The last leg of a bear market is often crushing - a swift plunge in stock prices on heavy volume that pounds small investors and institutions alike, leaving them with big losses and shattered emotions. The effect can be cathartic. But in the vacuum that remains, investors can begin rebuilding their confidence.
That last leg is exactly where the stock market now seems to be heading. Indeed, it is hard to find anyone on Wall Street these days who does not believe, or at least suspect, that the bear market is moving into some sort of climactic phase that will purge the investment community of its pent-up fears of economic collapse.
In the past two weeks, all the market averages have plunged to new lows as Wall Street, beset by cruel economic news from all sides, has time after time been unable to mount a sustained rally. That is a discouraging omen, an indication that the bottom has not been reached, many securities analysts say, and a sign that even the most steel-willed optimists may be about to throw in their towels.
''The market's going to take the ultimate dive to culmination in the next few weeks,'' said James L. Freeman, director of research at the First Boston Corporation, echoing the comments of many other market strategists. ''Batten down the hatches.'...
The Dark Days of Wall Street
August 15,1982
nytimes.com |
