I've been covering the markets for roughly two decades, so I've seen my share of market ups and downs (fortunately, a lot more ups than downs during that period). One thing I've noticed is that market bottoms often assume a similar pattern. Indeed, if you look how markets (and stocks, for that matter) bottom, the following pattern often emerges

1) Market declines big time.
2) Market rebounds big time, I mean a big rally off the depressed lows, but a rally that fails to go to new highs.
3) Market corrects aggressively and retests the previous lows.
4) Market rallies off lows, but not nearly as robust as rally in (2).
5) Market declines, although not nearly as dramatic as decline in (3).
6) Market rallies moderately.
7) Market declines moderately.
8) Market trades virtually sideways for a period of time.

There are several reasons for this pattern. The initial big rally usually falters due to the fact that stocks get ahead of earnings. The market corrects to bring stock values back in line with earnings. The "flattening" phase represents the phase in which earnings and stock prices start to get into sync. At that point, most of the sellers have been flushed out of the stock, which means the stock is in strong hands, i.e. in the hands of investors who are willing to hold and not trade. When a stock or market has reached that point, sustained market moves and even a reversal in the primary market trend from bearish to bullish can occur.

Where are we in the process? I'm afraid we are just winding up step 2 and soon to enter step 3. That is, I expect the market and most stocks to give back some of their gains of the last few months. My guess is that the previous lows in the Dow and Nasdaq will survive a retest, but investors should not be surprised to see the market move lower -- perhaps sharply lower -- over the next few weeks or months.

How long will it take to get through all eight phases? My guess is that things may brighten up by the fourth quarter of this year. At that point, I would expect the flattening process in the market to be well under way and perhaps a breakout move in the offing.

Bottom line: Market bottoms take time. Although everyone is obviously anxious for the bear market to be over, the reality is that more time and more gyrations in the market are needed before this bear goes into hibernation.