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The market gapped down at the open, that is trading began at lower
levels than yesterday's closing prices, reputedly in response to Alcoa,
the first of the DJIA to report on Q4, missing expectations.  Prices
oscillated thereafter with a modest upward bias, and all the major
indices finished flat.  Volume increased a bit to +14% above average.

Well, they might not have been thrilled by Alocoa's report, but I don't
think that was the "cause".  I think this year's trading was mostly a
"put-up job", trying to paint a much more optimistic picture of the
market than is really warranted.  After they made the first 5 days look
good for the "January Barometer", their job was done and they couldn't
hold it together any longer.  In other words, the market was "over-
bought".

If you look at my "Tracking the Market" page on my website you'll see
nearly up to date charts I'm looking at.  I've got a "rising bottoms"
line pencilled in stretching back to October 2003, now at 1200, and a
horizontal former "resistance level", now turned "support
level" around
1250.  The 50-day, 10-week, S&P moving average is also around 1250.  The
good news is we're currently above all of those, in "Bullish" territory.
So it wouldn't surprize anyone if prices pulled back to 1250.  That
wouldn't violate any trends.  And a pullback to 1200 would be about
20pts below the 200-day moving average now--a Bearish sign, but less so
than October, and about like last April.  We recovered from both.

A buyer here could have a quick 4% loss, just on normal market
fluctuations, and that's half the cushion of "the 7% Solution".  That's
Main Street's classic mistake, they buy after the market has run-up and
soon find themselves underwater.  At 1200 they'd have to be out of it,
because it wouldn't have to stop at 1200.  Yes, the Fed has "reloaded
its gun" so to speak by raising rates, so it could respond again if the
Bear again prowled the Street.  I don't know if that's likely, but
neither would I say it's unlikely.  I'm not watching where I step for
Bull patties either.  There are real issues out there.  I'm still
playing my cards conservatively.
                                
 Price    Vola-    Momen-   Volume   Oscil-   Summ.
 Change   tility   tum               lator    Index
 -__+     -__+     -__+     -__+     -__+     -__+

 __>_     >___     __|_     ____     ___|     01/04
 __>_     >___     __|_     ___|     __>_     ___|     01/05
 __>_     _>__     __|_     __>_     ___>     ___|     01/06
 __>_     _>__     __|_     __>_     ___>     ___>     01/09
 _>__     _>__     __|_     __>_     ___>     ___>     01/10

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:  01/03/06 S&P:    1269
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

... Did you expect to find words of wisdom here?
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