Reduced inventory is not indicative of a market bottoming. Econ 101 tells us: ceteris paribus, supply is reduced as well as price when there is a negative shift in demand (which is what we’re seeing).
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If the demand decreases, then the opposite happens: an inward shift of the curve. If the demand starts at D2, and decreases to D1, the price will decrease, and the quantity will decrease. This is an effect of demand changing. The quantity supplied at each price is the same as before the demand shift (at both Q1 and Q2). The equilibrium quantity, price and demand are different. At each point, a greater amount is demanded (when there is a shift from D1 to D2). http://en.wikipedia.org/wiki/Supply_and_demand#Demand_curve_shifts
