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"Antarctic ice melts as sea warms but cause unknown"  Umm, let me think
about that, I'll get back to you.  (If I was Jay Leno I could make a
living off headlines like that.)

The wholesale or Producer Price Index was released this morning, and it
was up far more than anticipated, causing fear of inflation on the
Street.  Look, people who are ignoring the "volatile food & energy
component" in favor of the "core rate" are deluding
themselves.  Even if
the Fed discounts its immediate effect, it's going to flow through the
economy, increasing inflation.  That's going to cause the FOMC to raise
rates more than it would have otherwise.  The fact is, it ISN'T the
hurricane destruction of rigs and refineries that caused this--it's the
rampant speculation and quick trading profits that caused the price to
spike as it has.

Hey, I told you last month those guys in the oil pits speculating on
short-term profits were going to kill this market!  Nobody can strip
lots of short-term profits out of ANY market without causing large
impacts elsewhere--it's all tied together.  Remember 1998 when currency
speculators took huge profits at the direct expence of Southeast Asian
countries, which even drove our stockmarket down 20%.

Prices slid all day, closing down 90% of the way to significance.
Volume increased to 1% above average.  But don't forget that's a moving
average that's higher now than it's been in over 2 years.  Today's
volume is 140% of the 1600Ms that was the maximum all last year.

Regardless of what the exact numbers are, here's another fact: when the
market shows weakness now investors are more than willing to bail out,
volume increases.  No, it won't go on forever, but it will continue as
long as investors can be scared out of the market.  But don't go getting
all macho--it doesn't obviate the First Law of Investing: Don't lose
big!  You can't stop the slide, but you CAN get hurt by it.

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

 __     __     <___     __<_     10/12
 __     __     <___     __<_     10/13
 __|_     __>_     __     _|__     _<__     10/14
 __>_     __>_     ___     _>__     _<__     10/17
 _>__     __|_     __     >___     _<__     10/18

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:  10/04/05 S&P:    1214
Winner or Loser:  Loser                 By:     -13

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

... Network Management is like herding cats.
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