Overheard On The Street
Here’s
what they’re saying at mid-day:
Frank
D. Gretz,
Market Analyst, Shields & Co.: “The
lack of any rally is almost amazing. The
market is oversold, extended down and, you would think, should be discounting
the upcoming March 20 rate cut. Still,
these technology stocks can’t lift their proverbial little heads.
Extraordinary, or is it symmetry? Tech
is going down the way it went up. On the
way up, tech got extended and then more extended.
It didn’t stop until everyone believed it always would be that way.
Sentiment may be changing, but no one yet believes that this is the way
things will be, always.
That will change over time but, as they say, time takes time.”
Paul
Rabbitt, President,
RabbittAnalytics.com: “The sharp 7% decline in the stock markets last week
assures us the Fed will cut rates at least 50 basis points, and perhaps 75 basis
points, at Tuesday’s policy meeting. At
some period in the not-too-distant future, we will see a market bottom.
Sentiment is now the most pessimistic since October 1998 (a contrarian
plus). Three of four polls are bearish
and new issues are at an 18-month low. The economic releases last week did
nothing to deter the Fed from easing. The
Producer Price Index rose a mere .1% with the core rate declining -.3%, below
consensus estimates, and industrial production declined for a fifth month.
Technically,
momentum is building to the downside. However,
our experience has been that momentum can rapidly reverse itself at market
extremes and the declines of the past month are certainly that.Â
Stocks are severely oversold. Our
estimated 90-day trading ranges are: DJII
(11000/9600), S&P 500 (1400/1080), Russell 2000 (510/440) and NASDAQ
(3000/1750).”
John
Roque, Vice
President, Arnhold and S. Bleichroeder: “There are some things that have
not yet happened which would make the likelihood of a low/turn better. Like
capitulative-type volume, (the Nasdaq peak in volume was 3.1 billion on 1/3/01
and the average since has been 2.1 billion), a major sell-side analyst throwing
in the towel and switching from bullish to bearish, a daily reading of 400 or
more new lows on Nasdaq, and most importantly, stocks and indexes to stop going
declining. A bounce can occur at any time, but every syllable uttered about a
bottom or a low is superfluous until stocks and indexes stop falling.”