When I think of September and October, I think,

trouble

.

Having been a financial journalist since 1985, I remember the stomach-churning 1987 slide starting in August and climaxing in the panic of October. I recall the minicrash of October 1989 when the

United Airlines

deal fell apart. Then there was the 1990 slide from July to October that took a bunch of great tech companies like

Microsoft

and

Oracle

down 40% to 75%. And let's not forget the one-day plunge of October 1997 triggered by the Asian financial crisis. Or the October 1998 swoon precipitated by the Russian crisis and the blow-up of

Long Term Capital Management

.

I know, I know, that was then and this is now. The bull case is true as far as it goes. Yes, interest rates are capped for the moment. The economy is making a soft landing. Technology companies are reinventing the economy and boosting productivity across the board.

But -- you knew that was coming -- unless you think the past has absolutely no application to the present, September is a month to watch out for, according to two bearish analysts who rely a whole lot less on anecdotal information than I just have. Today, after the second straight day of weakness, I thought it might be worthwhile to hear their views.

"Beware of September seasonality," says Tim Hayes, the global stock strategist at

Ned Davis Research

, which sells market analyses to professional investors. "The market has churned higher with better breadth, but not the kind of breadth

i.e., participation by many stocks that would enable the market to withstand the negative seasonal pressures now taking hold."

Historically, trading volume rises from August to September for the obvious reason: They're back from the beach. So does volatility, which ended August at its lowest level of the year as measured by intraday moves in the

Dow Jones Industrial Average

.

When volatility has picked up in September, the market has tended to go down. Since 1900, the Dow has gained in September only 42% of the time, and in the past 20 years, September has been the worst-performing month, according to Hayes. (It has done a bit better in election years -- with the Dow down only 13 of the past 24 election-year Septembers.)

And last but not least, IPOs and secondary offerings tend to proliferate in September, which isn't generally good news. "The market tends to perform poorly when it has to muster the demand to meet a flood of new supply," says Hayes.

And flood there may be. Close to 300 IPOs are expected to raise about $36 billion after the Labor Day lull. To put that into perspective, it's about the same amount raised by IPOs in all of 1998. In addition, lockups will expire on 40 to 50 companies, which could send another 1 billion to 2 billion shares into the market.

"Bottom line, our highest probability is a correction in September," he says. He recommends in the meantime that you stay in defensive stocks -- health care and utilities, for example.

Hayes has not thrown in the towel, but he is watching the Dow carefully for signs of a move up through 11,400, with a good number of stocks making news highs. (We got 161 today, which is good.) If the Dow sputters, he says, watch out to see if it falls below 10,300.

His firm's short-term trading model has been slipping lately. "It is right above a sell signal," says Hayes. He looks for a rally later in the year but only after a correction.

Hayes is positively bullish compared with Fred Hickey, editor of the

High-Tech Strategist

newsletter. Bulls will discount what Hickey has to say perhaps because he turned bearish in late 1998. But I like to hear what Fred has to say because it's never the usual stuff. It's good grist for the mill.

His take on the moment? "Everyone was very heavily exposed to semiconductors and technology going into September," he says. "They are now getting hit with analyst downgrades, a slowing in sales of computers, wireless phones and, as a result, semiconductors. The next step will be order cancellations."

Hickey sees the downgrade today of

Micron Technology

(MU) - Get Report

by

Donaldson Lufkin & Jenrette

analyst Boris Petersik as a signal event. "It's not an accident that Petersik is based in Hong Kong," says Hickey. "You could have seen the slowdown coming weeks ago if you looked at the Korean and Taiwanese chipmakers. Those stocks have already been slammed. Boris' call today means that the second half of the year pickup in DRAM that he had been looking for is not coming. The report today was his giving up the ghost on that thesis. In contrast, the analysts in the U.S. have been asleep."

So what does he look for ahead?

"This is not a two-day problem. I expect mainly bad news for the next six weeks -- preannouncements from semiconductors companies and in the end market for chips, whether they be PC makers or telephone handset companies. The downgrades we have seen so far have nothing to do with the negative earnings preannouncements I expect," says Hickey.

"My goal is to keep readers from getting destroyed during the coming collapse, especially in the ever-more grossly overpriced large-cap tech stocks," he writes in the latest newsletter. "When the dust settles, we will have cash at the ready to buy great tech stocks dirt-cheap."

Hickey actually has good things to say about a few tech names such as

Network Associates

( NETA),

Adaptec

(ADPT) - Get Report

and

Novell

( NOVL). But mainly he is a gloom-and-doomster.

He has titled his latest newsletter

The Calm Before the Storm

. A bit melodramatic, but history shows that it has happened before around this time of year when valuation levels were far more reasonable than they are today.

Brett Fromson writes daily for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He invites you to send your feedback to

bfromson@thestreet.com.