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For those too antsy to invest like a Taoist, Richard Russell notes a little known market timing indicator developed in the 1970s by a brilliant trader called Alphier, who identified market bottoms by symptoms of "prolonged liquidation."

"Each week count how many days the S&P closed up and how many days it closed down," writes Russell. "If there is a day that the index is exactly unchanged, give that day the sign of the previous day. Forget about holidays or any day in which the market is closed. Each week go back over the past 14 weeks and count how many total days are up and how many are down. If, in the past 14 weeks there are at least 17 more down days than up days, you have a major bottom and a buy signal.

"That 'formula' worked amazingly well in calling all the major market bottoms since 1932."

And what about today?

Russell points out that on Friday, June 16, 2006, gold had declined eight days in a row and closed down on 10 of 12 days, that is, it was lower on 83.3% of the previous 12 days.

This, he notes, is "very impressive and it implies a downside panic - even capitulation.