Subj : Market Action
To   : All
From : Paul Rogers
Date : Tue Feb 08 2005 06:24 pm

Content-type: text/plain

Prices weren't much changed all day.  It was one of those days when you
had to ignore what the chart APPEARED to show, and look at the scale.
The scale of significance for price change is 13.4pts, with volatility
at these levels.  So when the range of the chart is only a half-dozen
points, then comparatively it doesn't mean much.  Sometimes getting a
5-day chart helps put it into perspective.

Volume increased a bit to -4% below average, so there was still little
reaction.

According to some "news" reports the market was waiting for Cisco's
earnings report, seen as a bellwether (look it up) for the technology
sector.  Cisco's earnings were twice last year's, though on lower sales,
and failed to beat expectations, coming in a penny under.  So in after-
hours trading they took the price down -1.6%.  I wouldn't want to be
holding positions in tech at the open tomorrow.

Now, of course, we shouldn't argue with the market, but this is one of
those examples where the market reacts irrationally.  It's not that a
penny missed in earnings is commensurate with the price drop, but also
that prices were that high to begin with.  Both are irrational.  I think
the lesson here is that we remember prices are often poor reflections of
the stocks' true value.  When things appear to be good for the company
and its stock, they're "priced for perfection" and buying them then is
very risky.  And conversely, when the company and stock is unloved and
punished on the Street, that is likewise overdone.  And that's why
"dumpster diver", Value Funds can be very good investments.

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

 __>_     _<__     __|_     __|_     __>_     ___|     02/02
 _>__     _<__     __|_     __|_     __>_     ___|     02/03
 __>_     _>__     __|_     __>_     ___>     ___>     02/04
 _>__     _>__     __|_     _>__     __|_     ___>     02/07
 __>_     _>__     __|_     _>__     __|_     ___>     02/08

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

.... SHIN, n. a body part used to find furniture in the dark.
___ MultiMail/MS-DOS v0.35

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 * Origin: The Bare Bones BBS (1:105/360)

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