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The Institute for Supply Management released more data on manufacturing
today.  The bottom line was manufacturing dropped more than expected to
51.4, where 50 is the line between expansion and contraction.  Bad news,
right?  Well, no.  The market jumped 10pts in the first hour or so, then
added another 5, where it more or less flattened out.  The Street was
doing another of it's perverse "bad news is good news" analyses.  They
saw that the portion which reflected prices paid for materials was
nearly flat, implying no inflation, implying the FOMC might not keep
hiking interest rates.  The President of the Dallas Federal Reserve Bank
said as much.  Still, oil went about $54/bbl, and there was afternoon
profit taking.

The market closed up about 10pts, but, wait for it, volume slowed to -7%
below average, lower over 100Ms from yesterday.  Bull markets require
enthusiastic buyers, and they just aren't to be seen.  So over all, it
was one of those days when we were happy to see some green numbers in
our portfolio, but didn't get excited that the Bull is back.

One could well believe this, and some other recent action, shows the
Street is trying to make something out of not much, that they're itching
to move this market higher.  That is the sort of thing I look for.  But
they could as well be out-foxing themselves.  Their rationales are
tenuous.  The cause and effect relationships they envision have more
than one step and all of them have to work right.  I prefer the simpler
approach.  The data we've seen that the economy is growing very slowly,
that employment and wages are concerning consumers, is NOT good news as
I see it.  But I'm not taking a dogmatic stand on it.  I'm watching the
market numbers.  Market movements aren't a matter of opinion.  What they
mean, how long it's going to go on, THOSE are opinions.  Whether my line
at 1214 means anything is even a matter of conjecture.  But the closing
price on Jan 3rd was 1202, the closing price today was 1202--and we
thought this was a good day.  Those are facts.  Seems to me anybody
claiming the economy is fine, the stock market is nothing to worry
about, is blowing smoke.  In my opinion.  ;-)

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

 _|__     __>_     __|_     __     05/25
 __|_     __>_     __|_     __     05/26
 __|_     __|_     __>_     _     05/27
 _|__     __|_     __>_     __     05/31
 __|_     __|_     __>_     _     __>_     06/01

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:  05/17/05 S&P:    1173
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

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