Is it true the stock market will rebound before months before the market actually recovers?

Question

for example, if we believe housing and credit crisis will bottom by the beginning of 2009, does it mean stock market today should be bottomed and be in the recovery mode way before the actually event take place because current stock price reflects the future?

Answer 1

Yes.  The stock market is a leading indicator.  People don't buy stock because of what they earned in the past, but because of what they believe the companies will earn in the future.