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Strategies & Market Trends : Stock Attack -- A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Robert Graham who wrote (4228)	12/18/1997 2:09:00 PM
From: Chris	Read Replies (1) \| Respond to of 42787

thing safety.. Subject: LU - Lucent Technologies \| Previous \| Next \| Respond \| Earnings \| To: Ted Downs (1169 ) From: Gregory Mullineaux Wednesday, Dec 17 1997 4:46PM EST Reply # of 1171 NEW YORK -(Dow Jones)- The chief market analyst at Merrill Lynch & Co. says investors should brace for a possible severe correction in the U.S. stock market next year. Merrill Lynch analyst Richard McCabe said the market could be vulnerable to a cyclical decline in 1998, which could bring the major averages down as much as 25%. A correction of that magnitude would pull the Dow Jones Industrial Average, now around 8,000, down to around 6,000. The correction, however, will lay the groundwork for the next cyclical bull market, which should start in late 1998 or early 1999. McCabe spoke at a press conference at which Merrill Lynch analysts provided their 1998 economic and investment forecasts. McCabe said that before the onset of the correction, U.S. equity markets will likely reach new highs either in the final weeks of this year or early next year, as stocks near the end of a four-year cyclical bull run. McCabe referred to the turbulence in Asian markets and the October sell-off in domestic markets as a "warning crack" that the current bull market is nearing its end. "It's a wakeup call," he said. "Markets are like trees. They don't grow to the sky." In its published forecast for next year, Merrill said the global investment scene next year will be dominated by low inflation, declining interest rates and slower growth. "Asian growth is about to slow sharply and the Asian crises will ultimately slow the entire world economy," Merrill said. "For investors, the key will be to find sources of growth in a slowing economy." The brokerage firm said restructurings and consolidations will prove to be major sources of earnings growth for most companies. Industries in the throes of consolidation include: airlines, financials, selected energy, capital goods and CATV companies,it said. In the U.S., GDP growth is expected to slow to about 2.5% during 1998 after jumping nearly 4% during 1997, Merrill predicted. "The Asian crises should reduce U.S. growth by about half a percentage point next year, or more," it said. "The transmission mechanism is the U.S. trade balance, which will deteriorate sharply as exports slow." Asia accounts for nearly 30% of U.S. exports. Merrill said it is recommending higher quality stocks and bonds for investors around the world and believes that the two areas in the world that can accept foreign investment and grow are Eastern Europe and Latin America. In the U.S., financials and other bond substitutes like real estate investment trusts are favored, as well, it said. Merrill's chief economist, Bruce Steinberg, said the U.S. economy was beginning to moderate even before the Asian crises could affect growth. "In particular, consumer spending appears much softer in the fourth quarter than earlier this year," he said. Steinberg expects the slowdown in spending next year will be concentrated in consumer durables, particularly vehicle buying, where pricing is likely to weaken. Steinberg believes the U.S. inflation rate will continue to ease next year, with the Consumer Price Index rising less than 2% and prices for consumer goods declining. Steinberg's inflation view is predicated on economic growth moderating, capacity expansion accelerating, and import prices declining. He believes that the Fed will probably ease next year and bond yields could fall as low as 5.5%, from their current level just under 6%.

To: Robert Graham who wrote (4228)	12/18/1997 2:14:00 PM
From: Chris	Read Replies (1) \| Respond to of 42787

looking foward to your study bob. <I want to note here that Richard and I are having a disagreement on TA not applying well to low priced stocks. I am going to do a little directed study on this myself soon.> and your lengthy conclusions <ggggg> i do love 'em..

To: Robert Graham who wrote (4228)	12/18/1997 4:49:00 PM
From: Chris	Respond to of 42787

BOOKMARK THIS THREAD * exchange2000.com a lot of good discussion there... follow the picks talked about.. open the chart yourself and see what day you would have sold out.. etc..etc.. this lull in the mkt is time for you to catch up on your Studies.. read and learn and how to make youself improve... study how stocks react in a bull mkt.. in a choppy mkt?? profits right now in a choppy mkt are VERY hard to come by.. trades have to be shortened. long-term investors will get no where right now in this choppy action.. who knows how long this choppy action will last?? be flexible is key..