Subj : Market Action
To   : All
From : Paul Rogers
Date : Mon Aug 29 2005 07:04 pm

Content-type: text/plain

With Katrina coming ashore and overnight oil futures hitting $70.80/bbl,
the market began the day underwater.  But by mid-morning, when it seemed
Katrina wasn't quite as severe as feared, it surfaced.  Then it hugged
the line until mid-afternoon, and finally, as oil closed up but well off
its highs, prices rallied some.  Prices closed up more than half-way to
being significant, but volume remained low, -15% below average.

Now, the oil pits reacted too quickly to the danger of Katrina, and took
relief too quickly.  It will take a while to assess the condition of the
rigs and the undersea piping ashore.  There could be more shocks.

This weekend Greenspan suggested we are under considerable threat from
the popping of the real-estate bubble.  And that means all of us.  I
agree.  Re-fi's have been enriching the public and they've been spending
it, but the interest-only and ARM loans are going to put the squeeze to
them, and consumers drive 2/3 of the economy.  That's going to percolate
through the whole economy.  It's going to be especially shocking when
all the housing buyers who expected to flip their properties in a couple
years as a way of getting out from under dangerous loans, find they
can't find buyers.  Buy high, sell higher on the "Greater Fool" Theory?
That sounds like the recent stock market bubble.

There are a lot of chickens out there, many of whom are going to come
home to roost--as listed recently.  A new one is hyper-inflation and
strongly increasing interest rates like we saw following the Vietnam
War.  I still believe we need to begin studying what steps we can take
to protect ourselves if things go south, and begin making plans.  If an
ideolog rather than a pragmatist is appointed as the new Fed Chairman,
then I'd begin going in that direction.  But the President isn't known
for appointing nonideological pragmatists.

There are those who claim Greenspan hasn't reacted quick enough to both
raise and lower rates, consequently has made the economy worse than it
would have been.  Really?  That's personal opinion, if not ideology.
Where's the proof?  A controlled experiment can't be done.  The physics
and mathematics of damped oscillations and feedback loops are especially
relevant here, but the critics are more interested in politics than
mathematics.

I still think we need to understand and use conservative investment
strategies, including more diversification.

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

 _|__     _>__     _|__     _<__     _>__     ___<     08/23
 _|__     _>__     _|__     __<_     _>__     ___<     08/24
 __<_     _>__     _|__     _<__     _|__     ___<     08/25
 _<__     _>__     _|__     _<__     _|__     ___<     08/26
 __|_     _>__     _|__     _<__     _|__     __<_     08/29

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:  08/16/05 S&P:    1219
Winner or Loser:  Winner                By:     +25

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

.... Why is Brassiere singluar and Panties plural???
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 * Origin: The Bare Bones BBS (1:105/360)

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