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Prices rose for the first couple hours, with some modestly enthusiactic
buying for the first hour.  But then the enthusiasm vanished and it was
downhill from there, with the heaviest volume of the day at the lows
just before the close.  The market lost 6pts; twice that and a bit would
have been significant.  Volume increased to +8% above average.  How much
more do we need to see, to understand that investors aren't happy?

On the subject of learning to be a better investor, get out of the habit
of "Either/Or" thinking; something must be one thing or its opposite.
Everything is in crisp, sharp, black and white distinctions.  Either
you're willing to hold your position tightly, or sell it.  The Street
doesn't think that way.  The Street would think that if the position has
a 50-50 change of rolling over, sell half.

Understand that my 7% Solution, (If a position drops 7% below your
purchase price, accept you made a mistake and get out to preserve the
other 93% of your capital.  If it's a new position, your timing was off.
If it's an old position and it's just hitting a 7% loss, either that dog
wouldn't hunt and your selection was wrong, or you didn't realize when
it was time to take the profit you had.), is just a tactic to comply
with Buffet's First Law of Investing: Don't lose money!  If you have
another discipline to accomplish the goal that works, use it!  DO NOT
hold and hope!

I have never recommended simultaneously taking a position and posting a
7% Stop Loss order!  That just follows the price, and you know I don't
do that.  I'd take a position and figure out where my -7% level is, but
you know I use the volume action to confirm or deny the price action.
If I saw my stock beginning to fall on very heavy volume, I might bail
at -5%.  And conversely, if it hit my target on consistently less than
average volume I'd probably give it a little more wiggle room.

But money is money, and even if it was very low volume by -10% I'd take
my responsibility, admit the mistake, and make sure I only lost ONCE in
the transaction.  If my loss was tuition in the School of Hard Knocks,
that can be capitalized.  But to lose money and NOT learn by it, is
losing twice in the same transaction!  I _did_ make a mistake, the
evidence is right there in my trade confirmation.  So I'd continue to
watch the stock for a while, see what happens and what that can tell me.
Was my timing off?  Was the stock just too volatile?  Did I buy when the
price was too far from an obvious base or support level that the stock
returned to?  I'd figure out what I did wrong.  And I'd still have 90%
or more of my principle to ante-up for the next deal.

Emotion doesn't belong in our investing, and loyalty, stubbornness,
greed, pride, & fear are all emotions that will cost us money!  We need
to develop tried and true tactics and strategies that we can rely on
when our emotions want to dictate our action.

The market is a fluid thing.  It's always changing.  This isn't 1999 and
it's not 2001.  We need to recognize which is which, when the market has
changed and when the Street is just blowing smoke (and we saw a lot of
that in 1999!).  Neither flexibility nor reliance on the "tried and
true", that one thing or the other again, are the answer.  But there are
lots of ways in between.  When it seems like there are only two choices,
when advisors are telling you there are only two choices, that's wrong.
Look for the third choice.  It's there.

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

 |___     __|_     _|__     __>_     _|__     _<__     10/20
 __|_     __>_     _|__     __>_     _>__     _<__     10/21
 ___>     __|_     _|__     _>__     _>__     _<__     10/24
 _>__     __|_     _|__     __>_     __>_     _<__     10/25
 _>__     ___     _>__     _<__     10/26

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

... "No maintenance" means impossible to fix
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