The Market was down most of the day, ended slightly positive, and volume
was up +5% above average.  The Oscillator is still very negative, and
that tells me what's really going on in the Market.

Just what are these McClellan indices I've spent so much time tracking,
and report to you daily?  To review first, we all know a property of
moving averages is the shorter the term, the less "memory" it has of a
trend, and the faster it responds to immediate changes.  Well, most
easily explained, the Oscillator is roughly the 20-day moving average of
the Advances minus Declines, minus the 40-day moving average.  The
20-day moving average is a short-term measure about whether the entire
market is moving up or down.  The 40-day moving average is a bit slower
moving.  Subtracting out the slower 40-day trend removes the effect of
the Market action older than 2 months, and puts emphasis on the most
recent action of the past month.  So it answers "which way is the market
as a whole moving NOW?"  When the Oscillator is positive the market is
moving up, negative is down.  The Advances minus Declines weights all
stocks equally, that's important.  But it's a "quick twitch" indicator,
and normally pegs at about 150 either way.  The Summation Index is
merely a running total, an integral for those who remember their
Calculus, and tends to peg at about 2,000-3,000 either way.

I've watched these for over a decade now, collected daily data and
calculated them myself since April '94.  These numbers are tracking the
market as a whole.  Sure, sometimes this or that sector, large-caps, or
small-caps pulls ahead, but really, unless the whole market goes along,
it's not going far.  After all, that's what we mean by a "Bull Market"
or a "Bear Market"--we're acknowledging that there are primary trends in
the market.  There is a close correlation between the Summation Index
and the direction of the market.  When the Summation Index gets to plus
or minus 2,000-2,500 or so we're well in the grip of a raging bull or
roaring bear.  But the Summation Index can't change unless the
Oscillator changes.  When the Summation Index is pegged, and the
Oscillator is hovering around zero then nothing is changing, ride it
out.  But when the Oscillator pegs the opposite direction, then the
market as a whole is starting to change--look for further confirmation.

That's what I like it for.  The daily swings in the market are chaotic!
Especially when you judge that by just 30 stocks.  I find the McClellan
indices tend to confirm, or to dismiss, noise in the market quite
effectively.

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

 __<_      <___      __|_      __|_      _|__      ___<     07/31
 _<__      |___      _|__      _|__      <___      ___<     08/01
 __<_      |___      __|_      _<__      <___      __<_     08/04
 _<__      |___      _|__      _<__      <___      __<_     08/05
 _____      _|__      __<_      <___      __<_     08/06

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:  08/05/03 S&P:    965
Winner or Loser:  Loser                 By:     -17

See my market tracking charts for '01-'02 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

                                                   



... Stop it!  Now take your tagline and go to bed.
___ MultiMail/MS-DOS v0.35

---