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"Prices rose in the last hour to post the second straight day of gains,
after two weeks of falling prices."  Oooooh.  Cough, cough.  The S&P was
up about 3.5pts, when it would take 13pts to be significant, and that
was about the limit of the trading range.  OK, let's suppose we grant
them their "Any port in a storm" outlook.  "Did ya' mean
it?"  Volume
was down -6% below average.  Guess not.  When sellers constrict the
supply they can drive prices up, by the old Law of Supply and Demand (if
there IS any demand).  Then they can sell.  The heaviest volume of the
day was in the last few minutes.

There's a second trend in my charts.  The Oscillator measures momentum
of the Advance-Decline line of all NYSE stocks.  The Oscillator hit its
most recent highs back at the end of May or first of June, since then
it's been a sequence of lower highs and lower lows.  That put a drag on
the Summation Index's climb, which peaked in July, and is now negative.
The Summation Index's peak was not quite coincidentally the peak in S&P
prices, though the S&P didn't give way until September.

The S&P500 do more than represent the "market"--they are the
majority of
the market--80% if memory serves.  When the majority of NYSE stocks are
falling, for a while investors can and do crowd into the few that seem
to be holding up, but it can't continue.  When the Oscillator is up
advancers are leading decliners, the base of the market pyramid is
broad, and stable.  When most stocks are declining, the number advancing
is getting smaller and smaller--the base of that pyramid is getting
narrower and narrower, unstable, and susceptible to toppling.

What we all want to know is how much longer this can continue.  I dunno.
I won't believe it until I see it, and even then I'll want to be sure
it's not just a "head fake".  But the Summation Index is about as
negative as it has been over the past couple years.  That doesn't mean
much, so don't get anxious.

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

 _|__     __>_     __     |___     __<_     10/11
 __     __     <___     __<_     10/12
 __     __     <___     __<_     10/13
 __|_     __>_     __     _|__     _<__     10/14
 __>_     __>_     ___     _>__     _<__     10/17

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: 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

... Klein bottle for rent. Inquire within.
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