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This morning the trade deficit number came out--another new record.
That wasn't good. China was down but energy expenditures were obviously
higher.  So until 2PM EDT the market was bouncing along about -10pts
down.  Then the detailed minutes of the Fed meeting were released,
seeming to show they aren't all that anxious to kick the rate increases
from a quarter point to a half point.  At that the market, well, sky-
rocketed, gaining about 20pts, closing up a little under half way to
being significant.  Volume increased to +11%, though with the Yahoo
charts I depend on broken I couldn't see the intraday distribution of
volume.  With just a skosh higher prices at the close it would have been
an "accumulation" day by my formula.

I wouldn't get too excited though.  That trade deficit isn't going to
make the Fed happy.  Greenspan has already testified about the
importance he puts on the twin deficits.  The half-point raises might be
on the agenda next time.  All we saw today was investor irrationality.

By the way, a clarification about my suggestion in recent commentary of
conservative strategies now.  I'm NOT talking about "Conservative",
capital "C", where you get some romantic notion about how the world
OUGHT to be and see everything as confirmation of your own notions.  I'm
talking about conservative, small "c", using tried and true principles
of diversification, asset allocation, and risk management.  I'm NOT
predicting another Bear Market ahead, though we've been hearing those
predictions for the past couple years.  I think these twin deficits are
going to be a real bear to control.  Offshoring and buying cheap
imported goods and expensive energy are not going to be turned around
any time soon.  2003 was a reaction to the previous three years of
decline, not a precursor of what is to come.  Put the "Gay 90's" out of
your mind.  Investing through the proxy of a good selection of mutual
funds wouldn't be the worst decision you could make!  Just be aware of
the effect of the rising interest rates on bond and equity-income funds.

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

 __>_     ___     __>_     __<_     04/06
 __>_     __     __>_     __<_     04/07
 _>__     __     __>_     __<_     04/08
 __|_     ___     _|__     __|_     04/11
 __|_     __     _|__     __|_     04/12

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:  04/08/05 S&P:    1181
Winner or Loser:  loser                 By:     -10

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

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