Subj : Market Action To : All From : Paul Rogers Date : Thu Feb 06 2003 05:44 pm

I think I read that Bill Gross, Pimco's Bond Boss, thinks fair value of
the DJIA is around 5,000, not nearly 8,000.  Those sorts of valuations
rely on certain assumptions.  They might even be right, but I don't pay
too much attention to them.

Three weeks ago the S&P500 was just under 100pts higher.  We've lost 10%
in 3 weeks.  OK, I got that.  Now forget it.  That was then.  Somebody
is holding stocks at these prices now.  Mostly that's the big money,
mutual funds and investing institutions, CALPERS, et al.

Here's my question: why would you be holding stocks at this point if you
were worried that war and the economy are likely to drive prices down to
around 5,000 on the DJIA, 500 on the S&P500?  That's another way of
saying investors believe they are pricing the Market at about the right
level for the current known conditions.  OK, the reason is: doing that
is called "timing the Market", and it's not something those investors
do.  They might hedge a bit, the PUT:CALL ratio was up yesterday, but
they won't try to time the Market.

Back in July we saw prices drop 102pts in just 1 week.  If things were
so bad we could easily have taken out the October low.  I'm a little
surprized we haven't.  And if all this means the amateurs aren't playing
in the Market these days, that's a positive sign in my opinions.

That doesn't mean there's any reprieve on the 7% Solution though!

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

 __>_      __>_      _|__      __>_      _>__      __<_     01/31
 __>_      __>_      _|__      __>_      _>__      __<_     02/03
 _|__      __>_      _<__      __|_      _>__      __<_     02/04
 _|__      __>_      _<__      __|_      _>__      __<_     02/05
 _<__      __>_      _<__      __|_      _|__      __<_     02/06

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: SELL       Date:  01/17/03 S&P:    902
Winner or Loser:  Loser                 By:     -7

See my market tracking charts for '01-'02 and my investment strategy
study at my website(s):
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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