Oh yea... I read it when it came out. I saved it for posterity.
I'd say we're definitely in for some trouble next week... note the quote about "the next two weeks look like "nothing" weeks" as well as the mocking of anyone stupid enough to be bearish:
Gasping Market Set to Adjust to the Altitude Next Week
By Justin Lahart
Senior Writer, Street.crap
3/19/99 8:28 PM ET
Look, we're almost to Dow 10,000. Pretty high up now, aren't we? Can damn near see your house from here.
See that down there? Dow 6381.94. That's where it settled the day in December 1996 after Alan Greenspan gave his first "irrational exuberance" speech. Even farther down is November '95, where the Dow crossed 5000. If you look carefully, you can even read a Barron's column from that month:
Much as we hate to admit it, we missed the parade. Since we're in a confessional mood, we might as well own up to the fact that it wasn't the first time, either. But this was the one we wanted to see most of all!
The parade, of course, was the famed Macy's Thanksgiving Day Parade. And we missed it because we just couldn't disentangle ourselves from the arms of Morpheus (a dreamy old Greek god who invented decaffeinated coffee).
The reason we're so bitterly disappointed and utterly vexed with ourselves is that we were keen as all get-out on eyeballing the parade's star attraction. No, not Dudley the Dragon or Sky Dancer or Barney but a 5,000-foot wonder making its first appearance ever in the incomparable extravaganza -- the Dow Jones Balloon.
Wonder what became of the fellow who wrote that? Sure hope he's had someone else minding his money.
Down farther, you can see 1987. There's a little dip thereabouts in October, but I can't readily recall what it was about. Hey, where are you going? The way up is this way!
For a market that has been trading with a four-digit handle since late 1982, the air gets pretty thin pretty quickly when the altimeter reaches 10,000. Three attempts, and still no dice. Apparently, the decamillennial mark is going to take some getting used to. That will be the major theme of the coming week, just as it was the theme of the past one.
"It's very important," said Byron Wien, chief U.S. investment strategist at Morgan Stanley Dean Witter, of how levels on the Dow can affect the market's psyche. "I spent 17 years waiting for the market to go to 1000. It can be a big barrier." The Dow first crossed 1000, intraday, in 1966. It was not until 1972 that it closed above the level, and not until late 1982 that it finally cleared it for good.
As for 10,000, even Japan in the 1980s -- that symbol of stock market excess -- had trouble breaking free of that mark after first reaching it in early 1984. A half-year later, and it was still struggling with it, and no wonder. Admittedly, 10,000 has a higher psychological potency in Japanese -- it's commonly used to refer to vast plenitude, sort of like we would use the word zillion. Once you reach a zillion, what's left?
Though the U.S. market is not at a zillion just yet, it is, for Wien, looking dangerously high. Wien is one among a camp of strategists who pay close attention to the relationship between interest rates and stocks -- J.P. Morgan's Doug Cliggott is another -- who think stocks have gotten too rich relative to the interest rate outlook. The stock market is still trading as if interest rates were down in the 5% range, viewing the recent back-up in the long-bond yield as aberrant. That is a mistake, thinks Wien.
Wien sees other disheartening signs as well -- high levels of bullishness, weak breadth, poor sector participation. "Every technical indicator is pretty bearish here," he said, quipping that if the market keeps on advancing the way it has, it "may be the end of technical analysis."
None of this is to say that Wien thinks it's time to cash out entirely and put your money in gold and hard tack. He does not think that the market is about to blow off. But he would not view a push past 10,000 kindly. "My feeling is, the fact that it's struggling is rational. If it breaks through, I'm suspicious of it."
While it looks like there will be plenty of excitement in the stock market, what with fresh assaults on 10K and all that, there isn't much going on in the Treasury market. A good time, said Suzanne Rizzo, U.S. economist at MFR, to take a vacation.
"The week looks totally dead and the FOMC meeting the next week looks dead, too," she said.
Rizzo has little doubt that the Fed is concerned about the pace of economics growth. It is, she said, unsustainable. "The Fed is getting worried about real economic conditions," she said. "There is a very high risk that the economy isn't going to slow down in the next two quarters."
But still, she thinks the Fed will hang back for a while here, allowing global conditions to continue to recover from the shocks of last fall.
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