Subj : Market Action To : All From : Paul Rogers Date : Mon Jun 14 2004 07:32 pm

Today was much like many we've seen over the past few weeks.  The market
opened lower, "gapped down", and sank from there.  Volume continues much
below average, -15% today.  The Advance:Decline ratio was less than 1:5!

Nearly 3 weeks ago my timing signal popped a Buy Signal, but my analysis
wasn't enthusiastic about it.

This low volume isn't really unexpected--it happens almost every summer.
But how significant is it?  I usually report daily volume with respect
to the 30-day Moving Average.  Since I have the daily percentages, can I
just average them and speak about that?  No, you can't average averages.
Not first, but not least of the reasons is that the moving average
itself changes day to day.

In the past 15 days since 5/21/04 approximately 18,847Ms traded.  In
comparison the average volume for the previous 30 days before 5/21/04
was 1514Ms, suggesting at that rate we could have expected 22,710Ms to
have traded, 20% more.  We are 31pts higher than 15 days ago, even
allowing for the 17pt drop in the past four days.

Compare that to the first of the year, when we were still in last
winter's rally.  Total volume for the first 15 days was 24,087Ms.  Again
using the average for the previous 30-days, we could have expected
18,195Ms to have traded.  Actual volume was 32% higher.  During this
period prices rose 34pts, roughly comparable to recent performance.

The function of a Moving Average is to remind us what values have been
over the recent past.  The trick is to pick a period that gives a useful
comparison, neither so short that it jerks around rapidly nor so long
that it represents "ancient history" no longer relevant.  There's no
implication that values "should" be more, or less, or the same as the
average.  Volume today WAS -15% below average.  The question is what we
make of it.  I usually put a cautionary meaning to such comparisons.

Of course, this year has been dominated by a resistance level up around
1160 or so.  It seems to me the action since my Buy Signal is more akin
of a Bull Trap, the Bulls refusing to accept defeat and struggling to
drive prices higher one more time.  There just isn't enough "oomph"
behind the market move this time to believe it.

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

 ___>      __>_      __|_      _<__      ___|      __>_     06/07
 __>_      __>_      __|_      <___      ___|      __>_     06/08
 _>__      __>_      __|_      _<__      __|_      __>_     06/09
 __>_      __>_      __|_      _<__      __<_      __>_     06/10
 _<__      __>_      __>_      _<__      _<__      __>_     06/14

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:  05/25/04 S&P:    1113
Winner or Loser:  tbd                   By:     tbd

See my market tracking charts for '02-'03 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
Paul Rogers, paulgrogers@yahoo.com -o) http://www.angelfire.com/or/paulrogers /\\ Rogers' Second Law: Everything you do communicates. _\_V .... Editing is a rewording activity. ___ MultiMail/MS-DOS v0.35 --- * Origin: The Bare Bones BBS (1:105/360) .