Yesterday the S&P 500 rallied over 3% while the DOW rose 274 points. This move caused the VIX to fall 9% in a session. It is now down over 22% in the last four days as fear and panic in the market has now been replaced by bottom calling.

I am glad to see the market go up. I hope and expect it will go a little higher, but I still believe this is a bear market.

In bear markets you see the market fall for weeks at a time and then have sudden sharp rallies that are characterized by a few big one day moves but overall are very short in duration.

Those big one day moves cause people to think that the bear market is over. They then jump in thinking the market will just keep going up and up and then get trapped. The market turns down on them and they end up losing.

The best thing to do though is to ignore the rallies, use them to get in cash, and to short the market when they end.

The masses cannot think like this in a bear market. They can't help themselves from getting excited about bear market rallies. People associate the market going up with making money. In reality though money is made by being aligned with the larger trend of the market no matter whether that trend is up or down..

In bull markets you don't make money by trying to short rallies. You make money by buying dips. And in bear markets you don't make money by going long either, but by shorting rallies. You just flip things around.

But people cannot do that for the most part. It means going against the media and just about everyone you know.

Yesterday a big reason the market rallied is because Goldman Sachs called a bottom. In a public report titled "Double Dip or Double Up?" they called a bottom and said that investors should dive into the market right now. "Even slow 1-2% GDP expansion should be sufficient to generate positive earnings growth from current levels. We believe that clients should continue to use market weakness to build toward or maintain their strategic equity allocation.," it says."

The report notes that double dip recessions have only happened twice so probably will not happen now. Investors should ignore any signs of weak economic growth.

I have been through two bear markets and neither one of those bear markets came to an end when Goldman Sachs or any other Wall Street firm for that matter called a bottom. In fact in the 2000-2003 bear market, their chief market strategist, Abbey Joseph Cohen, called bottom after bottom all of the way down, causing anyone who listened to her to suffer massive losses.

She would make these calls and the market would go up a lot just like it did yesterday only to be lower a few weeks later. Those bottom calls seemed to be timed at moments in which the market had fallen enough to get oversold and so were poised for any excuse to rally.

Despite her horrible track record she was on CNBC yesterday telling people to buy stocks. She said that the US economy is "doing better than most of the other developed economies, including those in Western Europe and Japan," so you should buy.