SAN FRANCISCO -- When Richard Williams, market analyst at

Jefferies

, came out

bearish on the

Nasdaq Composite

July 19, the call proved to be a day early but not a dollar short. In fact,

being

short woulda' been the right move.

Thursday morning, Williams emailed with the observation that "the Nasdaq appears to be approaching a short-term bottom," in the 3820 to 3840 range. That call looked eerily spot-on as the day unfurled -- the index tumbled as low as 3841.62 before closing off 3.7% at 3842.25.

In the wake of the decline, the analyst forecast the index could begin a rebound as early as Friday, ultimately rising to as high as 4050 in the next few trading days. But he also believes traders would be best served to use that presumptive advance to "lighten up" or establish shorts. It will prove to be "a temporary respite before further downside," he said.

Williams reiterated his call for weakness over the next four to eight weeks, one that takes the Comp as low as 3335, or down another 13% from Thursday's close. He sees a similar, although less bearish, pattern for the

S&P 500

, suggesting the index will also rally from Thursday's close of 1449.62 but soon test support around 1400.

Looking out a bit further, the analyst forecast the market will enjoy a "

Fed

-induced" rally beginning in late August and continuing through the election in November, but will suffer another "big correction" shortly thereafter.

Elsewhere, Williams sees the

Philadelphia Oil Service Index

as having run into resistance at around 115 and recommends shorting the index with a 120 stop and 92 target.

As always, you're free to follow, ignore or bet against the sources mentioned in this column (at your own risk, of course). Just wanted to pass along the latest from a guy who seems to have the "hot hand" these days.

Catching Up With the Kingmans

Erik Gustafson of

Stein Roe & Farnham

(among others) saw his recent struggles compounded Thursday by

Nokia

(NOK) - Get Report

, which plummeted 25.6% after issuing a cautious outlook for the third quarter.

"It's been a crappy 10 days," Gustafson conceded.

We connected following a game of phone-tag earlier this week when I was attempting to update the

Report Card, in which the fund manager posted a decidedly mixed performance. Still, the $1.1 billion

(SRFSX)

Liberty/Stein Roe Growth fund rose 36.6% in 1999 vs. 19.5% for the S&P 500, and was up 10.6% in 2000 through June 30 vs. a decline of 1% for the index, according to

Morningstar.com

.

Regarding those

previous picks, Gustafson is still bullish all the names save

LSI Logic

(LSI) - Get Report

, which plummeted 14 1/2, or 31%, to 32 1/2 Wednesday, after the company posted earnings that met expectations but produced disappointing revenue growth. The stock recovered just a bit Thursday, rising 1 3/8, or 4.2%, to 34.

"LSI whiffed so badly -- it's unacceptable," Gustafson declared. "When you can't execute in the best of times it just shows lousy execution by management."

The fund manager was doubly steamed about the LSI shortfall because he claimed company officials had been "telling everyone things were fine," and because senior management had been selling stock in late May and early June.

I mentioned this in the Columnist Conversation yesterday, but here is a follow-up with more detail.

On May 16, LSI chairman and CEO Wilfred Corrigan sold 400,000 shares of the company's stock, which closed at 52 1/2 that day. Corrigan sold another 275,000 shares on May 31 and an additional 225,000 shares on June 2; the stock closed at 53 1/4 and 62 1/2, respectively, those days.

The obvious concern here is that Corrigan (and other officers) knew the second-quarter was going to be "light" and got out while the getting was good, even as LSI execs told the Street everything was hunky-dory.

Not surprisingly, Kevin Brett, director of corporate public relations at the firm, said nothing could be further from the truth.

First, company officials had a window to buy (ahem) or sell shares beginning April 28 and ending June 4, Brett noted. Second, roughly half of the $20 million revenue shortfall for the second quarter was due to a glitch in the firm's new supply-chain management system, which caused a delay in a product being shipped. Instead of going out on June 30 (the last day of the second quarter) it went on July 1, he explained.

The other portion of the shortfall stemmed from a shortage of components in LSI's storage-systems division, a problem the spokesman said didn't become evident until the "tail end" of the quarter. He declined to identify which suppliers failed to deliver.

The spokesman's point, of course, is that LSI execs could not have known about the pending shortfall when they sold in late May/early June. "Things were looking on track at that point," Brett said, adding the problems didn't materialize until well after the company's quiet period began on June 17.

Meanwhile, Brett noted LSI upped its revenue guidance for the third and fourth quarters to 10-12% sequential growth in each vs. 8-10% previously, suggesting it will recoup any revenue shortfall from the second quarter. Additionally, the company remains "on target" to meet full-year revenue estimates of $2.7 to $2.8 billion, he said.

LSI bulls such as Richard Whittington of

Bank of America Securities

, who maintained a strong buy recommendation and called LSI "a major investment opportunity at present prices" in a report published Wednesday, seemed to accept the company's explanation. Whittington was unavailable for additional comment. Bank of America has done no recent underwriting for LSI.

Gustafson, however, isn't buying it -- literally or figuratively.

"The point is these guys

screwed up," he said. "Time and time again, LSI fails to execute. It's frustrating."

If it's an issue of recidivism, why be in the stock at all, I asked?

"When the semi cycle works, companies like LSI have a lot of leverage," he explained, adding he sold some of his LSI stake when the stock was trading in the 70-80 range. Holding the rest was a mistake, he admitted. Still, with a cost basis of 29, the stock remains a (shake your) money maker for the fund manager and -- until recently -- a stellar performer.

Notwithstanding the ongoing "vicious correction" in the group, the fund manager remains bullish on the chip cycle but plans to "dump" LSI after the current firestorm subsides.

Should Whittington prove right, Gustafson will rue that decision, a feeling many investors are becoming familiar with.

Aaron L. Task 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 also doesn't invest in hedge funds or other private investment partnerships. He welcomes your feedback at

taskmaster@thestreet.com .