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Strategies & Market Trends : MARKET INDEX TECHNICAL ANALYSIS - MITA -- Ignore unavailable to you. Want to Upgrade?

To: J.T. who wrote (1993)	12/14/1999 4:01:00 PM
From: Matthew L. Jones	Read Replies (3) \| Respond to of 19219

JT, Heinz or anyone, I have noticed lately that there seems to be a correlation between the final hour (equities) and the long bond action for the day. What is your feeling. I know nothing about bonds, but have wathced the long bond futures intraday. Is there any correlation or am I imagining this? Matt

To: J.T. who wrote (1993)	12/14/1999 9:57:00 PM
From: LBstocks	Read Replies (2) \| Respond to of 19219

Merrill's McCabe sees market retrenchment in 2000 NEW YORK, Dec 14 (Reuters) - Merrill Lynch and Co.'s chief market strategist on Tuesday said he expected a retrenchment in the U.S. stock market in the early months of next year, a move that could set the stage for future gains. The strategist, Richard McCabe, said he was troubled by negative breadth, meaning most U.S. stocks have been dropping despite phenomenal performances from main indexes such as the Dow Jones industrial average and the Nasdaq Composite. ``The bulk of stocks are really oversold. We've been in a stealth bear market for a year, a year and a half,' McCabe said at an annual luncheon at the firm's Manhattan headquarters. McCabe ticked off a number of bearish technical factors. The daily number of advancing stocks compared with declining stocks on the New York Stock Exchange is at its lowest level in almost four years, he pointed out. Sentiment has become too optimistic about 2000, and speculative trading has soared to heights unseen since May 1996, which was followed by sharp declines. As of Monday's close, he said, only 39 percent of all NYSE-traded stocks were showing gains for the year to date and only 61 percent of Nasdaq stocks were higher. ``Usually, to correct these kind of excesses, the overdone stocks have to correct and join the majority of the weaker ones,' he said. McCabe said a pullback would likely hit technology and the major stock averages hardest. ``It may cause (the indexes) to overstate the market's weakness as they have overstated the market's strength,' he said. The trouble could also lead to declines in world markets in late winter or spring of 2000, he said, with Japan pulling back in what ``may be a long-term base'. McCabe for some time has been troubled by the divergence between the headline-grabbing records reached by the averages and the dismal performance of the majority of U.S. stocks. At last year's conference, he said stocks appeared to be at the tail-end of a bull market and would likely see a retrenchment, setting the stage for a bull market in the year 2000. Merrill's chief quantitative strategist, Richard Bernstein, said small-capitalization stocks and non-U.S. issues were his picks for the year ahead -- his preferred areas for investing since April and May. ``Technically, we're in a bull market, the averages did quite well, but the performance of the average stock, to be quite frank, stunk,' Bernstein said at the conference, which was broadcast live by satellite. As with McCabe, Bernstein expects the averages to reverse this year and sees single-digit returns after the past five straight years of the market rising more than 20 percent. Bernstein, who has ranked as the top quantitative strategist for five years by in an influential Institutional Investor survey, said he expected small gains in the U.S. market and a rebound in global markets. He zeroed in on the real estate investment trusts and capital spending sectors as good investing possibilities but did not name specific stocks.