If its Saturday, then its time for the latest from Barron’s Alan Abelson. He references a stealthy market watcher who is none-too-sanguine about 2006:
"Where does that leave the market? Probably right where it was — namely, shaky. But since that has been our diagnosis for it seems like an eternity, we thought it might be worthwhile getting a second opinion. So we did, from an old pal who has been keeping tabs on the market ever since he was a pup (and that was quite a few years ago). Not the least of his virtues is that he shuns publicity, which means that only his clients (a select, savvy and rich bunch) and the occasional accidental kibitzer (like us) are privy to what he thinks.
OK, OK — we hear you — what does he think? We should note, incidentally, that he’s the last of the great contrarians (while just about everyone else was beating the drums for a burst upward, he cautioned that September would see a weak rally — and so it did). Our friend is one of those strange people with the capacity to read the entrails of the market — new highs, 200-day moving averages, that sort of arcana — and what he sees is a mean shakeout this month, followed by a rally that might carry into next year.
But that rally, he feels, will be just another of the bear-market rallies of various intensity and duration we’ve been witness to these past several years and, at some point in ’06, stocks will begin to go down again big time and the bear market resumes in earnest. Keep in mind, he urges, if and when you choose to play the rally, that big investors, a famously edgy crew, likely have taken a lot of short-term profits this year, which means that they could be eager for offsetting losses to shield those profits from the grasp of the tax collectors. Hence, any number of beaten-down stocks that seem like raging bargains may get even more beaten down as the pachyderms unload."
(OUR PROPHETIC OLD PAL, as intimated, likes to dabble in the black art of technical analysis.)
Sounds about right to me . . .
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Source:
Paging Jane Doe
ALAN ABELSON
Barron’s, MONDAY, OCTOBER 10, 2005
UP AND DOWN WALL STREET
http://online.barrons.com/article/SB112872694630463336.html
Just a theory of mine:
The longer this market remains resilient against the considerable headwinds that have been building, the more likely reserved bears will come out of the woodwork. By reserved, I meen people who usually “shun publicity”. There are various possible explanations for this, but they are all loosely centered around ordinary impatience.