Following yesterday’s 217-point run-up in the Dow and a mediocre first half during which the major averages turned in flat or negative performances, here’s what every stock player will be thinking about this weekend: In view of a widely expected slowdown in the economy and shrinking profit growth, can the market muster a meaningful rebound in the second half?

Ask any five pros that question and you’re sure to wind up with 10 answers.

In any event, this week saw two leading Wall Street strategists – Prudential Equity Group’s Edward Keon and Banc of America Securities’s Thomas McManus – deliver cheerful tidings. Mr. Keon predicts a second-half rise in the S&P 500 of 10%, while Mr. McManus projects a brisk fourth-quarter rally in the index, of 10% to 15%.

Market history, though, shows we’re entering a weak period for stocks, with the S&P 500, post-World War II, averaging an 0.1% loss between July and September. Going back to 1928, the average third-quarter loss has run 1.09%.

On the other hand, the fourth quarter, which historically is the strongest quarter of the year, shows an average gain of 2.5% since World War II and an average increase of 4.2% dating back to 1928.

For some thoughts on the next six months, I rang up one of the country’s savviest investment minds, Fred Dickson, a former Goldman Sachs strategist. His second-half outlook calls for a combination of three markets – the good, the bad, and the ugly.

First to the bad-which is Mr. Dickson’s vision of a trendless market between now and mid-July.

Then the ugly – a downdraft, with the Dow, which closed yesterday at 11,190.80, skidding to between 10,400 and 10,700 by mid-September. “We’re in for a painful snag, especially in smaller stocks.” he says. “We’ll see small trading rallies and pullbacks in this period, but the trend will be lower.”

Finally, to the good – Mr. Dickson’s projection of a spirited rebound, roughly a 12% to 15% fourth-quarter rally, which will lift the Dow to about 12,000 by year-end. If that were to occur, it would be equivalent to about a 12% Dow rise in 2006.

To our market expert, it means there’s “just no need now for an investor to stick his neck out and be a hero. I’d just wait to buy because you’ll be able to buy cheaper down the road.” By the same token, he’s not suggesting any aggressive selling, observing: “This is the time to look for super entry points, not panic exit points.” Or put another way, he says: “Keep your seatbelts on ’till mid-September. For sure, it’s no time to pull the parachute and bail out.”

How does he come up with his good, bad, and ugly scenario?

Mr. Dickson, currently chief investment strategist at the regional brokerage chain DA Davidson & Co., figures there will be a number of pressure points before mid-September. Chief among them: the second-quarter earnings reporting season, which will likely be accompanied by cautious guidance from management and investor worries about a slowing economy, a slowdown in earnings growth, the course of interest rates, and inflation. (He pegs third-quarter earnings growth at 5% to 7%, versus an estimated 11% to 12% in the current quarter).

Starting in mid-September, just prior to the September 20 meeting of the Federal Reserve’s Federal Open Market Committee, he expects the market to begin to strengthen in anticipation of a change in Fed policy. Basically, he sees just one more rate hike – a 25 basis-point rise in short-term rates, to 5.5%, in August. His theory is that just prior to the change, the market will begin to aggressively reflect it through rapidly rising stock purchases.

“Santa will deliver the goods to Wall Street this year,” he says.

What about worries such as North Korea, Iran, and the midterm elections?

Mr. Dickson thinks Fed actions would overshadow any election concerns. As for North Korea and Iran, he views them as geopolitical wildcards that will keep market nervousness elevated. “But I doubt these situations will get worse or go away,” he says.

So how would he play the market? Mr. Dickson expects financials, such as banks and brokers, to lead the way. He favors JPMorgan Chase, Citigroup, Goldman Sachs, and Lehman Brothers Holdings. Likewise, he sees a rally in consumer cyclicals, with his best bets being Kohl’s, Wal-Mart Stores, and Home Depot. The energy sector remains a favorite, notably natural gas companies such as Pioneer Natural Resources.

He figures any fourth-quarter rally would embrace a bounce in technology stocks. Here, he favors beaten-up Dell and Intel, plus Texas Instruments and Oracle Systems. He also sees a potential year-end rally in auto stocks, but he views any buying in General Motors and Ford as very speculative.

dandordan@aol.com