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Better than expected GDP numbers were released this morning.  Prices did
a complete turn-around (and then some) grinding higher all day.  The
price change was about 150% of significance.  All together now, "Did ya
mean it?"  Volume was virtually identical to yesterday, still just +5%
above average.  Soooo, well, I'd say, "Not really."  The downward trend
is still intact, though if the Bulls can find some "follow-through" we
might get a reprieve.

Seems to me the Street is forgetting what better than expected economic
numbers have always meant to them before:  it makes the FOMC more likely
to at least continue raising rates, if not accelerate them.  I'm not at
all sure the GDP numbers are entirely good news from the Street's
perspective.  That's a shoe yet to drop.

If a very significant part of the price of stocks that are getting all
the positive attention, that we hear about on the evening news, is just
a premium that amounts to "whatever the market will bear", it's times
like this when prices are falling when we need to be watching to see
what the basic values are.  When a stock is really cheap, when that
premium is as low as it will go--even negative, smart investors will buy
it.  And that is virtually the definition of a "bottom" in the price of
a stock.

The problem is, we don't know where that is, until prices turn around.
That's why the Street has the, "Don't try to catch a falling knife",
aphorism.

We also have to be careful that whatever is driving the price of a stock
down is only temporary--that's it's not on its way to "down and out."
Wanna buy some "Boston Chicken"?

This is what "Value Investors" do.  Now maybe you aren't a value
investor.  Maybe you're more of a "Momentum Player".  Still you ought to
be paying attention to where these fundamental values are, even if it's
not yet time for you to be "buying high and selling higher".

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

 ___>     __|_     _|__     _>__     _>__     _<__     10/24
 _>__     __|_     _|__     __>_     __>_     _<__     10/25
 _>__     ___     _>__     _<__     10/26
 _|__     ___     _|__     _<__     10/27
 ____     __<_     _<__     10/28

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

... Pay no attention to the man behind the curtain
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