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"It's a rout."  (I've already used the word
"stampede".)  There wasn't
even any pretense today.  The ISM services sector index came out today
and it fell much more than expected, just above even.  That wasn't good,
but the worst was the "prices paid", i.e. costs of services, which
jumped up to 81.  There's only one word for that: inflation.  That makes
it clear what the FOMC is going to do.  So at the close the price change
was around -140% of significance, and volume jumped again to +23% above
average.  No question, that's a "Distribution" day.  The Advance:Decline
ratio was less than 1:4, so it was a broad-based sell-off, a rout.

There's also no question about my 1214 line being Support, that ends
today.  We're also below the 200-day Moving Average.  Sometimes that
brings out the bargain hunters, other times it's just Bearish.

If much of this selling was already earmarked, as I suspect, the fund
managers aren't above piling on, selling more just for protection and
even selling short to drive prices down even more.  Sure, they'll
accumulate a lot of cash doing that, which they'll have to employ sooner
or later, but they won't mind picking up what they intended to buy at
lower prices still.  If I had access to the data the Street analysts do,
I'd see that in higher short-selling numbers, and what's called "sector
rotation" as the mutual fund managers buy what they're expecting to make
money with in the next year.

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

 __>_     __     _>__     __<_     09/29
 __>_     __     __>_     __<_     09/30
 _>__     _|__     __|_     __>_     __>_     __<_     10/03
 _|__     _|__     _|__     __>_     _>__     __<_     10/04
 __     _|__     ___>     _<__     __<_     10/05

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

... 90% of the time I'm right, why worry about the other 3%?
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