Overheard On The Street
Here’s what they’re saying at mid-day:
Robert Robbins, Market Strategist, The
Robinson-Humphrey Co.: “I think that today you’re sort of struggling with
the end-of-the-summer rally. I think it’s going to top out somewhere between the
last few days’ highs or maybe about a percent or two higher, and then you’ll see the
market do its usual seasonal dip into late September or October, which could be
about 5% to 9% below where it is now, or 7% to 11% below a little further rally.
“You’ve got a seasonally favorable day on Friday, but maybe the
inflation number was a little worrisome, but then you got the housing
numbers at 10:00 AM, which the bond market seemed to like. Tech stocks are
pulling things down a bit here with the Nasdaq 100 and Nasdaq Comp now. Tech had
actually been a little stronger than I expected in the summer rally, but I think
it’s been very damaged by the Internet weakness that has broken a two-year
uptrend support line of the relative price of the major 10 or 15 Internet names.
So, you’ve got that restraining tech from being the overwhelming leaders that
they were before. So I favor finance as the best area of the market right now
given that the Fed outlook is improving, and I also think the Fed is finished
hiking.”
Gregory Nie, Senior Vice President of
Technical Research, First Union Securities: “It looks like another
slumbering Friday. The market has been grinding higher for most of the month of
August, and today is more of a mixed day. It’s relatively quiet as one would
expect in the summertime. We’re still in a market that has serious questions on
the sustainability on a near-term basis, plus, even at the plodding pace we’ve
had, we’re starting to edge toward a bit of an overbought condition.
“So, we think you need to look at the market in two ways. First, the
market is working higher, but this rally is probably going to run into an
overbought curb sooner rather than later. Secondly, internal momentum really is
not that dynamic, so sustainability is a different question and a different
answer. We’re probably not going to hold these gains without going through a
round of profit taking, and we’re looking for that to happen in the short term,
if not before, then after the Labor Day holiday.”