IPO's As Market Indicator?

Can the success, or lack thereof, in the IPO market predict future market performace? In the July 30th 2006 New York Times article entitled 'If Initial Offerings Fall Short, Start Looking for Bulls', Mark Hulbert reviewed a study that suggests that recent IPO postponent & cancellations are an "an indication of investor pessimism that may actually turn out to be bullish for the overall stock market." Here is an excerpt:

Worldwide in June, more companies withdrew or postponed their initial public offerings than in any other month since March 2001, according to Dealogic, a firm based in London that monitors the new-issue market. That March 2001 trough came less than halfway through the 2000-2 bear market, leading many investors to worry that the current gloom in the new-issues market is a harbinger of much lower prices for stocks.

But the stock market’s continuing decline in the months after the March 2001 I.P.O. bust was probably an anomaly, says Jay R. Ritter, a finance professor at the University of Florida who specializes in I.P.O. research.

An analysis of initial offerings market since 1980 suggests that, all else being equal over the next 12 months, the market between now and the summer of 2007 is likely to produce above-average returns.

I found this article interesting, but wished that Jay R. Ritter would have studied the IPO market back to more bearish times, such as the mid-1960's or even further.