Overheard On The Street
Here’s what they’re saying at mid-day:
Robin Griffiths, Chief Technical Analyst,
HSBC: “Not getting a President when you should have had one did interrupt
the normal pattern. In the normal pattern, you get a climactic low in October,
and then you get a run-up through the election and all the way to the
inauguration of the new man, at least a brief honeymoon. That normal pattern got
interrupted. The lows made on the 19th of October have held for the S&P and
the Dow Jones, but they have failed for the Nasdaq. So the Nasdaq is still in a
downtrend. If indeed they eventually decide the lawyers can shut up and it is
Bush, then you will now get a relief rally. Maybe that’s what today’s mark-up
is, but it will basically go further, probably up through Inauguration
Day.”
Brian Belski, Fundamental Market
Strategist, U.S. Bancorp/Piper Jaffray: “Equity Funds displayed $8.5
billion in net redemptions last week, which was the largest outflow since
12/15/99. We believe that the negative sentiment, trend and performance of the
stock market has finally begun to take its toll on investors, as evidenced by
the large fund outflows. Consequently, with money market funds accumulating
$41.7 billion of cash since the beginning of the month, we believe there is an
ample supply of money on the sidelines waiting to participate in any rally that
the equity markets are able to muster over the next several weeks.
John Roque, Vice President, Arnhold and
S. Bleichroeder: “We think the Nasdaq rallies right here because the 10-day
moving average of put/calls has rallied back to mid-October 2000 levels, which
says investors are as concerned now as they have been at any point during the
Nasdaq decline. In addition, since 1935 there have been 28 times when November
was a down month (43% or 28 of 65). Of these 28 instances, a positive December
has followed a negative November 17 times (60%). Also, on November 22, the Nasdaq
recorded 541 new lows. This number is the highest total during the current bear
market and is the highest since 1326 new lows registered on October 8, 1998. For
these reasons, we think there is an upside trade for Nasdaq currently.”