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To: Boplicity who wrote (65232)	9/12/1998 11:01:00 AM
From: Mohan Marette	Read Replies (2) \| Respond to of 176387

Pervasive market gloom may be a buy signal. Well here is a thought for the day. ===================================================== Friday September 11, 8:41 pm Eastern Time By Pierre Belec NEW YORK (Reuters) - Wall Street has gone through some tough times but some experts say the best time to buy stocks is when things seem to be as bad as they can get. Sure, the global economic malaise that ravaged the market over the last seven weeks is ongoing. But what's encouraging is that the contagion may not get worse and spread to other countries. Some investors, who use early warning signals or contrarian indications, are getting ready for the next big move up. They see a break in the clouds, expecting a recovery next year in the battered Asian countries, which might fuel the next great bull market. In the United States, the economy is still in great shape with inflation practically nonexistent. The prospect of a drop in interest rates before the end of the year makes stocks more appealing, the experts say. ''The news needs to stay bad to set the stage for what we expect to drive the next super-cycle bull market,'' said Don Hays, chief investment strategist strategist for Wheat First Union. He said, for instance, one of the most reliable bull market signals occurs when all the economic numbers show a recession has started, not when the data show the recession is over. Right now, most investors are singing the Dow Jones blues, and bullishness is not rampant on Wall Street. Investors are worried about lagging corporate earnings and the possibility that President Bill Clinton may face impeachment proceedings over the White House sex scandal. Analysts said investors should look for clues that suggest the market might be set for a rebound. Another reliable bull market alert is the stock trading activity of corporate insiders. They are the people that have access to inside information -- senior officials such as directors and chief executive officers -- who draw much of their compensations from stock options. The officials tend to have a good idea about their companies' future earnings prospects and professional traders shadow the corporate leaders on the belief that where there's smoke, there's fire. Frank Ponticello, senior analyst for Prudential Securities, said there has been a jump in insider's buying of stocks recently. The insider buying over the past month soared to an unusually high 61 percent. Normally, the consensus insider buying ranges between 30 percent and 45 percent. The insiders have been known to scoop up stocks at the right time, having bought at a feverish pace after the 1987 market crash, the 1990 panic sell-off and in late 1994 and early 1995 when the market embarked on its strongest bull run ever. ''The current buying shows bullish confidence by the insiders,'' said Ponticello. ''The buying has mostly been in secondary stocks, which are in a bear market, and it would appear to be bottom fishing.'' Ponticello said that while the insiders' buying may be a signal that the market may have bottomed out, he cautioned that some insiders have been wrong in the past. ''It may not necessarily mean that they are right in the timing or their pricing point,'' he said. ''We've seen insiders buy natural gas and oil drillers six or seven months ago, and the stocks are still down 30 percent.'' Another contrarian indication says articles in major national publications may signal the time of a market turnaround. According to the theory, when non-financial publications issue bearish articles it may be time to buy stocks, while bullish coverage could be a bearish signal. The reason is that the publications tend to pick up on Wall Street situations only after they have been around. Often, by the time the editors catch on to a market event, Wall Streeters tend to view it as confirming the maturity of the extreme market move rather than announcing that it is ongoing or beginning. Coincidentally, the Sept. 14 issue of Time magazine has a cover story, entitled ''The Bears of Summer.'' It asks the question: ''Is the boom over?'' For the week, the Dow Jones industrial average rose 155.25. The Nasdaq composite index gained 75.12 to 1,641.64 and the Standard & Poor's 500 index rose 35.17 to 1,009.06. (Questions or comments can be addressed to Pierre.Belec (at)Reuters.com)