NEW YORK -- Despite the market downturn in Tokyo, Wall Street's Dennis Jarrett is not yet throwing in the towel on equities.

Mr. Jarrett, chief market "technician" for Kidder, Peabody & Co., tries to cut through the fog of statistics and determine the future of the U.S. stock market. And he sees a market that could rebound in the next few weeks, based on low inflation, the presidential election-year cycle that favors a strong economy, and the lack of good alternative investments.

"Sentiment has become very negative in the marketplace," he said. "But it's worth remembering that the market in general, not the Dow Jones industrial average, but other market indexes, is pretty well washed out. The NASDAQ over-the-counter index peaked in February, for example." The downturn in the Dow last week was a case of the blue-chip market catching up with the broader market.

While not ignoring the Tokyo market's problems, they have been "overblown" here, said Larry Wachtel, a vice president with Prudential Securities Inc. He was encouraged by a sharp rally in the Dow last Thursday, despite bad news in Tokyo last Wednesday. On Friday, prices in Tokyo and New York rose strongly.

Gene Jay Seagle, a vice president with Gruntal and Co., an investment house, predicts a market rally this spring. He said the coming to maturity of $150 billion worth of bank certificates of deposit now earning low interest rates should help.

"Some of that money can be expected to be shifted to equities," he said.