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Analysts Not Sure if There's a Bull or Bear in the Future

August 22, 2000|JOSH FRIEDMAN

Where is the stock market headed?

Market timers and technical analysts are picking up mixed signals.

"We could well be in the early stages of a bear market," said Dan Sullivan of the Seal Beach-based Chartist newsletter, noting that the technology-dominated Nasdaq composite index is already there, still off more than 20% from its recent peak.

"There is tremendous confusion," said Alan Farley of Hard Right Edge, a Littleton, Colo.-based Web site geared toward short-term traders. He notes that although rallies may kick off in many stock sectors, they generally don't last long.

Some timers worry that investors are counting on the fourth-quarter rally typical of presidential election years, as well as the October blastoff common in recent years--and that they could start panic-selling if such moves don't materialize.

Others see a dismal market for an extended period.

"We could be in for a long sideways move, maybe five or 10 years or longer, punctuated by bear markets," said John R. McGinley Jr., editor of Technical Trends, a Wilton, Conn., newsletter that has suspended publication.

"Historically, it would make sense after such a dramatic bull market, and valuations are now stretched to where there is little or no upside," McGinley said. "The fear-to-greed quotient has gotten out of control on the greed side."

But Louis Navellier, editor of the Reno-based newsletter MPT Review ([800] 454-1395;; $275 a year), has a bullish take.

"We could see a rally after the Fed meeting when the uncertainty [about interest rates] is lifted," said Navellier, an aggressive trader who uses technical analysis tools but doesn't consider himself a market timer.

He expects other factors to contribute to a strong fourth quarter, including robust corporate earnings reports in October and a campaign-season bounce after Labor Day as the presidential race intensifies.

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