Overheard On The Street
Here’s what they’re saying at mid-day:
Richard McCabe, Chief Market Analyst,
Merrill Lynch: “A lot of the very short-term momentum, meaning price and
volume, indicators became oversold about a week ago, and so the market is having
a sporadic and selective bounce back this week. There might be a little more
rally even though there’s no big follow through yet today. There may be a little
more rally in the next few days or week, but I don’t think it’s going to revive
in any important way, the advance that the averages had in their recovery trend
between mid-May and mid-July. I think that was the guts of the summer rally, so
any further bounce back will likely be a counter-trend move, just a blip or a
flurry, and essentially, I think that the market averages are going to work
their way lower bit by bit between now and September or maybe even into October.
I think they could eventually retest the lows they made back in the Spring, like
the Dow retesting 9800-10,000 or the Nasdaq retesting 3200 or thereabouts.
“
“The main thing is that at some point here, I think investor
sentiment has to change from the recent position of optimism or at least
complacency about downside risk, to the usual concern or over-pessimism that you
get at a good bottom. That was missing at the bottom in March-April-May, and
that’s why I think we had such a limited rally, and hopefully, this next time
down into the early fall, we’ll get that complacency to change. We’ll possibly
have a better bottom if that works out for a much more durable, if not major
advance starting late this year and continuing on into maybe 2001.”
Michael Lyons, Senior Trader, Morgan
Stanley Dean Witter: “There’s not a heck of a lot going on here. We can’t
seem to get anything started today. Started off pretty good coming out of the
gate with the good economic numbers, friendly numbers, firmer market, so to
speak. Then that attracted the sellers who are taking some profits going into
the weekend, and it looks like we’re also seeing sellers in the tech area who
look like they’re rolling into other sectors, particularly the financials.
Market breadth isn’t very impressive, up 1200 and down 1100. That’s not too bad.
As for the Dow, it just can’t seem to get a direction here as it just flops back
and forth. The Nasdaq is holding on to gains, but we are just seeing some
weakness. The numbers today were good, but keep in mind it’s a Friday. I think
if we had had these numbers on a Monday, we’d have had a better market.”
John Roque, Vice President, Arnhold and
S. Bleichroeder: “In light of yesterday’s spine-tingling moves, we thought
it would be a good idea to review what we felt was needed for the market
environment to improve. First, there’s been no surge in volume despite the 14%
correction since July 17. Second, like volume, the equity put/call ratio has not
yet surged, suggesting investors remain complacent. Third, stocks have not begun
to ignore bad news or respond favorably to good news. Finally, the bellwethers
don’t act well. So what have we got? We have better-than-average volume,
improving put/calls, the ability to weather potentially negative Motorola news,
good action in our bellwethers, so we see continuation to yesterday’s bounce as
likely, though its durability is still a question.”
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