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When will we hit bottom?

That's been the question at the forefront for investors for months as they've endured decline after decline. The S&P 500 officially entered a bear market in mid-June once the index had fallen over 21% from the all-time high on January 3. This year has been a slow burn for the economy and as recession fears mount, many are unsure how to decipher the mixed economic signals.

As Ben Carlson wrote in?Fortune?recently, "Going back to the end of World War II, the U.S. stock market has experienced 13 bear markets (including the current one). In the previous 12 bear markets, the average loss was –32.7%. It took the stock market an average of around 12 months to go from the peak of the market to the bottom. It then took roughly 21 months on average to go from the bottom back to the previous peak. So the average time for a roundtrip in a bear market to make it back to breakeven has been less than three years over the past seven decades or so."

So where are we now? And what signs should investors be looking at to determine when the current downdraft starts looking like the next upswing?

Stock market breadth

LPL Financial Technical Market Strategist Scott Brown pointed to one important metric of market health: breadth, which had a record day on July 19. “July 19 was the best day for breadth in the New York Stock Exchange since January 4, 2019,” explained Brown. “While breadth has been rather unimpressive during the market’s rally since the June lows, days like July 19 are exactly what we are looking for, and can go a long way toward changing the character of this market.”

An improvement in breadth can position the market for a turnaround, as it has historically. Data on the S&P 500 showed 98% of stocks advancing on July 19, the highest in three years. The last stock advance at a percentage that high in a single day was December 26, 2018, which was the first trading day after the market low on December 24, 2018. Advancers outnumbered decliners by a ratio of 14:1 on the NYSE on July 19, a particularly impressive figure given the 8:1 ratio on July 22, which was the best since May.

Yet one day of market breadth is not reason to declare the bear market over. On July 20, the S&P 500 closed at a high since June 9 of 3960. Yet on July 21 the S&P fell .1% again and the Dow Jones Industrial Average dropped 181 points. July 21's fall came on the heels?of discouraging quarterly reports from firms such as American Airlines and AT&T, which further stoked fears of recession and reminded investors of the inflationary challenges firms have been facing this quarter.

While recession fears and slow growth have maintained investor pessimism, the hesitancy may be unfounded. Economist Mark Zandi told?Fortune's Anne Sraders that despite investor fears and what some economists claim, we are not in a recession. "Right now, they’re all suggesting the economy is slowing, but it’s not contracting. It’s certainly not a recession," he said. He cited current job growth as evidence that we're not experiencing an across-the-board economic decline. "If inflation rolls over, then I don’t think there’s any reason why we need to go into a recession," he said. He also added that if we did go into a recession that "it should be short-lived and modest because there’s no significant structural imbalances in the economy that typically are evident prior to recessions."

Market resistance levels

According to LPL Research, the key determiner to watch to indicate a market rebound is if the S&P can reach and maintain a level of 4200, which is the resistance threshold. While July 19 closed with an index higher than the 50-day moving average, it still did not hit the intraday peaks seen in June. To break the bearish cycle the market needs buyer momentum—which has not yet materialized.

Earnings are another metric to watch, according to LPL Research. “Some expect steady mid-to-high single digit earnings gains for the foreseeable future while others see double-digit earnings contraction as soon as 2023,” explained LPL financial equity strategist Jeffrey Buchbinder. His take? “We believe the revenue environment and corporate productivity are in too good of shape for earnings to contract anytime soon," he explained.

Interest rates

For Zandi, the indicator to watch out for is interest rates. "The market has embedded in it now these expectations of the Fed raising rates a lot over the next year," he explained. Yet Zandi argues we have seen the worst of inflation, and that Federal Reserve rates won't actually raise funds rates to a high of 4%. If we trust Zandi's projections, the market isn't going lower. "If you’re an institutional investor or you are an active investor, I would think this is a pretty good time to start buying in," he said.