Is a turnaround in the making?

After a whiplash week that saw the Dow plunging below July lows and analogies to the Great Depression flying on the airwaves and in the pages of the Wall Street Journal, Friday brought us nearly back to even.

The government’s actions to stabilize the markets, including talk of reviving a Resolution Trust Corp.-like agency that would buy and liquidate problem assets, had buyers out in force Thursday and Friday.

So here I am to join the cacaphony of voices that I keep criticizing, the ones who repeatedly ask, "Is it time to buy?"

If recent market action is any indication, I certainly have my doubts.

We did come back from some dismal depths this week, even though we ended up right back where we started.

Indeed, Thursday and Friday's rallies were impressive. Investor's Business Daily, however, was still advising to stay on the sidelines in cash.

I decided differently and took small positions in utility Southern Company (SO), generic drug maker Perrigo (PRGO), clothier Urban Outfitters (URBN), U.S. Bancorp (USB), and business consulting firm FTI Consulting (FCN).

We'll see how it goes.

Many experts see the current proposals on the table, which include the government assuming problem assets of banks for later liquidation and a temporary ban on short selling in the financials, as having more teeth than the myriad lifelines the government has been tossing out along the journey to this crisis.

The $85 billion loan to insurer AIG resulted in a resounding thud in the market. But Thursday and Friday's developments sent the Dow up more than 700 points over the course of two days.

Ken Heebner, who heads the CGM Focus Fund, which had the best performance among U.S. stock funds through June with a 17 percent return, applauded the government's tactics and balancing act through this crisis during an appearance on CNBC.

Again, we'll see how it goes.

More fuel for the bulls

There's been a lot written and said about the Chicago Board Option Exchange's volatility index, or VIX. It's an index that basically tracks market volatility by following what investors are willing to pay for options to offset market swings.

On Thursday, the VIX hit a level not seen since 2002 — prompting many to consider that a bottom had finally been reached in the market, according to a Wall Street Journal article Friday.

According to the article, industry watchers had been waiting for the VIX to jump above 35 or 40 before considering that a rebound was in the works. On Thursday, the indicator hit 42.16 at one point during the day.

Not everyone was convinced, however.

"You can't use history as your guide here," Steve Sosnick, an equity risk manager with Interactive Brokers' Timber Hill told the Journal. "We're dealing with stuff that no one has seen before. This market is like a minefield."

Brian