West:
Technical guru Bob Farrell seems to agree with you. Sees a big bounce soon then a resumption of the bear. From BARRON'S today.
Where do we go from here? Somehow, we had a hunch you might ask that question. And we can
answer definitively -- we don't know. We're still of a mind that we're on the verge of a big bounce,
but what's new?
Actually, our conviction on that score was reinforced after chatting with Bob Farrell last Friday.
With summer virtually history, Bob, sensible fellow that he is, has just about given up on a summer
rally. But he does spot some signs of a pending rally.
Among them: rising volume, greater volatility, a shift in speculative temperament as evidenced by a
preference for puts over calls, and various and sundry other things that smack of an oversold
market. But he cautions that any bottom will be temporary -- an interruption, not an end, to the bear
market.
He now dates the bear market as starting in '98, when at least half the stocks in the S&P 500 began
extended declines. And he espies a secular change in the investment calculus, calling for much
reduced rates of return.
The trading rally could go on for some weeks, but any final bottom, he feels, is at least months
away. And even then, Bob warns, we're in for a long enervating, frustrating stretch. |
