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Something to think about:  The defense in the Skilling-Lay trial
contended that the downfall of Enron was due to the media.  If your
company is based on real assets, an aspect of the so-called "Price to
Book Value" ratio, how does media coverage destroy its value?  Once upon
a time companies that didn't have real assets backing them up were
called "Blue Sky" companies.  To be sure, Enron was the quintessential
"Gay 90's" bubble stock, but what's in your portfolio?

Something else:  Over the past couple weeks, as stock prices were in
free-fall, there were many stories about investors running to
treasuries.  Excuse me?  Everybody is certain there's at least one more
rate increase, and the correction is premised on the fear that there may
be more.  When rates rise, fixed-income investments lose principal,
guaranteed--you have to drop the price to give the purchaser the same
rate he can get from current paper.  Why were they doing that?  There's
got to be another way of stepping out of the line of fire!

Now in today's trading, well, it's a 3-day weekend.  One might have
expected traders to sell and protect themselves in cash, but that didn't
happen.  Prices gained moderately, but traders were sneaking off of the
floor.  Volume fell to -24% below average.  I always warn, such low
volume can cause exaggerated volatility if orders become unbalanced.  I
think we have to discount part of the price change as an effect of light
trading.

We also need to stay a bit conservative about the market.  There are a
lot of traders who really want to see prices recover.  That's not good
enough.  Sure they can push prices up for a while, but without a real
footing inder them, they'll get their comeuppance.  That's why we get
"Double Bottoms".  We need to be thinking strategically.  Discount the
daily action, but look for things that will move the market in the long
run.  And don't stretch to find them!

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

 _     _|__     __>_     |___     __<_     05/22
 _|__     ___>     __     |___     __<_     05/23
 __|_     ___>     _     |___     __<_     05/24
 ___>     ___>     ___     _>__     __<_     05/25
 __>_     ___>     ____     __>_     __<_     05/26

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:  05/12/06 S&P:    1291
Winner or Loser:  Loser                 By:     -16

See my market tracking charts for '04-'05 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{at}yahoo.com                       -o)
http://www.angelfire.com/or/paulrogers                   /\\
Rogers' Second Law: Everything you do communicates.     _\_V

... The cat is, above all things, a dramatist.
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