Market timing is a nasty, nasty business that should only be undertaken by those who witnessed the stock market Crash of '29. The two legends in this game were there in '29 and between them boast more than a century of staring down historical stock market charts.

Richard Russell represents the youth movement in octogenarian marketing timing. The author of the Dow Theory Letters is barely out of short pants, only 81. Then there is Joe Granville, who authors Granville Market Letter. Joe's a youthful 82.

Until recently, both of these American stock market legends were rampaging grizzlies in the bear camp of stock market prognosticators - but that has changed dramatically.

Russell, a longtime bear who has been growling feverishly about hoarding cash and buying gold as an insurance policy against a severe market meltdown, recently made the stunning pronouncement in the Dow Theory Letters (www.dowtheoryletters.com) that he was turning "totally neutral" on the stock market. For Russell, that's a bullish stance.

Russell confessed that the stock market may be on the verge of a major breakout, basing his view largely on the fact that the Dow Jones Utilities Average (DJUA) recently hit an all-time high. That's quite a diversion, particularly for one whose rants in recent years have, on a scale of grumpiness, out-grumped the screen performance of Walter Matthau in Grumpier Old Men.

Wrote Russell in a recent note: "The chart shows that if the S&P (500 index) reaches 1,250, this would be a powerful upside breakout, with a large upside target hundreds of points higher.”

(The S&P 500 was recently at 1,245 and flirting with the 1,250 barrier).

While maintaining his long-term bearish call, Russell advised "speculators" to buy Spyders (SPY on the American Stock Exchange), which tracks the performance of the S&P 500 index.

That puts Granville (www.granvilleletter.com) at the opposite end of the spectrum. Granville, whose calls are strictly based on technical analysis, has been forecasting a stock market crash for late this year that could take the Dow Jones Industrial Average down as low as 7,400 (no, that's not a typo!) from its recent 10,678 level.

The obvious question, of course, is how two market timers who spend their waking hours drawing crayon lines through sophisticated charts could have such contrasting views. One can only guess, but perhaps one of these growly octogenarians has been inadvertently analysing charts from the Iraq Stock Exchange or some other locale. It can happen. I can distinctly recall once drawing a crayoned line through a Nortel Networks (TSX:NT) chart only to find that it wasn't a Nortel chart but the Hahnenkamm World Cup downhill ski run in Austria.

What you ought to know is that even the most seasoned of market timers can get it wrong.

While the Hulbert Financial Digest rates Russell's Dow Theory Letters among the top-rated market-timing letters, Russell has remained bearish for several years through some powerful market rallies.

During 47 years in which he has published the letter, Russell's best call was in December of 1974 when he advised subscribers to buy the stock market at a time when most people were shunning Wall Street like the plague. The Dow had already plunged 35 per cent in 1974. Within 18 months of Russell's bullish call, the market had surged 75 per cent.

Meanwhile, Granville, a pioneer of technical analysis, made his name with some uncanny calls in the 1970s but his reputation took a pounding in the 1980s.

In 1982, Granville predicted a stock market crash, advised his followers to short the market and then remained bearish while the market embarked on a monstrous rally, doubling in the next five years. Granville was recently boasting on the Money Talks program on the Corus radio network about having called the top in gold in 1980, but made no mention of his boo-boo of '82. To his credit, Granville did apologize to subscribers for that blunder.

If Granville's prediction of a crash doesn't materialize this time either, an apology may not be quite enough. His followers might ask him to read a different kind of chart - an eyechart.

* MICKEY MOUSE CEOS? So you thought those oilpatch CEOs whose companies have seen their stocks double or triple in the past couple of years are all geniuses? Well, think again. And listen to Calgary small-cap aficionado Randy Oliver.

Asked about his outlook for the energy sector, Oliver, president and portfolio manager of Hesperian Capital Management, quipped: "My big concern is that there are probably 15 or 20 companies that have real professional management in the industry and then there is a whole pile of fluff that are only making money because the oil prices and gas prices are so high. And if there's any weakness (in commodity prices), there's going to be carnage because they're not being run very well.

"There are probably only 20 really great (management) teams in the small- and intermediate-sized market and there are about 150 companies (in the Calgary oilpatch) so that means that probably about 130 of them are incompetent. For instance, the price of finding oil and gas has skyrocketed, but not for the really good teams. It's an ugly industry right now. There are a lot of poorly managed companies that think it's easy, but this is one of the most complicated industries in Canada. There are people without the right experience and without the right knowledge who look smart in this environment and they would look horrible in a $40 (US per barrel of oil) price environment."

Does Oliver think that Mickey Mouse could run some of these companies in the current commodity price environment?

"I would rather not use the term, but I think Mickey Mouse is running some of them."

Oliver, who manages the Norrep funds, has picked only one oil and gas stock this year among six picks in the Edge's Pro's 3 Stars feature, but that pick, PetroBank Energy (TSX:PBG), is the third-best performer on the TSX this year with a return of 277 per cent (it's up 212 per cent since Oliver picked it in a February issue of the Edge). Among TSX stocks over $1, PetroBank has only been outperformed by two other plays with oilsands exposure - UTS Energy (UTS), up 358 per cent, and Connacher Oil and Gas (CLL), up 282 per cent.

PetroBank remains Oliver's top pick (for his latest picks, see Pro's 3 Stars, Page 14).

* STREET TALK: Danny Deadlock, publisher of the Hanna-based Microcap.com investment letter, provides an interesting perspective on a recent visit to a gold show in Las Vegas.

Writes Deadlock: "It's tough to walk through a hall of 100-plus exhibitors and sort the wheat from the chaff.

"A small percentage actually have very good mining deals, another percentage might get lucky and half of them are paying some IR (investor relations) guy to push the stock hard enough so they can get stock off."

Deadlock's current outlook is focused on commodities stocks: "Overall, there is a very bullish scenario building for commodities in 2006.

The impact on consumers is rotten as everyone is faced with sky-high gas prices, utility costs, building supply costs, etc. The best way to offset this is to play the equity side and benefit from increased demand for the underlying commodities. That's an area we'll continue to focus on over the next couple of quarters - along with the explosive technology and Internet growth that we should see in China during '06-'07."

* SAGE WORDS: "When (Enron) was $95 (US) a share, you should have had a stop-loss under it at $86. You would have been out of Enron at $86. Wall Street committed the crime of the century by letting people ride Enron all the way down to 24 cents a share and never apologized for not having a stop-loss order."

Hot Stock

Laramide Resources TSXV:LAM $4.05 Up $1.42 (+53.6 per cent) on 2.74 million shares (based on weekly stats through Sept. 16 for Canadian stocks over $1) With many of the junior oil stocks stopping to catch their breath, the junior uraniums have been stealing the show. Laramide shot up on news the Toronto-based company had appointed a couple of advisers, including Michael Connor, president of Nuclear Resources International. Laramide, which has acquired Homestake's uranium prospects in the U.S., has seen its shares quadruple over the past year.

Cold Stock

West 49 TSX:WXX $1.78 Down 42 cents (-19.1 per cent) on 3 million shares (based on weekly stats through Sept. 16 for Canadian stocks over $1) Sometimes, it makes sense to book some profits before earnings are released, even if you were one of those stoked shareholders holding stock in this retailer popular with skateboarders and snowboarders. West 49 shares fell out of bed as the Burlington company announced a surprising quarterly loss of $1,559,836 or three cents a share, but the stock is still up 256 per cent from the 52-week low of 50 cents.

- Joe Granville, in a 2002 interview with Business Week.

(Gyle Konotopetz can be reached at gyle@businessedge.ca)