Subj : Market Action
To   : All
From : Paul Rogers
Date : Tue Apr 26 2005 05:01 pm

Content-type: text/plain

Prices couldn't even get through the morning in positive territory
today, and there was nary a blip as they slid the rest of the day.
Nobody had a contrary opinion.  Volume rose, though still -2% below
average.  Down Consumer Confidence numbers were blamed, but they spoke
no more than the truth we've all known.  It sucks out there!

I want to point out one thing about using moving averages to gauge
changes in direction.  They are effective if used properly, but one must
understand their limitations.  My average volume has a 30-day, 6-week,
"window of inspection".  Back in March average volume had been between
1550-1600Ms and essentially flat since mid-February.  Then in mid-March,
as prices began their recent fall volume shot up to 2100-2200Ms--2690Ms
on April 15th.  Compared to the average of the previous 6-weeks those
days easily registered 25%, 30%, 40% higher than average.  As my window
slid along each day, more and more of the old low-volume days went out,
to be replaces by recent high-volume days.  The chart of the moving
average began to climb, representing the new reality in trading volume.
The moving average is now at 2000Ms, 125% of its old value.

The flip side of that action is when the big-money investors finish
dumping their stock, taking profits, limiting their risks, then if
trading volume returns to the region of 1400-1600Ms, which characterized
much of the previous year, the comparison to the moving average will
likewise register -25%, -30%, -40%.  That may seem extreme, but in fact
it's the moving average that's extreme, 1500Ms/day is typical.

Today's volume at 1962Ms is still heavy trading, even if it's below the
current average.  The lesson is take your primary cues from the real
numbers, not digested numbers like comparisons to moving averages.  Not
unless you have a firm grasp of the meaning in the math.

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

 <___     __>_     _|__     __>_     _>__     _<__     04/20
 ___>     __>_     _|__     __>_     __>_     _<__     04/21
 _>__     __>_     _|__     __>_     __>_     _<__     04/22
 __>_     __>_     _|__     _>__     __>_     _<__     04/25
 _>__     __>_     _|__     ____     __>_     _<__     04/26

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:  04/08/05 S&P:    1181
Winner or Loser:  loser                 By:     -10

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.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

.... Archeologist: one whose career lies in ruins.
___ MultiMail/MS-DOS v0.35

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

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