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Non-farm Payroll increase released today by the Dept of Labor was about
half expectations.  So the market was below the line except at the very
start and end, closing unchanged.  The Advance-Decline line was modestly
negative, as would be expected, but Up-Volume and Down-Volume were about
a push.  Volume as a whole closed down -13% below average.  So there was
little enthusiasm to the selling today, not bad news for the Bulls.

Most of what's released as "news" is noise.  We want to note things that
really affect the market over the long term, and employment is one of
them.  Who is employed?  Consumers!  And consumers are about 2/3 of the
economic activity in the country.  Employed, they pay income and social
security taxes.  And in this globalized world, employment hasn't caused
wage and price inflation.  Certainly one month's numbers aren't
critical, but over the long run they are.

I see something cute on my Volume chart.  It's very revealing--I don't
know how I could have missed it until now.  This is going to be in my
annual summary.  Go get your chart and follow along.

Prices peaked in early March, but average volume had geen pretty steady
since November between 1400-1600Ms.  Then prices plummeted for a week
before volume jumped to 1900Ms, then 2100-2200Ms.  That buying began to
curb the correction, so the Street stopped buying.  Volume returned to
the high teens again and the price plummet continued.  This was a
classic Flagpole & Flag formation in an inverted, upside down position.
From 1225 it dropped to 1165, 60pts.  Now in April the Flag recovered to
1191.  Then in the classic end-formation (another flagpole of roughly
equal length) it plummeted again from 1188 to 1138, another 50pts, in 9
days with volume running as much as 2700Ms, +44% above average.  Does
that sound like panic selling to you?  Does to me.  Remember my column
entitled "Stampede!"?  Volume stayed above 2000Ms until late May, when
prices recovered to 1191 (1154 to 1191 in just 5 days).  This was
"stocking-up on inventory".

At that point, having gotten some attention and given the market some
momentum, volume (selling) dried up, going from 23000Ms to less than
1400Ms in 9 days, while buyers bid up prices to get the "hot stocks".
As prices rose to the 1245 high in late July to the first of August,
volume quitely rose to the 1800-2000Ms range, distributing that
inventory into the demand this manipulation created.  And when the
excitement had run its course, buying demand quit, volume fell back to
1600-1800Ms during a 40pt correction in August.  September tried a
confused recovery, but from the end of September at 1229, it corrected
to 1177, another 52 point drop in 9 days.  Of course, in October the
mutual fund managers were cleaning out their portfolios and we kept
falling to the 1178-1179 level on volume.

Who says that the markets can't be manipulated?  This isn't just
"conspiracy theory" stuff, there's a whole branch of analysts called
"technicians" that live for this stuff.  I knew there was something
going on but I just couldn't SEE it while we were in it!  It was too
big--a story that played out over 6 months.

Is it just reading patterns in the tea-leaves?  Well, that's always a
danger.  Is the story believable?  That's up to you, but you don't have
to believe these things to observe, interpret and profit from them.

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

 __>_     __     __>_     _|__     10/31
 _>__     __     __>_     _|__     11/01
 __>_     __     ___>     _|__     11/02
 __>_     __     __>_     _|__     11/03
 __>_     __>_     __|_     _>__     __>_     _>__     11/04

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:  10/31/05 S&P:    1207
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

... Use contraceptives on every conceivable occasion
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