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"Stocks Drop As Oil Tops $65 a Barrel."  How then can we draw a straight
line through the intraday prices declining all the way back to last
Wednesday.  Now, to be sure, oil has been creeping higher recently--it
didn't get to $65 just today--but that's a strong inferrence today's
decline is much more than just the one day reaction the headlines would
have you believe.  Yes, this is a three-month high, but why then did
stock prices seem to ignore oil prices after the first?  Stock prices
today are HIGHER than they were three months ago.

Stocks "gapped lower" at the open.  By the time trading got started, as
opposed to the opening "asked" prices, prices were about 5pts lower, but
they held there in a narrow trading range all day.  There was no
observable change around 2EST when the oil pits closed--more evidence
oil wasn't the determining factor.  Volume was down a skosh, but still
+3% above average.

So, although we know energy prices are important to the economy and one
day it will once again be cheaper to produce goods and services locally
than ship them half-way around the world, once again there's little
correlation between what is being reported to us and observable facts.

I've seen a few articles recently cautioning against the euphoria being
reported to us about what the stock market will do once the FOMC says,
"we're done."  I've already said as much here.  They reinforce forgotten
facts that the Fed watches far more than just whether short term
monetary policy is "neutral".

It may be there is some pent-up demand to move prices higher.  I'm
watching a modestly rising "support line"--84 points below current
levels.  But with the flight of American manufacturing and the twin
deficits, this economy is NOT in as good shape as some would have you
believe.  My IRA is 28% in international funds and probably going higher
before it goes lower.

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

 _>__     _>__     __|_     __>_     ___>     ___>     01/10
 __>_     __>_     __|_     __>_     ___|     ___>     01/11
 _|__     __>_     __|_     __>_     __     01/12
 ___     __|_     __>_     __     01/13
 __     __|_     __|_     __     01/17

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:  01/03/06 S&P:    1269
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

... Fortunately, I had a backup dated 1/1/80
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