If the typical Wall Streeter were to utter a Yuletide wish, it would probably be this simple plea: "Please, no more November 15ths!" That day's painful, 120-point decline in the Dow Jones industrial average has been followed by three weeks of queasy, nervous trading, with the market often swinging widely in a matter of hours. Investors, it seems, are uncertain if the economy is so seriously weakened that it will send the market thundering down again. Well, the Street's army of chart-gazing technicians also have a simple Christmas wish -- a crash helmet.

Technicians are sounding the alarm again. Some of the most widely followed technical gurus, including the Professional Tape Reader and Elliot Wave Theorist market letters, are issuing dour forecasts of an impending stock market calamity -- and they are doing so with the same fervor that accompanied the gloomy proclamations of this summer (BW -- Aug. 5). True, they concede that the Nov. 15 setback was nowhere near the Armageddon that many of them had been predicting a few months back. But the day of reckoning, they maintain, is inevitable -- though it may be postponed for a few months in the event of election-year "magic and mirrors," says Peter Eliades, editor of the Stockmarket Cycles newsletter. "We're very bearish," says Eliades.

SUCKER PUNCH. Unlike their counterparts who track such fundamentals as interest rates and corporate earnings, technicians follow graphs, waves, and formulas that trace such things as trends in prices and volume. And those numbers are giving them little reason to believe that the Nov. 15 decline was a one-day affair, resembling the market's hysteria on Oct. 13, 1989, when the Dow fell 190 points but quickly recovered. Nor are they assuaged by ultralow interest rates, which have left the stock market as the only potential source of substantial returns.

Indeed, technicians maintain that droves of small investors are being suckered into the market by low money-market rates -- which, though tiny, will seem appealing once the market's comeuppance has arrived. They argue that equity investors are in pretty much the same position as real estate investors a couple of years ago -- and should cash out before it is too late. "It's not generally believed, but we're now in a bear market," asserts Dave Allman, director of research at Elliot Wave Theorist.

Some of the more widely followed technical indicators gauge sentiment among both professional and small-fry investors (table). Lately, much of that sentiment has been bullish -- too bullish, in the view of some technical mavens. Among the indicators tracked by Stan Weinstein, the editor of Professional Tape Reader, is the sentiment of his fellow newsletter editors -- which now stands at 47% bullish, which he views as excessively high. By contrast, he notes, just 28% of market-letter writers were bullish in September, 1990, on the eve of the market's rally. Weinstein is also concerned by the lack of breadth in the rallies that preceded the Nov. 15 correction. Although the Dow and the Standard & Poor's 500-stock index hit new highs, only a few stocks reached all-time highs. Observes Weinstein: "Fewer Indians were following the chief up the mountain."

'INTERESTING DAY.' There is a ray of sunshine in even the most gloomy technicians' predictions, however. They maintain that the market is not facing an imminent Custer-style massacre and that investors will have ample opportunity to cash out before it's too late. Take the 40-point surge on Dec. 2. "A very interesting day," says Richard A. Diamond, an independent trader and technician. The Nikkei stock index had fallen 3%, which threatened to set off a chain reaction in New York. And sure enough, the market declined dramatically, to a stomach-churning low of 2864 -- a 30-point decline in the first hour. But then, the market began to rally -- "in a very bullish fashion," Diamond notes approvingly -- as bargain hunters waded in and the rout turned into a minor victory.

From the technical standpoint, the Dec. 2 rally was significant -- indicating that the market has reached what Weinstein describes as a "short-term bottom." And Diamond feels that the market may rise as high as 3200 in the first few months of 1992. But he expects the market to collapse thereafter -- falling by as much as 600 points.

Will it happen? The technicians have been wrong -- or at the least, premature -- in the past. But if the economic news continues to sour, all but the most stalwart bulls will begin to see that those little chart squiggles may be ominous after all.

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