The conspirators are adamant that the FTSE has bottomed and is now on for a strong rebound, but I have my doubts. My original expectation was for a 15%-18% dip over 2-3 months and, so far, we've had 10% over about 6 weeks. While I wouldn't be surprised to see Friday's bounce continue to the twenty day moving average, I am not expecting an immediate rebound to recent highs. There is talk in the US from the president of the St. Louis Fed. of continuing quantitative easing, which is said to have prompted the bounce on Friday, but I think the Federal Reserve is unlikely to delay the end of QE, so I would expect the bounce to be temporary. That said, there was extreme volatility on Thursday, which can often mark a turning point, and it would hardly be the first time I was wrong, so it is perfectly possible that the conspirators are right.
Looking at the Dow Price/Earnings ratio though, which stands at just under 15, you cannot say that the market is particularly expensive. (I would say that 12-15 is typical with 6 being extremely cheap and 30 extremely expensive). Consequently, I do not side with the doom-mongers who say that the market is about to crash; this is just a normal correction, which happens from time to time, and I expect much more upside once it is over, though I believe there will be a crash eventually when the market wakes up to the fact that the Western world has issued far more debt than it can ever pay back.