Subj : Market Action To : All From : Paul Rogers Date : Mon Nov 24 2003 05:14 pm

This morning the market jumped at the open on decent volume.  Through
mid-day it hung tough at that level, and rose again at the close.  My
Timing Signal reversed itself again and popped a Buy signal.  The news
from the typical Street gurus was just less than ecstatic.  Not bad, eh?
I didn't call it an Accumulation Day, did I?  Look at the Volume chart
below--it's below the line.  We were -6% below average again.  So,
"did'ja mean it?  Not really."  That's called a "divergence".  Some
technicians would even call it a Bearish Signal.

So to return to investing for the present time using more traditional
strategies and tactics, what can we look at?  First, abuse yourself of
the 20-30% annual gains of the 90's.  ON AVERAGE the gain between 1926
and 1983 is more like 11%.  That means slower "long term" growth over
the year, prices "drifting" higher.  But that DOESN'T suggest the short
term volatility should be any less.  We should expect many more or less
equivalent rallies and corrections throughout the year.  I think it's
going to be critical that we not get stampeded into investing at the
tops of rallies--that means the 7% Solution is more likely to kick us
out before our investment has a chance.  The problem is our BUYING, not
the 7% Solution!  We can't let the market run up, to provide before we
decide it's safe to buy, reinforcing to our decisions.   If we let the
market run up 5% before we decide to make an investment, our expectation
for the year would be just 6% more, with traditional risk.  Tactics are
going to be more important.

But at the same time good strategies and "styles" are also going to be
more important.  "Dollar Cost Averagers" are going to see those deposits
they doggedly and courageously made during the past couple years show
gains as the market just returns to former levels.  And their strategy
will keep them from reacting to the short term rallies and corrections.
By the way, in case you haven't noticed, "DCA" isn't a "get rich quick
scheme".  You have to keep making those monthly deposits, in good times
and bad.  Asset allocation will also be important.  We know interest
rates will be rising, so bond and "balanced" funds can be expected to be
disadvantaged.  There are other good tried and true strategies, and a
whole lot of bad ones.  We'd be money ahead researching strategies
rather than which stock is supposed to go up this month!

So, as I said last week, we should learn from the past decade that
markets go up, sometimes irrationally so.  We need to admit that
intelligent as we may be, we're NOT going to recognize a bubble on its
face.  We need tactics and strategies to protect us from getting
suckered into those things and being too "drunk" to recognize everybody
is leaving the party.  We should learn the market also DOES go down, and
we DO need strategies and tactics that protect us.  I've lectured you
mercilessly on the 7% Solution.  Maybe you can use it, maybe not.  What
CAN you do?

I published my own "Top 10" list on my website.  In one of those I
suggest the best investment we can make is in educating ourselves!  But
it's like DCA, it isn't a get rich quick scheme, you have to be the one
doing your homework!  Nobody can do it for you!

Now is the time.  If what you know of investing is the last decade, it's
a new day.  Opinions may differ, but I think it's going to be a lot more
like the old days than we're used to.

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

 _<__      |___      _|__      _|__      _<__      ___|     11/18
 __<_      |___      __|_      _|__      _<__      ___<     11/19
 __<_      |___      __|_      _|__      _<__      ___<     11/20
 __<_      |___      _|__      _|__      _|__      ___<     11/21
 __>_      |___      __|_      _|__      _>__      ___<     11/24

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:  11/24/03 S&P:    1052
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
.... Never trust a smiling cat. ___ MultiMail/MS-DOS v0.35 --- * Origin: The Bare Bones BBS (1:105/360) .