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Technology Stocks : COMS & the Ghost of USRX w/ other STUFF -- Ignore unavailable to you. Want to Upgrade?

To: DMaA who wrote (11374)	1/7/1998 2:26:00 PM
From: Scrapps	Respond to of 22053

Old Wall St. Rule of Thumb Backs the Bears By Huw Jones NEW YORK (Reuters) - An old Wall Street rule of thumb -- that the first five trading days of January determine the Dow's fate for the rest of the year -- may well back the bears this time around. Seasoned Streeters, however, say the rule has about as much credibility as that other forecaster favorite, the Super Bowl theory. That one says that if one of the original National Football League teams wins the final later this month, a bull market is in store for stocks. So far, the bulls are on tenterhooks. Thursday will be the fifth trading day of the year, and dealers are looking to see if the Dow Jones industrial average ends above or below its close at 7,908.25 on Dec. 31, 1997. Richard Cripps, chief market strategist at Legg Mason Wood Walker, said the rule of thumb has been 89 percent accurate since 1950. "Is it taken seriously? I would say technicians take it more seriously than the fundamentalists think they should," he said. "Short-term, the very trading-oriented might react to it to some extent." Technicians watch price movements and other market numbers, while fundamentalists base investments on company earnings. At the close of trade Tuesday, the Dow was up just two points from the end-of-year close. The index was down 100 points shortly after noon Wednesday. "It's very important that the market starts to dig in," said Joseph Barthel, chief investment strategist at Fahnestock & Co. "Today and tomorrow will answer the question as to whether or not we will have a good 1998 using that indicator. Wall Street will make hay of this," Barthel said. Traditionally, fresh, start-of-year cash flows boost stocks in January. "The rule does not always work, but it does give us a clue to what the month of January might do, and so far we are not doing too well," said Harry Laubscher, market analyst at Tucker Anthony. "If we are down for the first five days, it would suggest to me that we might be in for a troublesome month," he added. "Most people don't trade off it, but some people do, though most people do pay attention to it. It's probably more valid than that silly Super Bowl theory."