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Prices didn't do much all day.  There was a little flicker of a pop in
mid-afternoon, but it was soon a non-event.  Prices closed up a few
points and volume gained a couple points, to -7% below (the rapidly
decreasing "<") average.  In the news was a decrease in the May Producer
Price Index, i.e. raw materials, and decrease in May Consumer Spending,
i.e. retail, regardless of what Best Buy did.  "Same-o, same-o."

Those of you who were reading my commentary in 2001-2002 should remember
times when my advice was to drag out your shopping lists and buff 'em
up, just in case we had a buying opportunity.  (Unfortunately most of
those were just Bull Traps.)  You should also remember my simile to a
battlefield, from time to time advising you to pop your head out of your
foxhole to see what the field looks like.  I advised you figuratively
that when the firing finally all stopped you ought not spend your time
picking over the dead, nor look to the walking wounded nor shell-shocked
for allies, but concentrate on the uninjured and able-bodied.  I also
suggested the last 9 months of 2003 was NOT a Bull Market, but just a
rebound from a terribly over-sold condition--figuratively the equivalent
of having tried to hold a beach-ball underwater that inevitably pops to
the surface.  If you don't remember, I've got proof in all the old
files.

So if we've likely got a typical "summer doldrums" coming up in a
single-digit year, what would I advise now, you may well ask.

I think we could profitably keep an occasional but regular eye on the
market so we don't get blind-sided, but concentrate on capitalizing our
experiences during a historic Bull Market Bubble and Bear Market.  We
had experiences few investors since the Roaring Twenties and Crash of
'29 have had.

So, figure out what makes us want to buy, sell or trade stocks and
funds--no, not what SHOULD do it, but what DOES!  Then we should write
each of them up as a RULE that we use.  Only then should we thoughtfully
consider if we can make well-advised changes to our rule-set.  And that
means identifying troublesome rules which we know cause us trouble, but
we realistically cannot change--make adaptive changes in OTHER rules.

For example, if we know we cannot rigorously apply the "7% Solution" to
protect ourselves from quick losses, then we need to strengthen our
buying selection rules, e.g. a) more effort in identifying realistic
purchase prices, and b) not buying stocks that have already "run up".

Maybe we need a rule for eliminating favorite companies from further
consideration.  Sun, Intel, & Microsoft are NOT going to be the growth
stock of the future as they were in the past!  Been there, done that,
got the t-shirt.  Got to find somewhere else to go now.

We ought to be prepared to write most of the behavioral rules we've
learned in the past decade under special headings of "Bull Markets" and
"Bear Markets".  This time maybe we can start collecting time-tested
rules for "Normal Markets", and begin learning how to use them, rather
than abstracting rules from our (self-)observed behavior after the fact.
OK, technically speaking we're still in the Bear Market, until we
recover and surpass the previous highs way up at 1527.  Let's keep that
in mind but hope that normal markets will get us there in a few years.

It comes down to actually realizing, as in to make real, that the past
is history, and looking forward to dealing with a different kind of
market than we've experienced.  Globalization is a reality, and there is
no global version of the SEC!  The privelege of the American market is
probably no longer a reality.  Double digit annual gains in the market
will not be its due.  Strategic investing will be more important.

Look ahead!

Look ahead!

Look ahead!

Look ahead!

Look ahead!

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

 _     06/08
 __|_     __|_     __|_     _     06/09
 _|__     _     06/10
 __|_     _     06/13
 __|_          06/14

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

... Blessed are the pessimists, for they made backups.
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