How do you know when it's right?
Well, for an aerobatic or pattern plane that is indented to fly "honest", I believe OUTCAST is correct. I also fly straight down with no throttle. The airplane should hold the line without pulling out or tucking under.
For those who are more interested in an easy handling model as opposed to honest handling one, a gradual pull-out during the dive test is preferred. This will compromise some aerobatic ability but provide some self recovery. Alway good for fist flights and beginners.