Subj : Market Action
To   : All
From : Paul Rogers
Date : Wed Feb 02 2005 06:22 pm

Content-type: text/plain

Surpsize!  The Fed raised rates again today.  OK, I'm being facetious,
because everybody expected them to do it.  "Measured pace," remember?
But the market didn't seem to know what it really meant or what to do
about it.  There was the normal bobble just as the news hit the Street,
but all afternoon the market was volatile because they couldn't make up
their minds.  These guys are professionals, remember.  We oughtn't feel
so bad when we don't know what to do with the market.

At the close, prices were up quite modestly and volume sank to +12%
above average.

This is NOT a prediction, but if the market spends say another week
dithering around this 1185-1190 level, there are technical analysts who
are going to see an "inverted head & shoulders" formation, convince
themselves that the resolution will be a sudden bounce up to 1215 or so,
and their buying for the quick profit just might make it happen.  But
then it might not.

These guys really aren't so smart.  Suppose one believed they were, and
every year followed the selections of the previous year's most
successful financial newsletter writers.  If one got them in the year of
their great success, returns would be phenomenal.  But following them
the subsequent year would have netted one average returns of -32%, year
after year since the 80's.  Buying the Index 500 fund has averaged about
+11% since the 20's.

The thing is, the winning newsletters are chosen AFTER THE FACT.  Throw
a handful of darts at the paper's listings a few dozen times.  Buy those
stocks for each of the portfolios.  At the end of the year one of those
will have the best results.  If one does it again for the new year, as
the newsletter writers come out with their best picks for the new year,
taken as a group it amounts to the same thing.

There are some ideas in investing that seem so intuitively reasonable
that are just plain wrong.  See the examples I present of Dollar Cost
Averaging on my website (URL's below).

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

 __>_     _|__     _<__     __|_     _>__     ___|     01/27
 _>__     _<__     _<__     __>_     _>__     ___|     01/28
 __>_     _<__     _|__     ___|     __>_     ___|     01/31
 __>_     _<__     __|_     __|_     __>_     ___|     02/01
 __>_     _<__     __|_     __|_     __>_     ___|     02/02

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:  02/01/05 S&P:    1189
Winner or Loser:  tbd                   By:     tbd

See my market tracking charts for '03-'04 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

.... Canadian DOS prompt  EH?\>
___ MultiMail/MS-DOS v0.35

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