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Things weren't half bad, modestly positive, until after lunch.  Then it
all slipped away.  At the close, prices were down moderately, volume was
+5% above average--down from Friday's Quad-Witching, but still evidence,
I think, of Main Street's tax-loss selling.  Sellers were selling, and
if it wasn't panic selling, still, they weren't holding out either.

I wish the President's Oval Office speech had a different and arguably
more important topic.  A few years from now Iraq will hopefully be in
the position Afghanistan is now--requiring continued support, but no
longer our total focus.  It isn't a matter of trusting this President
with the powers of the Patriot Act and arguing how much the current
situation requires them, we have to think of ANY future President making
a similar case and being trusted with these powers--and that's asking
too much!  But the twin deficits which worry Greenspan are a long term
problem.  Bankruptcy is arguably a greater threat to the country than
terrorists.  That's what did in the Soviet Union--they bankrupted
themselves!

The Federal Deficit is the responsibility of the Administration and the
Congresscritters.  Until the next election there's little we can do to
change it.  We SHOULD anticipate how this will affect the investment
environment, i.e., long term interest rates and the comparison of
domestic vs foreign investment opportunities.  We have to prepare our
investment strategies for the inevitable.

But the Trade Deficit means, in short, we're not exporting enough to
cover our imports.  Arguably, there's some tax policy involved, but most
directly it's Wall Street and the Executive Suites who are most directly
making those decisions.  I'd have much rather heard the President
address them directly with, to borrow a phrase from Apollo 11,
"Gentlemen, what are your intentions?"  Sure, international corporations
have certain options for repartiating funds and domiciling abroad.  But
are they really prepared for the ultimate consequences of their short
term bottom line decisions, for an America in an economic condition
similar to post-WW2 Great Britain?  (ANWAR would be nothing like the
North Sea oil that bailed out Great Britain.)  I don't think either Wall
Street or the Executive Suites, even the international corporations, are
really prepared to function in an America in bankruptcy, or even in the
rest of the world without the engine the American economy has been since
the post Depression Era.  Maybe they think they'll be OK with China and
India in our place--but is that what WE WANT?  I wanted to see the
President addressing this issue.  I'm not convinced the business
community in America has thought through the ultimate consequences of
their actions.  I think Iraq will be a memory when we're still
struggling with this issue.  Or has THIS war already been lost?

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

 __|_     __     12/13
 __>_     __     12/14
 _>__          12/15
 _|__          12/16
 __     12/19

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:  10/31/05 S&P:    1207
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

... A group of leprechauns?       A leprecolony, of course!
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