Dow moves up in late rally

The Ticker

November 14, 1991|By Julius Westheimer

Reversing direction late in the session, the Dow Jones average moved 11 points higher yesterday, closing at 3,065.29. When Wall Street opened today, the Dow indicator stood just 12 points below its all-time high.

AND NOW WHERE? "Stocks were in a long upleg since their 1990 low, but this leg is getting overbought. Take profits." (CS Technical Investor) . . . "At their new peak, Dow industrials are at a whopping 30 times earnings. This is generally seen at a bull-market top. We're taking profits." (Investor's Digest) . . . "I'm still a big bear; we're in the throes of a huge credit contraction." (James Grant, Interest Rate Observer) . . . "There's nothing magical about support-level 2,850; it will crumble into a bear market." (Yamamoto Forecast) . . . "We'd use this high level to raise a little more cash." (Yankee Prognostics)

BRIGHTER SIDE: Elaine Garzarelli, Shearson Lehman vice president known as "the most influential woman in Wall Street" who predicted the 1987 crash, said on Wall Street Week with Louis Rukeyser, "Of my 13 indicators, 11 are bullish. There's no chance of more than a 4 to 7 percent selloff. The Dow average will swing between 3,450 and 4,100 soon, averaging around 3,750 next year. And a 'trough' in the economy is good for stocks, but when the recession ends and the economy peaks in 1993, that's bad for Wall Street. Low inflation is what we want. I like Mead, Apple Computer, Philip Morris, Pepsi and Capital Holding."

GETTING CLOSE: I thumbed through my new 1992 Stock Trader's Almanac at midweek, finding this quote from Eugene Brady, Oppenheimer Capital: "Sell stocks whenever the market is 30 percent higher than a year ago." Sensing we were close, I figured that at midweek the Dow Jones average stood 21 percent higher than one year ago and that one month ago we actually were perched 30 percent above last October's low. (DJ 3,310 would be about 30 percent above today's date in 1990.)

BE CAREFUL: "Something's missing from this year's version of Salomon Bros. annual list of best-performing investment categories: rare U.S. coins. When surveys showed 20-year annual rate of return of 17 percent, that was based on performance of 20 specific coins and didn't have anything to do with coins the mass marketers were selling." (Federal Trade Commission report)

GOOD DEAL: "Nothing fancy about EE savings bonds but with money funds under five percent, these bonds are good deals. They guarantee to pay at least six percent if held five years and now yield 6.38 percent, free of state and local taxes. And you might avoid income taxes on new bonds if you use proceeds to pay your childrens' college tuition." (Kiplinger Personal Finance magazine)

BALTIMORE BEAT: I will answer your "money" questions Sunday, WBAL Radio, 1-2 p.m. . . . Phone Paine Webber's Marvin Fribush at 576-3220 for "Year-End Tax Strategies and Portfolio Recommendations" . . . For his inside story on "no-load" mutual funds, phone Ferris, Baker Watts' Will Benassi, 685-2600 . . . Dean Witter's James Curran, phone 547-7048, will give details of his seminar, "Defining Risk: Key to Successful Investing." . . . Women in business can get help at Office of Minority Business Assistance; call Mitchell Smith, 332-2459 . . . In a "down" market, Baltimore's PHH Corp. popped up in the "12-month new high" Monday listings . . . Weis Markets, rapidly expanding in this area, is listed under "Money in the Bank" stocks in Forbes, Nov. 25 issue.

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