The Law of Chaos is the theory of random unpredictable action applied to the cosmos, mathematics, mechanics, almost everything. Those who believe it will definitely think the stock market is in chaotic state at this time. Don't you believe it.

When I was a floor trader people would ask me how do you make sense of what is going on with all that yelling and arm-waving? To the uninitiated it does look turbulent, but to those who are in the middle it is understandable and orderly. It took me a while before it became "normal".

Your broker at this time may be telling you that such-an-such stock is a great "value" because it has come down so far. Don't believe this Wall Street myth. It will only cost you money. Cash is your best position right now. Look at the pattern as shown on a stock chart.

When the trend is down never try to pick the bottom. Here are two glaring examples. Cisco went to $82. When it came down was Cisco a great buy at $65? Did your broker call you? Now it is $11 and headed for $' Lucent looked like a buy at $60 and now it is 77 cents down from 77 dollars! Is this chaos or is there an orderly pattern to this mess? The lesson here is never buy any stock or mutual fund that is in a downtrend and if you own something that is, sell it immediately.

To those of us who have studied the price patterns of individual stocks and market indexes we see a road map (stock chart) of what has happened and have a good idea where it is going. It is not random. Many brokers will tell you this can't be done and that charts tell you nothing. That is because they have not taken the time to learn their trade. Technical analysis is more important than fundamental analysis. Over any period of time a good technical analyst will beat the shirt, pants, underwear and socks off a fundamental analyst because fundamentals don't give timing. Fundamentals are the background for a major move.

There is an orderly pattern in all this seeming chaotic price action of the stock market. To become a serious trader and money-maker you must study it in order to make it a useful tool for you investments, Otherwise, you are at the mercy of brokers, financial planners, bankers and other "experts" who know as little as you.

Al Thomas

Albert W. Thomas has spent most of his life in the field of finance. In 1965 he founded an insurance holding company, Security Dynamics Investment Corporation, after having been an agent and General Agent for several life insurance companies. In 1970 he became cofounder and president of Real Life Estate, Inc., that marketed a unique real estate and life insurance package.

After he became interested in commodities he bought a seat for his personal trading on the Chicago Open Board of Trade, which is now known as the MidAmerica Commodity Exchange. Later he became a full time trader and also acted as a commodity broker for a few select clients. By fellow floor traders Al is considered to be an excellent technical analyst much of which is outlined in his book IF IT DOESN'T GO UP, DON'T BUY IT! It became a best seller on Amazon.

In 1981 he sold his membership on the Exchange and with his wife, Carolyn, lived full time aboard their 41' ketch, the Aumakua (which means guardian angel in Hawaiian). They sailed in Florida and the Bahamas for two years.

He founded World Trading Group in 1984 that grew to the seventh largest introducing commodity brokerage firm in the U.S. with 35 offices from coast to coast, Alaska and Canada. It was sold in 1992.

Al is a graduate of Northwestern University with a B.S. degree in Commerce and is a member of MENSA. He is now president of Williamsburg Investment Company that syndicates his weekly financial column since 1999 to more than 300 newspapers and writes a financial market letter called Over My Shoulder that is quoted in Barron?s and many other publications. A 3-month trial subscription is available on his web site. He is a regular guest on several financial radio talk shows.

His favorite pastime is fishing.

Mr. Thomas is available for speaking engagements. Please call 321-453-5300 for more information.