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Show 1 4 P The Salt Lake Tribune, Sunday, August 8, 1982 Mood of Strong Pessimism Hovering Over Wail Street Brokers 3y Dan Dorfman The latest words from Wall Streets coming as leading technical gurus they do amid a topsy-turvfrightening and at times near panicky are getstock market environment y, ting grimmer with each passing downtick in the Dow. And even the prospect of a minimarket rebound which a number of pros are preisnt ; dicting likely to stem the increasing tide of pessimism. From Merrill Lynch technical research chief Bob Farrell, probably the single most influential force in the technical arena among the big institutional investors: It looks like weve seen the top of the summer rally, that were now on the way down and we could see a break in the Dow to the low 700s. And from technical boss Alan Shaw of Smith Barney, Harris Upham & Co: We no longer see the market having the muscle to follow through on the upside . . . and the Dow could well break its 82 low. That 82 low a Dow reading of just under 789 was recorded July 18, and, may, in fact, have already been broken by the time you read this. Importantly, Shaws sentiments reflect a conspicuous shift from a view held by a number of technical analysts just a few weeks ago that the worst of the bear market decline a wicked decline in the Dow of over 200 points since April of 81 had just about run its course. Technical Indicators Now, though, deterioration has beset a slew of significant technical indicators followed by the fraternity of s. And this has prompted a number of them to downgrade their near-terwith several expectations grudgingly acknowledging that new 82 lows in the Dow are now a strong possibility. Among the technical indicators showing deterioration are the number of advancing issues, vs. the decliners; the number of stocks hitting new '82 highs, vs. those falling to new lows; the number of stock groups participating in rallies, and the ratio of put option activity to call options. Farrella observes that fewer and fewer stock groups are working. And one by one, the upside stocks (namely, in the airline, consumer and gambling sectors) are fading. Combine this with the continued technical deterioration in both the oil and technology sectors and it becomes evident, Farrell says, that were getting to where theres no place to hide. The major problem, asTFarreD sees it, is that theres not enough fear. You make bottoms when nobody wants to own stocks and we havent yet reached that point, he says. There's just too much underlying complacency, too n to some of the much worst earnings in the postwar decade (such as in the steel industry) and the record number of bankruptcies. However, Farrell believes the market is moving toward capitulation (he sees the low 700s coming by late chart-watcher- under-reactio- m summer or the early fall). And that, should mark the final bottom. about An even lower Dow reading 680 -- - is anticipated by the end of next month by Justin Mamis, a technical analyst whos a consultant to the institutionally& oriented brokerage firm of Wertheim The leading stocks of just a such as General Motors, ago Bally Mfg., Goodyear and General are breaking down. Dynamics The stocks that were recently drawing the bargain hunters, like Caterpillar Tractor and Deere, are now losing support and could soon be heading to new lows. he-ad- ks few-wee- well-regard- Co. A basic rule is that stocks that cant up must go down and thats currently the flavor of the market, View of Analyst go At a meeting this past Wednesday just prior to the market opening, Mamis told Wertheim salesmen to use any rally to sell stocks. When you can make a lot more money selling short (a bet on lower stock prices) in whaCs supposed to be a rally, the market is clearly saying that it doesnt want to go up, he asserts. Mamis tells me that all segments of the market are coming together on the downside. In support of this, he notes the following : The favorable long-tergroups, like the food companies and the retailers, are tired; theyre starting to correct (going down) and should undergo substantial declines. says Mamis. An analysis of his stock charts indicates that the most vulnerable securities are American Express, Caterpillar Tractor, Tandy, National Semiconductor and Data General. Mamis is the author of a recent stock market book called How To Buy. I wish it were quipped; then How'To Id really Sell he be on target. Adviser to Industry Skip Becker, who runs a Chicago outfit called HPB Trading Systems, a U..'hnical adviser to about two dozen institutional biggies with some $50 billion of assets, urged his clients last Tuesday to sell on any raiiies. The last of four major indicators the firm tracks the volume changes on 100 selected turned option stocks on the Big Board sour. And that led Becker to forecast a minimum drop in the Dow to 740 with an outside possibility that the Dow could fall to as low as 700 during a given days trading session. My indicators are very bearish and the best I see on the upside is 840, he says. m Automated Tellers Save Banks Cash In casinos, on campus and NEW YORK (AP) even at the ice cream fountain, Americans are doing their banking by machine, more than 26,000 of them, dispensing money and taking deposits 24 hours a day, seven days a week. 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