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The market struggled mightily today and finished just modestly lower,
less than a point.  Volume sank to -8% below average, but the ratio of
Up-Volume to Down-Volume was 5:7.  So over all it was still a negative
day.

I've got all this in a spreadsheet of course, on my 486.  I plug in the
numbers, then flip through the charts it draws looking for what stands
out.  Sometimes nothing does, but that's not true these days.

The most striking thing is the volume action since January 2004.  My
charts show the the daily prices and the (trailing) 30-day Moving
Average.  Superimposed is the S&P500 price line.

From January 2004 until the end of March this year the moving average
was never above 1600Ms.  That helps us get the overview, filters out the
one day in 15 months when it was just over 1900Ms, and the few days it
was below 900Ms.

In March daily volume jumped.  The Moving Average followed, climbing
steadily to nearly 2100Ms over the next two months.  The lowest it's
been since has been just a little below 1800Ms.  It's very clear that
what we're looking at is "A Tale of Two Markets."  Something's going on.

The question is "what?"  With all that buying and selling going on,
prices have been basically flat all year.  There are plenty of sellers
for all the buyers, so buyers aren't paying up for their purchases.  All
those sellers are what concerns me.  Why aren't they holding their
stock?  Even if the money was rotating into other stocks, there should
be some competition and higher prices.  (No, I don't see the climb from
mid-April to early August as anything but moving across from the bottom
of a trading range to the top of the range--nothing significant.)  I'm
thinking money is leaving the market.  Is it the "smart money"?  That
could be "Bear tracks".

Even if we can't figure out just what's going on, sometimes it good to
be alerted to the fact that SOMETHING is.  It is.

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

 ___     _|__     __>_     _<__     __<_     10/07
 __     _|__     __>_     <___     __<_     10/10
 _|__     __>_     __     |___     __<_     10/11
 __     __     <___     __<_     10/12
 __     __     <___     __<_     10/13

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

... Q:What must I do to convince you people?    Worf:Die.
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