Wall Street strategists have eyes trained on Middle East. Apart from the oils, stocks could be in for a sag

Bear trap or bull market bonanza? Investors pumped up the Dow Jones industrial average to a record 1,919.71 last week, eclipsing the old high of 1,909.03 set in July. Profit taking cut the Dow to 1,899.75 by the final bell on Friday. Still, the 1.41-point gain for the week leaves the Dow within striking distance of the 2,000 mark.

And a shift appears under way. Until now, a year-long rally had been built mainly on interest-sensitive and consumer stocks -- companies that do well in a disinflationary, sluggish economy. Those issues are overpriced now, some analysts say. Money managers are starting to move into the laggards -- basic-industry stocks (steel, paper, aluminum) that tend to benefit from an economic upswing.

But Joseph Barthel is warning clients not to get sucked into the Dow 2,000 euphoria. The New York-based Butcher & Singer technical analyst expects the index of 30 industrials to climb as high as 1,975 to 2,060 this month. But that's all.

``The ballgame is almost over. This is the bottom of the ninth,'' he says. ``You've got three more weeks to raise your cash position. Cut back on disinflation stocks; the food, drugs, consumer-oriented stocks are hyperextended. Use the rise in cyclicals as a trading opportunity only.''

By month's end, Mr. Barthel says, the Dow will be headed for a 300- or 400-point plunge lasting three to six months.

The market now bears a strong resemblance to the rally that prevailed in late 1983, he says. That upsurge in basic-industry stocks was followed by a sell-off from January until July of 1984.

And he notes that despite the new high on the Dow industrial average, most stocks haven't fared as well. ``In February and March, when the Dow was hitting new highs, you had 300-350 stocks hitting new highs daily. When the Dow broke its record this time, the number of daily new highs was 110.'' In other words, this rally is not nearly as sweeping.

The gregarious analyst says he's watching the Dow transport average and the number of stocks advancing vs. the number declining to gauge how long the bull market will lie fallow. ``If the transports and the A/D [advance-decline] line make new highs this month, then the correction will last three months. If they don't confirm the Dow's highs, then it could last six,'' he figures.

After that, Barthel's optimism returns. The bull market will have a lot of ground to retrace, but he expects it will resume its record run. -- D. C. S.