The mercury is climbing, the blossoms are bursting—so when will Wall Street finally celebrate a springtime of its own?

For eight long months now, a ferocious credit crunch, unprecedented since the Great Depression, has trapped investors in a deep freeze. Not only stocks and real estate, but even some of the (reputedly) safest bonds and money market instruments fell victim to the Arctic blast.

Happily though, I’m detecting hints, here and there, of a thaw. It’s taking a lot longer than I had hoped, but we will see the end of this new Ice Age. As a balmier climate sets in, we can look forward to healthy markets again—a return to the steady, consistent profits we enjoyed from 2003 to around mid-2007.

Let me show you what’s behind my optimism and how soon the improvement is likely to begin. I’ll also map out a three-point strategy that will give your portfolio the stamina to survive—and thrive—even if the markets should remain chilly a while longer.

Listening to Mr. Market

A careful reading of the economic evidence leads me to believe that we are well past the midpoint of the credit crunch and related disruptions in our economy. Good times are coming! Two indicators in particular lead me to this conclusion:

#1: Massive cash reserves are building up in money market funds.

At last glance, investors have poured $3.4 trillion into money funds—the traditional parking spot for cash awaiting investment in the stock market.

How significant is this number? Let me put it in perspective for you:

As a percent of the total market value of the Standard & Poor’s 500 index, money market fund assets now stand at virtually the same level as they did at two historic stock market bottoms: in August 1982, when the great Reagan bull market began; and in March 2003, when the first bull market of the new millennium lifted off.

What this means to investors today: There’s definitely enough fuel here for an explosive stock market rise as soon as a trickle of good news begins to coax investors off the sidelines. With money market yields dropping like a stone, the pressure to put cash to work at higher returns will prove irresistible.

#2: Buyers have already started to flex their muscles on Wall Street in recent weeks.

Normally, within a few sessions after a major stock market fall, investors are treated to at least one “power day.” This is when the number of shares traded in stocks with an advancing price overwhelms volume in declining stocks by at least a 9:1 margin in the NYSE.

Now, throughout January and February we  didn’t see one single power day. But then, two occurred in the span of one week: on March 11 and the 18.

Power days don’t guarantee that the final market low is behind us. However, this latest duo, coming just before and just after the Federal Reserve defused the Bear Stearns bomb, may actually suggest that Wall Street is seeing the end of the credit squeeze.