Subj : Market Action To : All From : Paul Rogers Date : Fri Nov 07 2003 07:34 pm

Today the market had just a slight fade during the day, until the last
half-hour when it dropped.  Typically Main Street has an impact on
trading just after the open, Wall Street pushes its trades at the last
minute.  There was a good jobs report today, which the market ignored.
Perhaps because it reflects improvements in the economy that have
already been factored into prices.

A couple weeks ago I showed you data on NYSE "block trades" of 10,000s
or more in October.  What we were looking for was evidence of mutual
fund managers doing massive tax-loss selling before their FYE, expecting
the supply and demand equation to mean prices would fall into a
correction.  Here's the data I had:
          
   10th  13th  14th  15th  16th  17th  20th  21st  22nd  23rd
  15817 15225 18172 22331 20633 17968 15961 22303 25914 24889

Since then:

   24th  27th  28th  29th  30th  31st   3rd   4th   5th   6th
  21098 20819 25850 23811 24901 21635 19203 20219 20528 20219

So it appears there was a little extra action leading to the 31st, but
it was reasonably subdued.

So what can we infer from this?  Mutual fund managers had apparently
already unloaded all their losers.  Perhaps they did a "blow out" house
cleaning back in February and March, or used the "sell into strength"
tactic to unload them on Main Street during the "Spring Rally".  That's
hard to tell.  We can reasonably infer what they're holding now, they
want to keep.  Perhaps they took my advice over the past year and
upgraded their portfolios, eh?  They don't have to tell us for a few
more months.  What we need to do is look in detail at how stocks behaved
in October--look at the price and volume action.  If you've been paying
attention, you should know what to look for by now.

Still, for a variety of reasons I've commented on here including simply
recovering from very "over-sold" discouragement, prices have improved a
lot.  Investors have been buying stocks of companies in which they have
the greatest confidence of significant price recovery.  When a Bull
Market is getting exhausted, then they'll be trotting out whatever junk
hasn't participated, hasn't already been "fully valued" and then some.
So look through your stocks--whatever hasn't participated in the sort of
price increase experienced by the market as a whole, is lagging for a
reason!  Investors don't want it.  You're an investor, aren't you?  You
shouldn't be wanting it either.  Quit looking at what WAS!  You need to
be looking forward.

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

 __>_      |___      __|_      _>__      __|_      ___<     11/03
 _|__      |___      __|_      _|__      __|_      ___|     11/04
 _|__      >___      __|_      _|__      __|_      ___|     11/05
 __|_      >___      __|_      __|_      __|_      ___|     11/06
 __|_      >___      __|_      __<_      __|_      ___|     11/07

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:  10/01/03 S&P:    1018
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
.... What a piece of work is man! ___ MultiMail/MS-DOS v0.35 --- * Origin: The Bare Bones BBS (1:105/360) .