Subj : Market Action To : All From : Paul Rogers Date : Sun Jan 05 2003 09:06 am

Today I heard a radio discussion about a collection of mutual funds.
The host tried to make his point by averaging the percentage return of
the group of funds.  Don't do that!  It's incorrect to average
percentages.

The best that can be said about today Market Action is that the Street
didn't suddenly decide it made a mistake.  Prices were unchanged and
Volume was well below yesterday and average volume.

I'm not quite sure what to make of Volume these days.  I expect high
volume as capitulation marks the real bottom.  Since a Bottom isn't as
much an event as a process, it wouldn't be just a day or a week, but
several weeks as Main Street grudgingly decides it's all over and throws
in the towel.  (See the charts on my website and look at the Volume in
July and October.)  After that I'd expect Volume to stay relatively
subdued.  Wall Street pros might need to restructure their portfolios,
but they know how to do that without triggering heavy volume.  I expect
it would take a long time for Main Street to get interested in the
Market again--after they see signs of stability.  I expect Main Street
has learned its lesson about easy money in Wall Street, but at least
they still want stability.  Average Volume is following this scenario,
if a bit delayed because it's a trailing Moving Average.  I'm a little
uneasy about the few high volume spikes we've had, but those might be
special situations.  If Volume becomes volatile I'll need to rethink.

Price     Vola-     Momen-    Volume    Oscil-    Summ.
Change    tility    tum                 lator     Index
 -__+      -__+      -__+      -__+      -__+      -__+

 _<__      _|__      _|__      <___      _|__      __|_     12/27
 __<_      |___      _<__      <___      _|__      __|_     12/30
 __<_      <___      _<__      _<__      __|_      __|_     12/31
 ___>      <___      __<_      _<__      __>_      __|_     01/02
 _>__      <___      __<_      _<__      __>_      __|_     01/03

Timing Signals:  I don't use or recommend timing signals, but they're
fun to watch.  If I did though, well, I might use something like this.
(Be warned!!  It tends to whipsaw around signal points!)

Last Signal: BUY        Date:  01/02/03 S&P:    909
Winner or Loser:  tbd                   By:     tbd

See my market tracking charts for '01-'02 and my investment strategy
study at my websites:
http://www.xprt.net/~pgrogers/Pers.html
http://www.angelfire.com/or/paulrogers/Pers.html
http://www.geocities.com/paulgrogers/Pers.html
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