Bulls Bid for Another Romp

With two-thirds of 2006 gone, investors are emerging from the summer doldrums and preparing for the final four months of what has been a volatile year for stocks.

The overarching question is whether the major indices will be able to repeat the generally solid performances of years past, or if uncertainty about the Federal Reserve, the November elections and energy prices will bring out the bears.

Barry Hyman, equity market strategist with EKN Financial, says he's expecting seasonal weakness in September and October. "This pattern shows up in the technical-overbought status of the market as we enter the post-Labor Day season, as well as the upcoming sets of economic data on inflation that we expect would bring the worry back to the market," he says.

Afterward, though, he's looking for strength into the end of the year. "The correction we see, which we now characterize as a potential retest of the bottoms in May and June rather than a bear market correction, is our objective before a rally to finish the year around 1280 on the S&P 500," he says. ...