Confused about the direction of the stock market? Me too -- espcially after chatting with a super bull and a cautious bear (both of whom sport impressive investment records). Who's right? I'll let you be the judge.

Our bull is Robert Prechter, a 32-year-old well-regarded publisher of the Elliott Wave Theorist of Chappaqua, N..y.

The bear is Phil Hempleman, the 39-year-old manager of the $6.7 million Oppenheimer Target Fund, thus far in '81 the best-performing mutual fund in the country. It's up 36 percent, vs. about break-even performances for the various market averages (give or take a couple of percent).

First the bull story.

On Friday, May 15, shortly after the stock market had would up the day with a Dow reading of 976.40, Prechter put the finishing touches on his monthly investment letter. He boldly predicted that the recent two-week market decline would end early the following week. And what's more, he went way out on the limb by declaring that the low point of the decline would be 962 (on the Dow).

As we went to press, Prechter, a former technical analyst at Merrill Lynch, was looking awfully good. The following week after his forecast -- Tuesday, May 19, to be precise -- the Dow struck a low of 962.27 and then did an abrupt turnaround and went back up. At press time, the Dow was around 971.

The two-year-old Elliot Wave Theorist has about 500 subscribers, including Citibank, money-management biggie Fidelity Corp., Bankers Trust and Blue Cross-Blue Shield. And in his latest letter, Prechter told them that the 15-year sideways trading pattern in the Dow (witht the high always around the 1,000 level) was about to turn into "one of the most dramatic bull-market buying sprees on record."

If you think that's something, listen to this. Prechter also predicted:

A skyrocketing 1,200 Dow by the fall.

Booming 100 million-share volume days on the Big Board starting in the summer.

One large upside gap in the market -- in other words, delayed openings in loads of stocks because of influxes of by orders -- with the market rising at least 40 or more points in just one day.

Surging, broad-based daily rallies (in the summer) in which an overwhelming 1,400 or more Big Board stocks would rack up gains.

Over the past two years, he tells me, he's called most of the major market moves (both up and down). One of his best: series of calls starting in March of '78 with the Dow at 740. At the time, Prechter said buy. In September of that year -- after the Dow had risen to around 917 -- he reversed himself and said sell. A bloodbath took place in October, and by November the Dow had fallen to about 781. Prechter also turned negative in February of '80 with the Dow he's only human, Prechter goofed by remaining bearish while the market rose 100 points. However, he did turn bullish at around 860 and so he caught at least a 140-point advance as the Dow subsequently scooted to 1,000.

As a technical analyst, Prechter closely follows such indicators as trading volume on the Big Board, advance-decline figures, activities of corporate insiders and advisory service sentiment. But the backbone is the Elliott Wave principle. A brainchild of the late R. N. Elliott, it's based on the theory -- developed from massive research -- that all bull markets are based on five up-and-down moves; in other words, up, down, up, down, up. The most important and vigorous of these -- the one, says Prechter, "where just about everyone makes money" -- is the third stage. And that's the one, he adds, that we're about to enter.

Prechter believes there's a possibility that the Dow just might drop to 960. And that, he says, "would be the last buying chance." The unmistakable word to his clients: "This is the time to be 100 percent invested . . ."

The Hulbert Financial Digest, a Washington outfit that tracks investment advisers, finds that of the adviers focusing solely on the stock market (without stock recommendations), interest rates and precious metals -- which is exactly what Prechter does -- the Elliott Wave Theorist has the single best record.

That being the case, it's worth noting that Prechter thinks gold is headed considerably lower (to $388 an ounce) and that interest rates have peaked and decline at least 500 basis points (or 5 percent) by the fall.

It's those currently high interest rates, by the way, that heavily concern Hempleman about the market. And so, he's moved the Target fund in the past couple of months from a 5 percent to 24 percent cash position. The bond market -- which is competitive with stocks -- has to move first before equities can go a good deal higher . . . "and we don't see that happening soon," says Hempleman (who also runs the $221 million Oppenheimer Special Fund).

Hempleman tells me that Target's strong performance is more a funcion of being in the right stocks than being right on the market. His big winners this year: MCI Communications, Kirby Exploration, Control Data and Universal Resources.

His three favorite stocks for '81: Lockheed, MCI and Sony. Recent stock purchases include Air Florida, TWA, Denny's and McDonald's. He's also high on two new issues: Cable TV Idustries and Durado Microsystems.