Stock prices are expected to continue rebounding as bombs fall over Baghdad - not directly because of war, but because investors have been longing for a resolution to the country's edgy mood since war talk began last fall.

The market could have responded well to a peaceful resolution. But let's face it: War is the most definitive resolution there is.

So says Ralph Acampora, the chief technical analyst for Prudential Securities and one of the best-known market gurus on CNBC and other financial media.

Acampora is also co-founder and president of the Market Technicians Association, a national organization dedicated to promoting technical research and analysis of the stock market.

He will be the guest speaker at Wednesday's meeting of the MTA's Cincinnati chapter.

The meeting - at 7:30 p.m. at the Airport Holiday Inn, 1717 Airport Exchange Blvd. - is free, and no reservations are required.

Market forces

Technical analysis is the practice of examining trends, momentum and historical precedent for predicting where stock prices are going.

By contrast, fundamental analysis focuses more on a company's specific financial picture. Profits and revenue growth, for example, can help tell an analyst what a company should be worth.

But just because a stock's profits and growth show that it should be trading at, say, $50 a share, doesn't mean the market is in a mood to price it at $50 a share.

Technical analysis takes into account market forces - such as trading ranges and historical swings - that strict fundamental analysis can overlook.

Acampora is one of the best technical analysts in the country.

He reached near-celebrity status in the 1990s after correctly predicting Dow 7000 in 1997 and Dow 10,000 in 1999. In an interview with the Enquirer in mid-2000, he also predicted that the market's decline wasn't far from being over.

Rational investing

Acampora's talk is titled "A Return to Rational Investing."

Markets became irrational in the 1990s when prices ballooned beyond historically normal valuations.

"People came to expect instant gratification," he said this week. "No one had a sense of risk."

A return to rational investing means remembering that stocks carry risk, and investors can lose money.

But a way of managing that risk is to carefully examine a stock before buying it. Look for strong dividends, look for stocks with rational valuations.

Rationally managing risk also means being prepared to sell a stock. Investing for the long-term might mean holding a stock for only a few years, not a lifetime.

Also look for stocks that have strong, trustworthy management.

"People did that in the old days, and people made a lot of money," he said. "And people forgot that."

Contact Amy Higgins at 768-8373; e-mail ahiggins@enquirer.com; or 312 Elm St., Cincinnati 45202. She regrets that she cannot reply to all individual questions.