Market Strategist
Sees Dow
Dropping to 8,000
Temperatures
may be rising, but the Dow is dropping, and will probably find its way down
to 8000, according to Jordan Kimmel, market strategist for First Montauk
Securities Corp. Wall Street investors, however, can pick up a tip from
The Yankees, as the pinstriped Boys of Summer swing their way to a winning
streak."The
Bronx Bombers have kept their eye on the ball and that's just what investors
need to do," says Kimmel. "Like the big leagues, there are many
distractions, but investors need to stay focused and concentrate on defensive
maneuvers."With
key large-cap stocks already breaking their price momentum, I believe we
will soon see Dow 8000," Kimmel continues. "But there is no need
to fear a declining Dow, since the broader market has alredy dropped to
this level. Indeed, this has created buying opportunties, as evidenced by
the Russell 2000, which last reached this valuation relative to the S&P
large-caps back in 1993."For
the long-term, Kimmel observes that many of the factors that have driven
the bull market remain in force. "Low, stable interest rates, tremendous
asset flows into the market, and an absence of major international conflicts
all favor growth in the stock market," he says. "Be ready and
beware."Kimmel
explains that the market remains in a rotational mode, with retail stocks
gaining strength from consumer confidence. In this sector, his favorites
include Party City (Nasdaq PCTY) and Pier I Imports (NYSE
PIR). "Although both have pulled back from their highs, they are good
buys and serve as examples of the correction that has already taken place,"
Kimmel says.