (AAPL), will reach $300.

On January 2nd, 2008, Apple closed at $194.84. Yesterday, Apple closed at $98.14.

Something tells me Jim's charts are upside down.