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Last year the conventional wisdom was that the Street wanted Bush, so
why weren't they ecstatic today at the inauguration?  The market was
below the line again all day today.  I thought yesterday should have
been considered a distribution day.  Today prices sank -70% of the way
to being significant just on the basis of the price drop, on much
heavier volume, +18% above average.  That's what I call a "Distribution"
day.  Sellers were willing to take lower prices, but they wanted to SELL
anyway.

Prices are now below the 50-day Moving Average.  It's the "first line of
defense".  When prices have been above the moving average and investors
think conditions are "Bullish" the area of the 50-day Moving Average is
often considered to be a "bargain level" in an overall Bullish market.
That buying tends to keep prices bouncing along just above the line.
But if there isn't enough, falling below is considered to be negative.
The 200-day Moving Average is the "second line of defense".  Falling
below that is very negative. That's 50pts down, around 1134.  I'd like
to see evidence of support at the 1160 level.  Between here and there I
don't see any "technical" support.

Places which were "support" when prices were above usually become
"resistance" when prices are below and try to rise.  It's as if it
presents the question, "Are we REALLY sure things are ready for a Bull
Market?"

In case you missed my announcement, my "Tracking the Market" page has
been updated.  Pick one of the URL's below.

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

 ___     _|__     __>_     _|__     ___<     01/13
 ____     _|__     ___     ___<     01/14
 __|_     _|__     __|_     __|_     _|__     ___|     01/18
 _|__     _|__     _|__     __|_     _|__     ___|     01/19
 _|__     _|__     _|__     __|_     _|__     ___|     01/20

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: SELL       Date:  01/19/05 S&P:    1185
Winner or Loser:  loser                 By:     -11

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.angelfire.com/or/paulrogers/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

... That tagline is TRUE ->  <- That tagline is FALSE
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