Subj : Market Action To : All From : Paul Rogers Date : Thu May 01 2003 08:17 pm

The Market remained stuck today.  But volume was only average.  Now,
here's something to remember for the future--the Summation Index is over
4,000, going off my chart.  That's to be expected.  The Oscillator,
hence the Advance-Decline Line, has been positive for almost two months.
That's going to bias its effectiveness as an indicator in the future.
And we know Summers can be hard on the Market.

I use a 5% Exponential Weekly Moving Average to track my IRA's mutual
funds.  I started in 1994.  Exponential moving averages are a bit easier
to use than an Arithmetic moving average.  In an Arithmetic moving
average, you collect prices over some preceeding period of time and
calculate the arithmetic average.  In Exponential averages you take a
certain percentage of the current price, say 5%, and take the rest, 95%,
from the previous moving average, and add them.  It can be started with
only two values, rather than collecting a long period of data.  A 5%
average changes faster than a 1%, and slower than a 10%.  I've plotted
them all, and a 3%-5% looks best to me--your mileage may vary.

Now, I don't track the price, but the week over week change in price.
And of course, I have to adjust for fund distributions which change the
price if not the value.  So, I'm exponentially averaging the weekly
change.  When the average crosses zero from negative to positive then it
has shown a turn-around that isn't just a "flash in the pan".  Or is it
that finally the Market appreciates the value of the stocks in which the
fund has positions?  Conversely, when it crosses zero from positive to
negative, it has shown that it's management has taken positions in
stocks the Market no longer adores.  Has management lost it's way, and
is now out of step with the Market?

We know how fickle the Market can be, so as a "signal" it needs to be
tempered with judgements from other sources.  I use it as a guide by
which I adjust my asset allocations.  Virtually all my funds have been
negative since last summer.  With a 1% average, effectively averaging
over a longer period of time, they are all still negative--skeptically
saying "not yet".  Some I have had and may have again, have been
negative since at least the start of 2001 I have on the chart before me.

Not surprizingly, with the strong rally of the past couple months,
things have improved.  This week they all turned positive, so I will be
reconsidering my current asset allocation.  But this rally looks
exhausted.  It's a good thing to have good analytical tools, but in the
end it all comes down to decision points like this.  The tools may
advise us, but the decisions, and consequent investment results, are
ours.

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

 _|__      _>__      __|_      _|__      __<_      ___>     04/25
 __<_      _>__      __>_      _<__      __<_      ___>     04/28
 __|_      _|__      __>_      __<_      __|_      ___>     04/29
 _>__      _|__      __>_      __<_      __|_      ___>     04/30
 _>__      _|__      __>_      __<_      __|_      ___>     05/01

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:  04/01/03 S&P:    858
Winner or Loser:  tbd                   By:     tbd

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
.... Truth has nothing to fear from examination. ___ MultiMail/MS-DOS v0.35 --- * Origin: The Bare Bones BBS (1:105/360) .