Subj : Market Action To : All From : Paul Rogers Date : Tue Jun 14 2005 06:38 pm Content-type: text/plain Prices didn't do much all day. There was a little flicker of a pop in mid-afternoon, but it was soon a non-event. Prices closed up a few points and volume gained a couple points, to -7% below (the rapidly decreasing "<") average. In the news was a decrease in the May Producer Price Index, i.e. raw materials, and decrease in May Consumer Spending, i.e. retail, regardless of what Best Buy did. "Same-o, same-o." Those of you who were reading my commentary in 2001-2002 should remember times when my advice was to drag out your shopping lists and buff 'em up, just in case we had a buying opportunity. (Unfortunately most of those were just Bull Traps.) You should also remember my simile to a battlefield, from time to time advising you to pop your head out of your foxhole to see what the field looks like. I advised you figuratively that when the firing finally all stopped you ought not spend your time picking over the dead, nor look to the walking wounded nor shell-shocked for allies, but concentrate on the uninjured and able-bodied. I also suggested the last 9 months of 2003 was NOT a Bull Market, but just a rebound from a terribly over-sold condition--figuratively the equivalent of having tried to hold a beach-ball underwater that inevitably pops to the surface. If you don't remember, I've got proof in all the old files. So if we've likely got a typical "summer doldrums" coming up in a single-digit year, what would I advise now, you may well ask. I think we could profitably keep an occasional but regular eye on the market so we don't get blind-sided, but concentrate on capitalizing our experiences during a historic Bull Market Bubble and Bear Market. We had experiences few investors since the Roaring Twenties and Crash of '29 have had. So, figure out what makes us want to buy, sell or trade stocks and funds--no, not what SHOULD do it, but what DOES! Then we should write each of them up as a RULE that we use. Only then should we thoughtfully consider if we can make well-advised changes to our rule-set. And that means identifying troublesome rules which we know cause us trouble, but we realistically cannot change--make adaptive changes in OTHER rules. For example, if we know we cannot rigorously apply the "7% Solution" to protect ourselves from quick losses, then we need to strengthen our buying selection rules, e.g. a) more effort in identifying realistic purchase prices, and b) not buying stocks that have already "run up". Maybe we need a rule for eliminating favorite companies from further consideration. Sun, Intel, & Microsoft are NOT going to be the growth stock of the future as they were in the past! Been there, done that, got the t-shirt. Got to find somewhere else to go now. We ought to be prepared to write most of the behavioral rules we've learned in the past decade under special headings of "Bull Markets" and "Bear Markets". This time maybe we can start collecting time-tested rules for "Normal Markets", and begin learning how to use them, rather than abstracting rules from our (self-)observed behavior after the fact. OK, technically speaking we're still in the Bear Market, until we recover and surpass the previous highs way up at 1527. Let's keep that in mind but hope that normal markets will get us there in a few years. It comes down to actually realizing, as in to make real, that the past is history, and looking forward to dealing with a different kind of market than we've experienced. Globalization is a reality, and there is no global version of the SEC! The privelege of the American market is probably no longer a reality. Double digit annual gains in the market will not be its due. Strategic investing will be more important. Look ahead! Look ahead! Look ahead! Look ahead! Look ahead! Price Vola- Momen- Volume Oscil- Summ. Change tility tum lator Index -__+ -__+ -__+ -__+ -__+ -__+ _<__ __|_ __|_ _<__ __<_ ___> 06/08 __|_ __|_ __|_ _<__ __|_ ___> 06/09 _|__ _<__ __|_ _<__ __<_ ___> 06/10 __|_ _<__ __|_ _<__ __|_ ___> 06/13 __|_ <___ __|_ _<__ __|_ ___> 06/14 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: 05/17/05 S&P: 1173 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.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 .... Blessed are the pessimists, for they made backups. ___ MultiMail/MS-DOS v0.35 --- * Origin: The Bare Bones BBS (1:105/360) .