Subj : Market Action
To   : All
From : Paul Rogers
Date : Fri Oct 22 2004 05:59 pm

Content-type: text/plain

Nasty, gloomy day.  Prices continued to fall, below 1100 again.  Volume
also fell, just 5% above average.  I'd expect that to happen late next
week as the mutual funds wrap up their major reallocations.

Don't panic!  The "controlling" technical formation analysts will be
looking at is this declining trading range or channel.  The bottom
"support" line is down at 1063, another -33pts down.  It can drop that
far in the normal course of trading and still be considered "normal
behavior".

However, prices are below their moving averages.  The long-term 200-day
moving average is flat, the intermediate-term 50-day moving average
peaked back in March and has been trending lower since, as has the
short-term 20-day moving average, albeit with more volatility.  When
prices are below their moving averages, you're more likely to see Bears
than Bulls.

The Oscillator is inflecting right now, but its trend over the past two
months is down.  It has turned around the Summation Index. That means
the Advance-Decline line has been accelerating to the down side.  Stocks
have been sold-off across the board.  Over that same couple months
volume has been trending higher.  More stock has traded as prices have
fallen.  That's usually a Bearish signal.  And I'm talking about notably
consistent trends for two months.  I won't venture a guess how much
longer it will last.

Don't panic, but don't try to catch the falling knife either.  Get in a
comfortable, safe, defensible, conservative position, wait and watch.
This is the time Value Investors and contrarians are going to start
showing interest.

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

 __|_     _>__     _|__     __>_     _|__     ___<     10/18
 _|__     _>__     _|__     ___>     _|__     ___<     10/19
 __|_     _|__     _|__     ___>     _|__     ___<     10/20
 __|_     _>__     _|__     __>_     _|__     ___<     10/21
 _<__     _>__     _|__     __>_     _|__     ___<     10/22

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:  10/13/04 S&P:    1114
Winner or Loser:  Winner                By:     +4

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

.... Every hard-boiled egg is yellow inside.
___ MultiMail/MS-DOS v0.35
---
 * Origin: The Bare Bones BBS (1:105/360)

.