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The stock market's heady performance has failed to convert the skeptics. In fact, many bears believe higher prices merely mean higher risks, not that their bleak views might be wrong or poorly timed.

Recent setbacks aside, the stock market's performance has been pretty stellar lately, going back to last October for many names and since March for major averages.

But while most sentiment polls show a predominance of optimism, there's little evidence that bears are capitulating. Fred Hickey of

The High Tech Strategist

offered some bullish comments on

Advanced Micro Devices

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in midsummer, but that was an exception to his still-largely bearish rule.

Elsewhere, Dan Benton, manager of the $9 billion Andor Capital Management, is rumored to have rescinded a bearish stance on tech stocks. That would be a notable turnabout, but remains unconfirmed; the hedge fund manager declined to comment, via a spokesman.

Meanwhile, a greater number of recent bulls are sounding bearish. They include Robert Marcin, Doug Kass and Tom Kurlak, all contributors to's

sister sites, as well as Greg Weldon, editor and publisher of

Weldon's Money Monitor


Some bulls will take solace in the fact that few skeptics' towels have been tossed in, and from a contrarian standpoint, they have reason to do so. However, more investors are starting to dismiss the bears as being out of touch, stubbornly wrong or worse -- an attitude similar to the one that prevailed in late 1999 and early 2000.

I'm not defending those who've missed out on the rally, just reminding the increasingly haughty bulls that it's foolhardy to blindly ignore the risks, and those who focus upon them.

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Big Grizzlies Still Growl

Of the so-called major Wall Street strategists, Richard Bernstein, chief U.S. strategist at Merrill Lynch, has long been the most bearish, and has maintained a 45% recommended equity allocation throughout the summer. Furthermore, he has consistently recommended investors avoid high-beta stocks, including techs, which have been by far the best performers in the past 11 months.

Bernstein was unavailable for comment, but his recent writings indicate no wavering from the bearish stance.

Another bear market "hero," Doug Cliggott, formerly of J.P. Morgan and currently with hedge fund Brummer & Partners, remains highly skeptical of equities and of the economy's apparent recovery. In a recent interview on


, the strategist expressed doubt about the sustainability of economic recovery and, by extension, the outlook for corporate profits in 2004 and 2005. While acknowledging the

S&P 500

might reach 1050 in its current advance, he also said the ultimate lows for the cycle haven't been reached. Cliggott did not return calls seeking additional comment.

Skepticism about the sustainability of the economic recovery is fundamental to the views of Stephen Roach, chief economist and director of global economic analysis at Morgan Stanley. Although his

double-dip recession call in early 2002 didn't materialize, Roach has remained an ardent skeptic.

"As long as the jobless bias persists, the macro multipliers that normally convert policy stimulus into sustainable recoveries could prove surprisingly impotent," the economist wrote Monday, prior to the latest rise in weekly jobless claims. "For that reason, I continue to believe that there is good reason to question the staying power of the policy-induced cyclical resurgence currently under way."

Finally, any list of notable bears wouldn't be complete without Bill Gross, managing director at Pimco and manager of the $72 billion

(PTTAX) - Get PIMCO Total Return A Report

Pimco Total Return fund. Gross'

Dow 5000 call in September 2002 helped solidify his self-generated transformation from "master of the bond universe" to "guru for all occasions."

In recent public comments, Gross has said the


is "fairly valued" in the 5000 to 6500 range. But that's about as far as he's gone in admitting to being off base with that forecast.

In his September

market outlook piece, the bond maven described America as being "in the beginning stages of what can be aptly described as hegemonic decay."

The piece is largely about our growing reliance on the kindness of foreigners, especially China, to fund our yawning deficits; on Thursday, the government said the trade deficit widened to $40.3 billion in July. Gross expressed concern that "our Asian creditors will wake up and smell the coffee," and sell their dollar-denominated assets (notably Treasuries) and/or revalue the yuan and yen. The results won't be pretty, he concluded: "U.S. interest rates will rise, our goods in the malls and the showrooms will be less affordable, and the process of national belt tightening and increased savings will have begun."

Hardly the stuff of newfound bullishness, in other words.

Litany of Doomsayers

Turning to sources featured in past columns, Steve Hochberg, editor of

The Elliott Wave Financial Forecast

in Atlanta, believes major averages are perilously close to a major reversal. Notably, he felt similarly back on

May 30, the last time we did a "bear roundup" story. (Then, as now, few bears were changing their views.)

Nothing that's transpired since May 30, including the recent technical breakout by the S&P 500 and 52-week highs for all major averages -- caused Hochberg to rescind his bearishness.

"All of our indicators were flashing clear sell signals

and we didn't want to go against it," Hochberg said Thursday.

"We fought the market," he recalled, until the S&P 500 surged past its Dec. 2 intraday high of 954. At that time, Hochberg realized the "wave count" he was using was wrong and "stepped aside to let the pattern play itself out."

Currently, he sees a "pretty clear" Elliott Wave pattern suggesting the S&P 100 has "completed its rally from the March lows," forecasting similar conclusions for major averages as well.

In addition to the "persistence of bullish sentiment," Hochberg expressed

concern about the financials, noting the Philadelphia Stock Exchange/KBW Bank Index failed to confirm the S&P 500's recent high and faces critical technical support at 850. (On Thursday, the BKX rose 0.5% to 864.74.)

Dave Hunter, chief market strategist at Kelley & Christensen, expressed similar concerns in explaining why he's sticking by a very draconian forecast of Dow 4000.

"My views are little changed," Hunter declared this week. "I see the rally since March as another countertrend rally and I believe we may have seen the highs

last week. I continue to look for another steep leg down to

Dow 4000, perhaps by year end."

About the only catalysts for such a devastating swoon, he admitted, would be another major domestic terrorist attack and/or "something quite financially devastating," most likely spurred by a derivatives blowup. "This economy is as leveraged as it has ever been and there is little room for error at this point," Hunter concluded. "Given the risks, yes, I remain a bear."

Similarly, longtime skeptics such as Alan Newman, editor of

Cross Currents

, and

contributor Bill Fleckenstein remained so inclined throughout the recent advance. Yes, Fleckenstein did correctly forecast a sizable rally would ensue near the March lows. But he's mainly been a disbeliever in its sustainability and incorrectly bearish on


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, most notably.

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 invites you to send your feedback to

Aaron L. Task.