The market decline in early August brought out a lot of pundits confidently declaring that the bear market has resumed. Generally the same pundits that made the same declaration during every correction since the 09 bottom. But just like the proverbial stopped clock, they will eventually be right (undoubtedly, they will brag about it, conveniently forgetting all the wrong calls along the way).

Personally, I think it's just too early to make this call, but a few more weeks should do it. I like to look at the monthly MACD on the Wilshire 5000, and it's on the verge of a sell signal (bear market). These monthly signals are fairly rare – the last sell signal was in October 2007, the last buy signal was in July 2009.

It all comes down to the second half of September and possibly October. If the market goes down during the rest of September, we will get the sell signal, but it could still be rescued by a strong October. If September and October are down or flat, it's game over – the permabears will finally be right.

Clearly, the intermediate trend is still down. The uptrend line from 09 has been broken, and the downtrend line from the spring on most indexes is still intact. Until that downtrend line is broken, it's best to stay cautious. I'm not sure whether we will have another leg down (C wave) or we've already bottomed. Since the market cracked in early August, I've been raising cash - which I will deploy when I get a better feel for which way it's going to go [when looking for a downtrend break, the Venture is my index of choice].

I suspect the Ben Bernanke will make one more attempt to rescue the markets this week. We'll see how that goes.

Either way, I still expect a year end rally. It won't be as impressive as last year's, but it should still be worth playing. But if a bear market is confirmed, I will be selling in January, because next year would likely be a bad year for most stocks.