Despite a strongly bearish long-term outlook, technicians Stephen Hochberg and Robert Prechter continue to see near-term upside for the market.

In The Elliott Wave Financial Forecast, a specialty service focused on a form of technical analyst known as Elliott wave theory, they explain, "Optimism is definitely on the increase, but it is not yet as the exteme that typically accompanies the end of a Primary degree rally.

"So notwithstanding near-term gyrations, the Dow should rise to the initial target, which remains in the 9,000 to 10,000 range.

Each year Steven Halpern, editor of TheStockAdvisors.com, surveys the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is part of his 24th annual Top Picks Report.

For both of their top picks for 2007, Steve Hochberg and Pete Kendall look to ETFs -- the iShares Lehman 1-3 year Treasury Bond Fund (ASE: SHY) for conservative investors and a short position in the iShares S&P SmallCap 600 Index Fund (NYSE: IJR) as a speculation.

The co-editors of The Elliott Wave Financial Forecast explain, "Stock prices have been crashing since 1999 in terms of real money, a fact of which nine out of ten people are unaware. From 1980 to 1999, stocks rose in terms of paper dollars, gold, and commodities. Since 1999, a historic shift out of stocks and into hard cash or 'things' has been underway.

"Relative to gold, the Dow is down 56% and the NASDAQ is off 78%, with new lows made this year. Similar stock market behavior occurred from 1966 to 1980, a time period that included a decline of 50% in the S&P 500 index.

"The Dow is at a new high in nominal terms due to credit inflation, which has allowed the index to stay up because the measuring unit (the dollar) is falling. Historically, whenever a discrepancy between the performance of the Dow in real terms and the Dow in nominal terms develops, the Dow in nominal terms always plays catch up to the Dow in real terms.