Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Tech Stock Options -- Ignore unavailable to you. Want to Upgrade?

To: ViperChick Secret Agent 006.9 who wrote (43139)	5/13/1998 3:05:00 PM
From: Dwight E. Karlsen	Respond to of 58727

INSIGHT - Dow seen heading for turbulent summer biz.yahoo.com By Huw Jones NEW YORK, May 13 (Reuters) - Despite the Dow's return to record terrain this week, stocks are headed for several months of turbulent, sideways trading with little relief in sight until late summer at the earliest, analysts said. Hitting the next magic milestone of 10,000 points in the Dow may become harder, with rapid rotation between groups of stocks becoming even more of a feature, the analysts added. Wednesday afternoon, the Dow was up 49 points at 9211, above its record close of 9192.66 of May 4. ''We are going back to very wide swings in the Dow. It's a different environment that will make it very difficult to trade,'' said John Mendelson, head of market analysis for Charles Schwab Capital Markets. ''This volatility is neither bullish nor bearish. It's just different,'' Mendelson said. The market could easily gyrate in a range as wide as 10-15 percent for the rest of the year, he added. The Dow industrials leaped 11 percent in the first quarter. The blue-chip index is up 4.0 percent so far in the second quarter. ''We have entered the early phase of the trading range for the next couple of months,'' said Joseph Barthel, chief investment strategist at Fahnestock & Co. ''My sense is that the range is 9,275 to 8,850 points in the Dow, and that will be the case right through June; and then possibly we will begin to stretch that horizon out a bit into July and August,'' Barthel said. [edit: well, the secret trading range is out :-)] Even merger mania on Wall Street is starting to have less of an impact on the broader market, where breadth has turned more negative in recent sessions, analysts said. ''I would think over the next month or two we are going to have a reasonably soft market,'' said Ed Nicoski, technical analyst at Piper Jaffray. ''I would be taking some chips off the table here. Most people are trying to find places to hide right now, but there is no consensus as to where that may be,'' Nicoski said. ''The market needs to settle down; it has lost its leadership.'' The stock market will mark time, but with an upward bias, until Wall Street reaches a consensus over whether the Federal Reserve will raise interest rates, and what shape corporate earnings will take in the second half of the year, said Ben Hock, director of equity research at John Hancock Funds. The Federal Open Market Committee meets on May 19. ''I don't think we are going to stay in this trading range indefinitely, and by July people will get more confident,'' Hock said. Hock said media companies, computer service companies, and healthcare sectors were attractive. ''There will be a little bit of rotation and more emphasis on stock picking,'' he said. Charles Schwab's Mendelson said volatility will be due to factors such as a fall in the flow of cash into stocks, high valuations, and jousting between institutional investors and Wall Street trading blocs. The government's more aggressive stance on antitrust issues is a rising concern for investors too. ''This is something new, with several coming up, such as SBC Communications,'' Mendelson said. ''This is a change in the environment that will add to volatility. There will be rapid rotation.'' Microsoft Corp. (MSFT - news) is already facing an antitrust battle with the government. Legislators also want a thorough review of SBC Communications Inc.'s (SBC - news) $61 billion deal to buy Ameritech Corp. (AIT - news), announced on Monday.