1-31-05 Dear Readers:  In a surprisingly strong move (because we are in an Intermediate Down Trend (IDT)), the S&P500 finished up by 10 to 1181. We are now at the IDT upper trend line (wish I could get this software to display graphs), which indicates we should sell off from here.

The on-balance volume (OBV)(note 2) today was +973 (million shares). The 5 day moving average (5DMA)(note 1) of  the OBV rose from +41 to +331. We dropped a -476 from the average from six days ago, giving a positive bias to the 5DMA today. We will have a negative bias to the 5DMA Tuesday-Thursday due to dropping a positive number from the 5DMA from six days prior. No signals today. We are now above the upper threshold on 5DMA of +19;  we will get a SELL signal when the S&P and 5DMA both close down. Please see Glossary  for any unfamiliar terms.

1-28-05 Dear Readers:  The S&P500 finished down by 3 to 1171. Market is toying with us again; down early and flirting with the lower bogey (recent minor low), set at 1163.8 on 1/24/05. And yet the 5DMA is not high enough to trigger a sell signal today (needs to be +19 and is at +15), so close!

The on-balance volume (OBV)(note 2) today was -333 (million shares). The 5 day moving average (5DMA)(note 1) of  the OBV rose from +15 to +41. We dropped a -463 from the average from six days ago, giving a positive bias to the 5DMA today. We will have a positive bias to the 5DMA Monday due to dropping a negative number from the 5DMA from six days prior. No signals today. We are now above the upper threshold on 5DMA of +19;  we will get a SELL signal when the S&P and 5DMA both close down. Please see Glossary  for any unfamiliar terms.

Long-Term Investors End of Week update. The end of month results will be reported next week. The 200DMA (40 week moving average (40WMA)-Friday closes) of the S&P500 continues its advance; this fulfills the definition of a continuing BULL market. And the S&P is above the 40WMA, which is nice, but not necessary to the definition. This may be seen on Long-term Investor's page, Table 4, which is updated weekly. The last entry in Table 4 shows an increase in the 40WMA over last week, and that the S&P500 close today is above that average. Table 2 of the Long-Term System page was updated for the month of December, and that table shows an increase in the nine month moving average, and that the S&P is above that average line, indicating a BULL Market. We are above the nine month (appx 200 DMA) MA line, but the 40 WMA is what we use for the BEAR/BULL signals. No change in our Long-term positions; we are long SPY and QQQQ in equal amounts, using 100% of available funds for long-term equities. The change in these positions since the BULL market began on 11/5/04 is +0.45% using S&P only as the basis, or +0.15% using 50% of SPY and 50% of QQQQ for the calculation. Please see ETF page for meaning of these symbols. Please see Glossary for any unfamiliar terms. The market needs to stay above about 1107.  for 4 more weeks to avoid a BEAR market signal.

1-27-05 Dear Readers:  The S&P500 finished up by 1 to 1175.

The on-balance volume (OBV)(note 2) today was +252 (million shares). The 5 day moving average (5DMA)(note 1) of  the OBV rose from -196 to +15. We dropped a -804 from the average from six days ago, giving a positive bias to the 5DMA today. We will have a positive bias to the 5DMA Friday-Monday next due to dropping a negative number from the 5DMA from six days prior. No signals today. We are close to the upper threshold on 5DMA of +19, above which we will get a SELL signal when the S&P and 5DMA both close down. Please see Glossary  for any unfamiliar terms.

1-26-05 Dear Readers:  BUY signal today (see next paragraph). The S&P500 finished up by 7 to 1175.

The on-balance volume (OBV)(note 2) today was +593 (million shares). The 5 day moving average (5DMA)(note 1) of  the OBV rose from -465 to -196. We dropped a -751 from the average from six days ago, giving a positive bias to the 5DMA today. We will have a positive bias to the 5DMA Thursday-Monday next due to dropping a negative number from the 5DMA from six days prior. The simultaneous upturn in S&P and 5DMA, while the 5DMA was below the lower threshold of -28, gives a BUY signal. Since this is the first BUY signal in this series and since the Long Purchase State is Dirty because Intermediate Down Trend is TRUE, we BUY with only 50% of available funds for equities equal amounts of SPY, QQQQ, and IWM. Please see ETF page for meaning of these symbols. Market State page has been updated for the BUY. Please see Glossary  for any unfamiliar terms.

Short Sellers Paragraph: Short sales were bought back on today's BUY signal, for a tiny profit. We dont report gain/loss in the Results_History because most readers do not sell short. The Short Sale State changes from Unknown to Clean with the  trade, which was closed out (whether by profit or loss) before the high bogey was hit (please see column for 1/20/05>Short Sellers paragraph for discussion of this concept).  Market State page has been updated for this change. Please see Glossary for any unfamiliar terms.

1-25-05 Dear Readers: It looked like a BUY signal day, but it wasn't (see next paragraph). The S&P500 did finish up by 5 to 1168.

The on-balance volume (OBV)(note 2) today was a modest +171 (million shares). The 5 day moving average (5DMA)(note 1) of  the OBV actually fell from -333 to -465. We dropped a +830 from the average from six days ago, giving a negative bias to the 5DMA today. We will have a positive bias to the 5DMA Wednesday-Monday next due to dropping a negative number from the 5DMA from six days prior. No signals today. It was not a BUY signal since the 5DMA did not turn up. Since we are now below the buying threshold on 5DMA, which is -28 for OSCILLatory State, we could get a BUY signal anytime that we have both S&P and 5DMA turning up. Please see Glossary  for any unfamiliar terms.

Short Sellers Paragraph: Short sale was not closed out because neither was a BUY signal given nor was there a violation of the high bogey at 1196, set on 1/18/05. Please see Glossary for any unfamiliar terms.

1-24-05 Dear Readers: The S&P500 finished down by 4 to 1164.

The on-balance volume (OBV)(note 2) today was -476 (million shares). The 5 day moving average (5DMA)(note 1) of  the OBV fell from -121 to -333. We dropped a +581 from the average from six days ago, giving a negative bias to the 5DMA today. We will have a negative bias to the 5DMA Tuesday due to dropping a positive number from the 5DMA from six days prior. No signals today. Since we are now below the buying threshold on 5DMA, which is -28 for OSCILLatory State, we could get a BUY signal anytime that we have both S&P and 5DMA turning up. Please see Glossary  for any unfamiliar terms.

Short Sellers Paragraph: Short sale is looking good. Please see Glossary for any unfamiliar terms.

1-21-05 Dear Readers: A follow-through to yesterday's decline. The S&P500 finished down by 8 to 1168.

The on-balance volume (OBV)(note 2) today was -463 (million shares). The 5 day moving average (5DMA)(note 1) of  the OBV fell from -109 to -121. We dropped a -399 from the average from six days ago, giving a positive bias to the 5DMA today. We will have a negative bias to the 5DMA Monday-Tuesday due to dropping a positive number from the 5DMA from six days prior. No signals today. Since we are now below the buying threshold on 5DMA, which is -28, we could get a BUY signal anytime we have both S&P and 5DMA turning up. Please see Glossary  for any unfamiliar terms.

Long-Term Investors End of Week update. The 200DMA (40 week moving average (40WMA)-Friday closes) of the S&P500 continues its advance; this fulfills the definition of a continuing BULL market. And the S&P is above the 40WMA, which is nice, but not necessary to the definition. This may be seen on Long-term Investor's page, Table 4, which is updated weekly. The last entry in Table 4 shows an increase in the 40WMA over last week, and that the S&P500 close today is above that average. Table 2 of the Long-Term System page was updated for the month of December, and that table shows an increase in the nine month moving average, and that the S&P is above that average line, indicating a BULL Market. We are above the nine month (appx 200 DMA) MA line, but the 40 WMA is what we use for the BEAR/BULL signals. No change in our Long-term positions; we are long SPY and QQQQ in equal amounts, using 100% of available funds for long-term equities. The change in these positions since the BULL market began on 11/5/04 is +0.2% using S&P only as the basis, or -0.04% using 50% of SPY and 50% of QQQQ for the calculation. Please see ETF page for meaning of these symbols. Please see Glossary for any unfamiliar terms. The S&P500 needs to stay above 1141. for one more week to avoid a BEAR market signal. After that, we need to stay above about 1100. for 5 weeks to avoid the signal.

Short Sellers Paragraph: Yesterday's short sale is looking good. Please see Glossary for any unfamiliar terms.

1-20-05 Dear Readers:  The S&P500 finished down by 9 to 1175. SELL signal today (see next paragraph).

The on-balance volume (OBV)(note 2) today was -804 (million shares). The 5 day moving average (5DMA)(note 1) of  the OBV fell from +116 to -109. We dropped a +317 from the average from six days ago, giving a negative bias to the 5DMA today. We will have a positive bias to the 5DMA Friday due to dropping a negative number from the 5DMA from six days prior. The simultaneous decline in the S&P and the 5DMA, while the 5DMA was above the upper threshold of +19, gives a SELL signal. We sold the SPY, QQQQ and IWM that we bought on 1/6/05. The round trip resulted in a loss of 1.7%, bringing the loss for the year 2005 to -1.7%, compared to the S&P loss of -3.6%.  Please see Glossary  for any unfamiliar terms.  The Market State page has been updated for the SELL. The Results_History has been updated for the round trip results.

We now have declining minor tops (1213.5 on 12/28/04 and 1196 on 1/18/05) and declining minor bottoms (1177.5 on 1/13/05 and any minor bottom in the future, as we are below 1177 now), and the Volatility Index (VIX) showed a new low over the past two years of 11.1 in third week of 12/04. All this put together gives an Intermediate Down Trend (IDT) is true signal. That means we have Long Purchase State fixed as Dirty, meaning we buy with only 50% of available funds for equities on first BUY signal, 25% on next BUY signal, etc. Please see Glossary for further explanation. The Market State page has been updated for the IDT signal.

Short Sellers Paragraph: Since we are now in OSCILLatory State and today's decline was at least four S&P points, we may sell short. I shorted 50% of available funds for equities, divided between SPY and QQQQ. The bogey for this trade is at 1196, set on 1/18/05, meaning that if we get an S&P close at 1197 or above, we must close out the short positions. We change the Short Sale State to unknown, since the last change was due to declaration of a Run-5 Market State. Short selling is not recommended for the average investor. We do not at this time have a Results History incorporating any short sales. Please see Glossary for any unfamiliar terms.

1-14-05 Dear Readers: I will be travelling the week of 1/17-1/21, so this column will not be published then.

A nice rebound after yesterday's debacle. Have no fear, this rally will not last long. I hope we get a SELL signal in a day or two so we can get out on this rally. The market strongly acts like it will go lower after a few days rally. The S&P500 finished up by 7 to 1185. Recall that 1183 was the previous bogey; this is significant for chart followers. One advantage of the OSCILLATORY Market State which we declared yesterday is that one may now sell short, if one is so inclined. We do not recommend shorting for the average investor.

The on-balance volume (OBV)(note 2) today was +581 (million shares). The 5 day moving average (5DMA)(note 1) of  the OBV rose from -164 to +29. We dropped a -384 from the average from six days ago, giving a positive bias to the 5DMA today. We will have a negative bias to the 5DMA Monday due to dropping a positive number from the 5DMA from six days prior. We are now above the upper threshold of +19, so a down S&P Monday will probably be our SELL signal. No signals today. Please see Glossary  for any unfamiliar terms.

Long-Term Investors End of Week update. The 200DMA (40 week moving average (40WMA)-Friday closes) of the S&P500 continues its advance; this fulfills the definition of a continuing BULL market. And the S&P is above the 40WMA, which is nice, but not necessary to the definition. This may be seen on Long-term Investor's page, Table 4, which is updated weekly. The last entry in Table 4 shows an increase in the 40WMA over last week, and that the S&P500 close today is above that average. Table 2 of the Long-Term System page was updated for the month of December, and that table shows an increase in the nine month moving average, and that the S&P is above that average line, indicating a BULL Market. We are above the nine month (appx 200 DMA) MA line, but the 40 WMA is what we use for the BEAR/BULL signals. No change in our positions; we are long SPY and QQQQ in equal amounts, using 100% of available funds for long-term equities. The gain in these positions since the BULL market began on 11/5/04 is 1.6% using S&P only as the basis, or 2.4% using 50% of SPY and 50% of QQQQ for the calculation. Please see ETF page for meaning of these symbols. Please see Glossary for any unfamiliar terms.  The S&P500 needs to stay above 1141. for two more weeks to avoid a BEAR market signal.

Short Sellers Paragraph: If Monday (or any day next week) is a SELL signal, since we are now in OSCILLatory State, we may sell short. I may be shorting 50% of available funds for equities at that time. Short selling is not recommended for the average investor. We do not at this time have a Results History incorporating any short sales. Please see Glossary for any unfamiliar terms.

1-13-05 Dear Readers: Well the market stopped toying with us, and let us have it in the solar plexus. The S&P500 finished down by 10 to 1178.

The on-balance volume (OBV)(note 2) today was -399 (million shares). The 5 day moving average (5DMA)(note 1) of  the OBV fell from -12 to -164. We dropped a +364 from the average from six days ago, giving a negative bias to the 5DMA today. We will have a positive bias to the 5DMA Friday due to dropping a negative number from the 5DMA from six days prior. No BUY/SELL signals today. The violation of the bogey at 1183.7, set on 1/5/05, drops the Market State from Run-5 to OSCILLATORY. This means the buy and sell signals come at different thresholds now. Also indicates a weakening market (as if you needed any more evidence). We do not sell out our long positions in a bull market when a bogey is violated. We are not far from a BEAR market signal, which will come if the S&P closes in the 1130 range in the next two weeks. We dont yet have enough information to declare an Intermediate Down Trend. Please see Glossary  for any unfamiliar terms. The Market State page has been updated for the State change.

1-12-05 Dear Readers: The S&P500 finished up by 5 to 1188, after teasing us all day with less than a point decline, which would change the Market State from Run-5 to Oscillatory.

The on-balance volume (OBV)(note 2) today was +317 (million shares). The 5 day moving average (5DMA)(note 1) of  the OBV rose from -246 to -12. We dropped a -853 from the average from six days ago, giving a positive bias to the 5DMA today. We will have a negative bias to the 5DMA Thursday due to dropping a positive number from the 5DMA from six days prior. No signals today. Please see Glossary  for any unfamiliar terms.

1-11-05 Dear Readers: The S&P500 finished lower by 7 to 1183, wiping out yesterday's advance. Let's hope this is not the beginning of a major decline. We are still considerably oversold, so we should get some more upside. We did close below the last bogey (minor low before last BUY signal) of 1183.7 on 1/5/05, but the violation was not at least one point. A violation of one point will drop the Market State from Run-5 to Oscillatory, thereby changing the thresholds in 5DMA at which signals occur. We do not sell out our long positions when a bogey is violated in a BULL market. But the S&P500 does look perilous. As I have mentioned before, we are not that far from a BEAR market. A close in the 1130 range will do it.

The on-balance volume (OBV)(note 2) today was -756 (million shares). The 5 day moving average (5DMA)(note 1) of  the OBV rose from -352 to -246. We dropped a -1287 from the average from six days ago, giving a large positive bias to the 5DMA today. We will have a positive bias to the 5DMA Wednesday due to dropping a negative number from the 5DMA from six days prior. No signals today. Please see Glossary  for any unfamiliar terms.

1-10-05 Dear Readers:  Finally an up day. The S&P500 finished with an advance of 4 to 1190.

The on-balance volume (OBV)(note 2) today was +400 (million shares). The 5 day moving average (5DMA)(note 1) of  the OBV rose from -597 to -352. We dropped a -823 from the average from six days ago, giving a positive bias to the 5DMA today. We will have a positive bias to the 5DMA Tuesday-Wednesday due to dropping a negative number from the 5DMA from six days prior. No signals today. Please see Glossary  for any unfamiliar terms.

1.           Concerning the down week last week, here is a quote on the subject. "While there were 19 other years since 1945 in which the market declined in the first five trading days, in only 9 of those years did the Standard & Poor's 500-stock index wind up down for a full 52 weeks.

          The worst five-day declines were 4.7 percent in 1978 and 4.6 percent in 1991. But neither led to year-end losses. In 1978, the S.& P. inched 1.1 percent higher for the year, while in 1991, the index jumped 26.3 percent, its 11th-best annual performance since 1945. The five-day decline last week was 2.1 percent, the eighth biggest of the 20 since 1945.

         But it would have been much nicer if the S.& P. 500 had been in the black by the end of the week. Historically, a climb over the first five trading days has been a pretty reliable indicator of a positive year to follow.

1.          In the 40 years in which the S.& P. rose over the first five trading days, the index has finished the year higher 31 times, and lower just 8 times." - JONATHAN FUERBRINGER , NY Times, 1/9/05.

1-7-05 Dear Readers:  In another dull day, the S&P500 finished with a decline of 2 to 1186.

The on-balance volume (OBV)(note 2) today was -384 (million shares). The 5 day moving average (5DMA)(note 1) of  the OBV fell from -520 to -597. We dropped a -2 from the average from six days ago, giving a neutral bias to the 5DMA today. We will have a positive bias to the 5DMA Monday-Wednesday due to dropping a negative number from the 5DMA from six days prior. No signals today. Please see Glossary  for any unfamiliar terms.

Long-Term Investors End of Week update. The 200DMA (40 week moving average (40WMA)-Friday closes) of the S&P500 continues its advance; this fulfills the definition of a continuing BULL market. And the S&P is above the 40WMA, which is nice, but not necessary to the definition. This may be seen on Long-term Investor's page, Table 4, which is updated weekly. The last entry in Table 4 shows an increase in the 40WMA over last week, and that the S&P500 close today is above that average. Table 2 of the Long-Term System page was updated for the month of December, and that table shows an increase in the nine month moving average, and that the S&P is above that average line, indicating a BULL Market. We are above the nine month (appx 200 DMA) MA line, but the 40 WMA is what we use for the BEAR/BULL signals. No change in our positions; we are long SPY and QQQQ in equal amounts, using 100% of available funds for long-term equities. The gain in these positions since the BULL market began on 11/5/04 is 1.7% using S&P only as the basis, or 2.1% using 50% of SPY and 50% of QQQQ for the calculation. Please see ETF page for meaning of these symbols. Please see Glossary for any unfamiliar terms.  The S&P500 needs to stay above 1141. for three more weeks to avoid a BEAR market signal.

I am concerned about the week's loss. As noted in our 1/3/05 column, the first week of January tends to portend the month of January, and the month portends the year. That, combined with our Cautionary Alert paragraph of yesterday, adds up to possibly a down year for 2005.  We have tools to deal with a BEAR market, but many investors will  resist them, and end up losing money.

1-6-05 Dear Readers:  Finally, a bit of an advance, the S&P500 finished with an advance of 4 to 1188. Short-Term regular BUY signal today (see next paragraph).

The on-balance volume (OBV)(note 2) today was +364 (million shares). The 5 day moving average (5DMA)(note 1) of  the OBV rose from -579 to -520. We dropped a +70 from the average from six days ago, giving a small negative bias to the 5DMA today. We will have a neutral bias to the 5DMA Friday due to dropping a small number from the 5DMA from six days prior. The simultaneous upturn in S&P and 5DMA, while the 5DMA was below the lower threshold of -5, gives a Short-Term BUY signal. We are back to buying equal amounts of three ETF's: SPY, QQQQ and IWM. The Russell 2000 (small cap stocks) index (IWM) is behaving better these days. Please see ETF page for explanation of these symbols. We are buying with 100% of available funds for equities. Please see Glossary  for any unfamiliar terms. The Market State page has been updated for the BUY.

Cautionary Alert for Short and Long Term Investors: There is something VERY important approaching. The S&P made a new three year high on 12/28/04 at 1213.5. Today's BUY signal signifies, I believe, a coming run-up to that 1213 level. If S&P fails to exceed 1215 (closing value) on this advance and falls again, that (with the VIX, next sentence) will be indicative of a beginning Intermediate Down Trend (IDT). VIX  has been even lower than the last time an IDT was declared. It was as low as 11.1 about two weeks ago, versus appx 13 last time. Very low VIX indicates a toppy market, vulnerable to decline. Please see Glossary>VIX and IDT. An IDT could take us to the vulnerable area below 1140 on S&P500, where the beginning of a BEAR market could be signalled in as little as 3 weeks from now.      

1-5-05 Dear Readers:  Aren't you glad you are out of the market during the recent declines? Our last Short-term SELL signal was 12/29/04 when the S&P was at 1213. Another lame session, the S&P500 finished with an decline of 4 to 1184.

The on-balance volume (OBV)(note 2) today was -853 (million shares). The 5 day moving average (5DMA)(note 1) of  the OBV fell from -382 to -579. We dropped a +133 from the average from six days ago, giving a negative bias to the 5DMA today. We will have a negative bias to the 5DMA Thursday due to dropping a positive number from the 5DMA from six days prior. Since the 5DMA is below -400, we say the market is oversold. And we are now well below the threshold of -5 in 5DMA where we will get a BUY signal when S&P and 5DMA both turn up. No Signals today. Please see Glossary  for any unfamiliar terms.

1-4-05 Dear Readers:  The market's not finding anything to like so far this year. We're going to have to work very hard to get the first week up (see yesterday's column). The S&P500 finished with another double digit decline of 14 to 1188.

The on-balance volume (OBV)(note 2) today was -1287 (million shares). The 5 day moving average (5DMA)(note 1) of  the OBV fell from -3 to -382. We dropped a +606 from the average from six days ago, giving a negative bias to the 5DMA today. We will have a negative bias to the 5DMA Wednesday-Thursday due to dropping a positive number from the 5DMA from six days prior. We are now well below the threshold of -5 in 5DMA where we will get a BUY signal if S&P and 5DMA both turn up. No Signals today. Please see Glossary  for any unfamiliar terms.

1-3-05 Dear Readers:  Well Happy New Year!, but the market thought so for only about 30 min, then went south. The S&P500 finished with a 10 point decline to 1202. There is a saying that the direction of January can be determined from the first week of January, and that the year's market direction can be determined from the market's performance in January. Here's a quote from 2002 I found: "The 'January Barometer' has been a precise forecasting tool. In the 34 years since 1950 when the Standard & Poor's 500 index posted gains in January, it finished down for the year only three times. The 18 times it fell in January, it finished down 66% of the time."- Adam Shell, USA TODAY, 12/26/2002. Such statistical observations are not part of the Field Systems, but I point them out as of interest, occasionally.

The on-balance volume (OBV)(note 2) today was -823 (million shares). The 5 day moving average (5DMA)(note 1) of  the OBV fell from +112 to -3. We dropped a -247 from the average from six days ago, giving a positive bias to the 5DMA today. We will have a negative bias to the 5DMA Tuesday-Thursday due to dropping a positive number from the 5DMA from six days prior. We are close to the threshold of -5 in 5DMA where we can get a BUY signal if S&P and 5DMA both turn up. No Signals today. Please see Glossary  for any unfamiliar terms.