If you've been reading my columns here the past month, you know that I strongly believe the July 15th bottom will not hold.

You know all about my judgment that U.S. and European banks have a very rough road ahead of them. But I am relying on more than just my belief that in the potential for global synchronized recession that we have discussed in the past reports.

Another key point to consider is that demand for stocks is just not broadening and accelerating higher the way that it would if a new bull market had begun in mid-July. (See also: "Time to Bet Against the Market.")

Paul Desmond over at Lowry's Reports in Florida, my favorite institutional guide to underlying stock demand and supply measures, observes that in terms of time and points, the latest mid-July to mid-August advance is developing much like the rally that began in mid-March and ended abruptly in mid-May. Yet there are distinct differences as well that bear noting.

For one thing, the mid-March rally actually had a lot more going for it than the current rally. 

• Desmond observes that the previous rally was preceded by three separate days in which 90% of stocks traded down, and 90% of the up/down volume was down, otherwise known as "90% climaxes." And the last one occurred just one day before the market low in March, increasing odd that sellers had been temporarily exhausted. Then a 90% Upside Day was recorded a day after that low, which suggested that prices had been driven low enough to attract broad buying enthusiasm.  



• In contrast, in the current case, two 90% Down Days were registered during June, but none during the last three weeks of the decline to the mid-July market low. This suggests to Desmond that the last three weeks of decline occurred on mild selling, and that the sellers had not been exhausted. And the subsequent rally has not been strong enough to generate a single 90% Up Day (despite two separate days in which the Dow Jones Industrials Average rose 300 points), suggesting that prices were still too high to attract broad investor Demand.  

 So the likelihood that sellers remain very active…