Subj : Market Action
To   : All
From : Paul Rogers
Date : Thu Dec 16 2004 06:39 pm

Content-type: text/plain

The market was below the line most of the day, but prices didn't change
much.  The key was volume, up 20% above average.  So while prices are
nearly where they closed Tuesday, there was much more action to the
downside a few points today than there was when they went up a few
points yesterday--sellers took advantage.

We're down into the short-strokes for the year.  I'd say it's pretty
unlikely there will be a major rally, with the holidays and the tax-loss
selling increasing supply.  So if our "back of the envelope" reckoning
is up 100pts from last January's 1108 start, that's only +9%.  That's up
two years in a row, but hardly enough to be exciting or even compensate
us for the risk.  For a full 10 months prices were constrained by a
"declining channel" formation.

I just went through my commentary for January.  I wondered if I made any
comments about my expectations for the year.  I didn't, but I did say I
was very jumpy about the December-January rally and expected a
correction.  I remember suggesting we needed an extended basing period
after the Bear Market and last year's "snap-back", but maybe that was
last year.

The "January Effect" for this year?  It started at 1108 as I just said,
and ended the month at 1131, albeit in the midst of a minor correction.
It was up, but you can't extrapolate the 2% gain to a prediction of 24%
for the year--it doesn't work like that.

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

 _|__     <___     __|_     _<__     _|__     ___<     12/10
 __>_     |___     __|_     _<__     _>__     ___<     12/13
 __>_     >___     __|_     __|_     __>_     ___<     12/14
 __>_     _>__     __|_     __|_     __>_     ___<     12/15
 _>__     _>__     __|_     ___|     __>_     ___<     12/16

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:  10/27/04 S&P:    1125
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

.... The problem with taglines is that you always run out of r
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