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Prices submarined along a little underwater until around 1PM, while
Greenspan gave his testimony.  After that there was a Q&A period.  Now,
if the major Street Houses didn't have a wire into the witness room,
they at least had someone inside with a text-messaging cell phone.  They
know what Greenspan has said, what the FOMC minutes have said, and what
the Fed-watched numbers have been doing since the last meeting.  There
was only one real question:  Did he have anything new and exciting to
say?  That could be answered with one word: yes or no.  One letter: T or
F.  One bit: 0 or 1!

So when he finished his testimony, and it was all as expected, the word
got out and prices surfaced and climbed to a modest gain at the close.
Volume was nearly the same as yesterday, still +10% above average.

Don't believe any, er, junk you read or hear about earnings, GM, IBM, or
anything else.  Greenspan was the only important news.  One of the
Congresscritters wants to pass a law to grant Greenspan another 5-year
term.  That's OK with me--but apparently not with his wife.  I'm sorry
if you disagree, but given the President's stated opinion about the
current state of the economy, and the people he's got on his team
(Snow's major qualification seems to be the ability to agree with the
Administration's line with a straight face), I'm not sure which could do
more damage--his appointment for Chief Justice or the Fed chief.

There are laissez-faire, libertarian advocates on the right-wing who are
adamantly opposed to "federal intervention".  Remember stagflation, 20%
interest rates in the early 80's?  I do.  I remember 6'8" Paul Volker
sprawled on a normal sized chair lecturing the Congresscritters, "You
may not know how to do your job, but I assure you I know how to do
mine."  He jacked the rates up and broke us all of expectations that
inflation would go on forever uncontrolled.  Greenspan has also been an
inflation hawk.  But if he hadn't dropped rates to virtual non-existance
a few years ago, the popping of the 2000 Bubble would have been like 1929,
and the following recession would have been a depression.  Things aren't
all good in the economy, but the fact that we don't have bread-lines
again is precisely because of the Fed's active intervention independent
of political administrations.

We need a Fed Chief that knows what to do, isn't afraid to do it, and
does it on time--because the economy requires it, regardless of what the
politicians want.  Engineers understand the destructive oscillations
which can happen when actions and reactions are "out of phase".

Pray for another Fed Chief like Greenspan!

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

 __>_     _>__     __|_     __>_     __|_     ___>     07/14
 __|_     _>__     __|_     _>__     __     07/15
 ___     __|_     _|__     __     07/18
 __|_     __>_     __|_     __>_     __     07/19
 __|_     __>_     __|_     __>_     __|_     ___>     07/20

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:  07/01/05 S&P:    1194
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

... Teachers don't like thinkers--they ask too many questions
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