Recent Market Upheavals Produce Odd Couples - TheStreet

Recent Market Upheavals Produce Odd Couples

Predictions on where we go here from here are all over the board.
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Market Mavens & Odd Couples


With apologies to Oscar and Felix... .


Sept. 16, Scott Bleier, chief investment strategist at

Prime Charter

, asked investors to remove themselves from their place of residence (in stocks).

That request had nothing to do with his wife (a lovely woman, BTW) but everything to do with a "sell" signal from his proprietary timing model. Deep down you knew he was right, but you also knew that someday I'd return to follow up.

Since then many investors have found themselves with nowhere else to go but down (since then, the


is down 8.3% while the

S&P 500

is off 7.2%), and arrived at the home of their childhood friend -- the bond market. Several years earlier, investors had thrown bonds out, requesting they never return (to favor).

The question now isn't whether two divorced men can share an apartment without driving each other crazy, but what Bleier's indicators are saying today. (Cue

theme music...)

"All my short-term indicators have turned positive," Bleier said

Monday, even as major averages slumped to their session lows. However, the strategist noted that's a near-term


call vs. a long-term


recommendation. (And, no, he doesn't speak in italics.)

"We maintain the need to protect your portfolio now even as we get this near-term trading bounce," he said.


Sept. 23, Bleier suggested the Dow would need to spend "a little time bottoming" below 10,000 before it could make a sustainable rebound. Apparently, dipping below the much-ballyhooed round number intraday Monday and on

Friday isn't sufficient. The strategist expects 9600 will prove to be "a nice level" for the bottom.

It's possible "if you buy on this dip you'll be amply rewarded as the market goes up hand over fist after third-quarter earnings and the


are out of the way," Bleier said. "More likely, it's time to pay the piper. I don't mean we'll crash but I'm talking about a drying up of this market. Making it so boring, ringing out so much volatility that daytrader, momentum types have nothing to do. Whatever direction they go, nothing happens."

Asked about reports that daytraders and others of their ilk are already suffering, the strategist replied with a lecture about what it means to assume.

Then he said "there's still a tremendous amount of complacency in this market" and "expectations for big profits," noting the stellar performance of IPOs Friday, such as


(QUIK) - Get Report


This evening, underwriters for

Martha Stewart Living

(MSO:NYSE), the

World Wresting Federation

(WWFE:Nasdaq) and

Crossroads Systems

(CRDS:Nasdaq) priced IPOs for each above expectations.

And you can't fake that.

Rest of the Best


reported earlier,

Goldman Sachs

strategist Abby Joseph Cohen had some constructive things to say about stocks Monday morning, calling concerns about economic deterioration "unwarranted."

Cohen also said the S&P 500 is "modestly undervalued," even with the recent rise in bond yields.

It's unclear how much (if any) impact Cohen's comments had on trading Monday. What is clear is that she was not alone in making a call after last week's rough action. Here, then, is a rundown of what some other top strategists were telling clients (and sales staffs) over the weekend.

The decline is not a factor of an "October curse," inflation, or

Federal Reserve


Alan Greenspan's

loquacity, according to Edward Kerschner, investment strategist at


. "What continues to weigh on the stock market is decelerating

earnings per share growth, high interest rates and full valuation."

Until major averages decline another 5% to 10%, "this market would still not begin to be truly cheap," he continued. "Should the momentum of the current correction push the market much below that, it would be as good a re-entry opportunity as the August highs were an exit opportunity."

Thomas Galvin, the bullish chief investment officer at

Donaldson Lufkin & Jenrette

, foresees "downside vulnerability of about 5% between now and year-end due to high anxieties." But the bullish forecaster forecasts a "20% upside opportunity by the end of March 2000. Trying to accurately time a re-entry is often tricky and rarely successful, but we believe post the Nov. 16


meeting and before Christmas should be ripe for investors."

Bill Meehan, chief market analyst

Cantor Fitzgerald

stands (and sits, I gather) in stark contrast Cohen's and Galvin's seemingly unbridled optimism.

Meehan, who turned bearish last November, wrote "sellers don't appear to be crowding the exits at any price yet." However, if Tuesday's

Consumer Price Index

report is "unkind, or worse," the Dow could quickly revisit 9700 and the S&P could decline to 1225.

"Conversely, knowing that October tends to be a good month for reversals and the confirmation of market bottoms," he added, "we envision a seasonal bounce evincing itself within the next four weeks that will benefit beleaguered 'average' names at least as much as it does index captions."

Finally, at the extreme end of the spectrum is Don Hays, who will step down as director of investment strategy at

Wheat First Union

come Oct. 31.

"Please don't ask me if this bull market is over: To me, it is an indisputable fact," Hays wrote in an email this morning. "Unless the Federal Reserve does something totally stupid,

which certainly is in the realm of possibilities even those who refuse to see will be dragged into the bearish camp in the next 10 to 12 weeks. But first, yes, probably a little more camouflage will be thrown up to see how blind they really are." (Translation: Stock proxies may enjoy a short-term bounce.)

Noting $1.1 billion came out of equity funds last week while $8.5 billion went into money market funds, according to

AMG Data Services

, Hays wrote the action "answered the question that some have continued to pin their perpetual bullish hopes on, that there is nowhere else for the 401(k) flood of money to go except stocks. Does that show you where else money can go?"

Sarcasm aside, "the most bullish thing that could happen for the world in my opinion would be a season of fear that will only come from an extended period of weak stock market action," the veteran market watcher said.

In case you weren't paying close attention, he doesn't think last week's selloff counts as "extended."

Aaron L. Task writes daily for In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in He also doesn't invest in hedge funds or other private investment partnerships. He welcomes your feedback at