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"Insanity is doing the same thing over and over again, expecting a
different result this time."

The market gapped up after opening and mostly stayed between up +5 and
+10pts all day.  It closed up moderately, +9pts, but it takes +12 to be
signifcant currently.  Except for one niggling little fact I'd have said
"buyers were in charge all day", volume was up +31% above average.  The
thing is, according to the intraday chart I saw there was a huge amount
of trading in the last 5 minutes, when the Street is usually squaring
its positions for the day.  My formula doesn't know what to make of that
either, but it calls more then 10% above average volume when prices are
pushed more than half-way to a significant change an "Accumulation" day.
And needless to say, my timing signal switched sides again.  Yeah, yeah.

Does this seem sane to you?

The Street employs analysts to do it's own "independent" analysis of
corporations trading stock on the exchanges, primarily of their earnings
this quarter and their prospects.  They have access to the CEO's and
corporate officers, high-powered computing, and accounting
professionals.  And they have access to other corporations in the same
business.  There's not just one of them, all the major brokers and
investment firms have them, looking at the same group of companies, and
there are other companies involved in compiling the "consensus."

Now, the corporations know what they've told these analysts, remember
that.  But quarter after quarter, year after year, the consensus of
these analysts often misses the mark, wildly.  When corporations exceed
earnings consensus, and the "whisper numbers", then their stock price
jumps higher.

- How did they get it so wrong?  Nobody ever seems to notice!

- Do we ever hear an apology or a self-criticism and post-analysis of
what their mistake was?

Usually, when the analysts release their results and the consensus
becomes available, prices immediately reflect those expectations.  "From
your lips to God's ears."  It's as though the Street has never heard the
aphorism, "there's many a slip twixt the cup and the lip."

- In what other part of your life do you pretend that expectations have
already come true?

If an earnings report doesn't exceed the "whisper numbers", not to
mention analysts' consensus, even if it's exactly what the corporation
announced, the price is often "punished".  The corporation told everyone
what to expect!

- Who's responsible if the analyst's estimate corporate earnings is too
high?

- So who is responsible for expectations, for the "whisper numbers"?

Remember that the corporations know what they've told analysts?  It has
not escaped notice that many large corporations consistently report
earnings that exceed consensus by a penny, time after time.  Some names
have been Cisco, Microsoft, Intel, et al.

- Who's fooling who?

- Why should anybody believe what the corporations are announcing?

This is crazy!  Analysts can't do their job and nobody ever notices.
Everybody pretends what they say has already happened.  On no apparent
justification they even expect more than the analysis shows.  If the
analysts over estimate earnings, instead of the analysts being punished
it's the corporations, or more correctly its stockholders, who are
punished.   Some information is being withheld from the analysts which
enables the corporation to make itself look good, or at least cover for
over-estimations and expectations.

If that's crazy, what do you call playing this game?  Eh?

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

      01/20
 ___     _|__     ___|     01/23
 __     __|_     ___|     01/24
 _     __|_     ___|     01/25
 __>_     __|_     __|_     ___>     __>_     ___|     01/26

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: BUY        Date:  01/26/06 S&P:    1274
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{at}yahoo.com                       -o)
http://www.angelfire.com/or/paulrogers                   /\\
Rogers' Second Law: Everything you do communicates.     _\_V

... I never used to be able to finish anything but now
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