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After yesterday's close Intel released positive projections so the
market opened on a up note, but it quickly reversed--data on the
nation's current account, i.e. exports minus imports, was the second
worst on record.  That didn't sit well, so the market fell all day.
Prices closed down 70% of what would be significant, and that was enough
for my timing signal to pop a SELL signal.  Look (below) how negative
the Oscillator has become.  If there was any good news it was that
volume also fell -8% below average

What I don't understand is how the Street in particular, and the
corporate community in general, could have ever assumed they could move
all the jobs offshore and not CAUSE all these trade deficits!

But I want to return to this Sell signal, and "failed" rallies.  I don't
understand this year's action, in the long term view.  The Street
anticipates the market 6-9 months in the future, so the favorable
economic factors we're hearing about now were anticipated and priced
into the market last fall--and that's when these higher prices started.
The current economic reports NOT justification for wading into the
market NOW!  I rather suspect something of the following nature has been
going on.

Of course nobody can predict the future.  Nevertheless, objective
observers can often identify certain general trends.  Absent some
drastic, unpredictable catastrophe, the Fed clearly intends to raise
short-term rates "at a measured pace", i.e. over the next year or so.
The Federal deficit isn't going to magically disappear, and the Treasury
will be the 800lb gorilla sucking funds from the bond markets, driving
long-term rates up too.  These aren't beneficial for businesses which
will have to pay more for their borrowings, and with the trade deficit,
one has to be Pollyanna to believe the stock market is going to create
"easy money" for at least the next year or two.  I'm not the only one
who has noted this.

Would you want to be "holding the bag" if the market is going to be
having a difficult couple years?  Neither do the professional investors
on the Street!  The problem they have is they hold the biggest blocks of
stock.  How are they going to lighten-up?  They need to get Main Street
to buy their stocks from them.  There are some perfectly legal ways the
Street can manipulate the market!  One way is: by restricting the supply
they can cause prices to rise.  They've got other tricks up their
sleeve.  Then they go to the media and point to the rising market
prices, suggesting there's a great Bull Market beginning.  Then they
feed the stock they want to unload into the market slowly.  If they've
done the job well, the "manufactured" rally will feed on itself and pull
in more Main Street investors.  By, for example, feeding an excess
supply into the market they can shut it off too.

So, while we must never "argue with the tape", we need to be intelligent
investors.  We need to pay attention to the daily market, but also to
the over-all investing environment.  We need to learn "when to pick our
fights" and when to stand aside.  Sometimes we'll be wrong, and we need
to know how to handle that too.  I'm pessimistic, but I wouldn't  want
to abandon my position and buy, just when I'm proven right and the
market tanks!

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

 __>_     _>__     __|_     _|__     __>_     ___|     03/07
 _>__     _>__     __|_     _|__     _>__     ___|     03/08
 _|__     _>__     __|_     __|_     _<__     ___|     03/09
 ____     __|_     __|_     _<__     ___|     03/10
 _<__     _|__     _|__     _|__     <___     ___|     03/11

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:  03/11/05 S&P:    1200
Winner or Loser:  even                  By:     0

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.angelfire.com/or/paulrogers/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

... If we agree on everything, one of us isn't thinking.
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