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The Anals of Stock ProctologyPublished 5 times
per week by the American Academy of Stock Proctology and Available by annual subscription for $1929. (Just kidding, details to follow.) Welcome to the The Anals of Stock Proctology, the new scholarly journal of the American Academy of Stock Proctology, edited by the world famous founder of the study of Stock Proctology, Dr. Stepan N. Stool PHandD. The Anals replaces Capitalstool's nightly and weekend updates of the major stock indexes. Now you can get your nightly stock proctology report in one convenient, uncluttered page, right here. The Anals will be available for free, for the immediate future. Some time between now and March 15, however, all advertising and solicitation will be removed from the Anals, and access to the Anals will be restricted to subscribers. As a result of the clean format, the Anals will be readily printable for reading in locations more appropriate to such endeavors, such as, uh, the kitchen table. Yes. The remainder of the site, including The Stool Pigeons Wire, IntradayStool, Stoolhoo, and Stoolchat, will continue to be free. You will never have to pay for access to these pages. Previous contributors to Capitalstool will receive a free subscription period. Prior to going to a subscription format, the voluntary pay buttons will remain. So feel free to contribute now. Your contribution will result in a full credit toward your future subscription. Several of you have already contributed in excess of $500, and you will receive a free lifetime subscription. Contributors of written content or illustrations used on the Capitalstool front page will also receive free subscriptions. That includes all who achieve the level of Professor of Stock Proctology on the Stool Pigeons Wire. Initial subscription rates will be $19.29 for a 3 month trial and $74 per year thereafter, in honor of the great bear markets of the 20th century. As always I thank you for your support, and I look forward to many prosperous years working together with you. Dr. Stepan N. Stool February 19, 2002
Beginning of The End (2/19/02) The Feed gave the markets $10 Billion today. Feeds that large are almost always followed by a jam the next morning. If it comes, this time it will be gone in the bat of an eye. If it doesn't, that should tell you something. Personally, I don't think it matters any more. The public trust in stocks is broken. The sheeple are walking away from this market in disgust, and that movement is barely in its infancy. It will only grow. I smell death about this market. The real crapitulation phase, the one from which there is no recovery, is under way. It is likely to grind on for months. The markets are headed much lower, and the decline will last much longer than anyone ever thought possible. The unwinding of the giant pyramid scheme that is the US economy and financial system has begun in earnest now. As the intraday charts show, the market managers tried around mid-day to hold the Dow Jokes together, but they couldn't do it. FleetEnemaBoston's problems with just about everything they touch turning to crap, are going to have a major bearing on this market. If you look at the track record of New England banks, you've gotta think that New England bankers are some of the dumbest bastards on the face of the earth. My mind always goes back to the Bank of New England (BONE) which the FDIC took over back in the early nineties. Most of the guys at Fleet probably came from BONE. As the third largest NYSE specialist firm, Fleet controls a third of the Dow, including JPM, and GE, which are coming under increasing pressure. Then there's WalMart. If that bad boy should start to come under pressure in a generalized market decline, Fleet will be in no position to do its job for any of the 500 stocks for which it acts as specialist, and the market will crack badly. The potential for a 1000 point down day in the Dow at any time is a real and present danger. Looking at the daily chart, the Dow is headed for the lower reaches of its bulloney bullhorn formation. It will get there fast, pause, then collapse again from there..
Wisdom of the Poodits Here's a sampling of Tuesday's poodit sentiment along with a little Stool editorial comment. Pay attention to the subtle difference between remarks coming from the buy side of the Street, and the sell side. Buy Side Poodits Until the public sees some evidence that these fears are inflated beyond reality, companies will have a tough time benefiting from any possible positive news. We expect the market to remain in a trading range for the next several weeks. -Portfolio Sphincter Positive news on the economic front isn't sinking in as investors are preoccupied with accounting fears and credit problems. There was a heck of a lot of debt amassed in the telecommunications area. Portfolio Sphincter Here's just one more name; let's just add another log to the fire. One is starting to get the impression that all (companies) are doing it and I think with that comes the worry: 'Is this really where I want to have my money? -Portfolio Sphincter There are increasing signs that the situation may actually be deteriorating for phone-related companies - Portfolio Sphincter Normally people would cheer up and say 'It's great to have more disclosure' but the fact that they feel that they (companies) need to disclose more, that they need to explain their earnings, worries people a little bit- Mental Institutional Head Trader IBM is foreshadowing what's to come with other companies. You have to expect a contraction (in stock prices) as companies start to get revalued. -Mental Institutional Head Trader When I read these things in a big lump like that, I don't know whether to laugh or cry. These people are running your retirement funds into the ground. Is it any wonder? Reading this stuff, you wouldn't think any of them got past the sixth grade. But more to the point is the fact that while they are concerned, there is absolutely no hint of fear or panic, no indication of prudent selling, nor is there any recognition of the seriousness of the situation. What that all boils down to is that sentiment has a long long way to go, and there's going to be a steady trend of liquidation exceeding demand in the months to come. Now let's read the noises coming from the other side of the Street, the sell side. Notice any difference? Sell Side Poodits The stars are beginning to line up! Go long! Earnings predictability -- not valuation - is critical for stocks to sustain gains and earnings revisions are turning positive! - Borker Chief Strat-ego-ist. Never count out the U.S. consumer! The labor market is considered the key to the consumer outlook and news on the jobs front is encouraging. Even the manufacturing sector looks like it has bottomed out! Borker Chief Economist All these accounting problems are part of the decline -- they represent a can of worms that hasn't been opened yet, IBM is one of our catalysts today and telecom stocks are a real concern -- you can worry about some of these companies having a credit crunch.-Borker Analcyst Others I don’t think we’re in a freefall situation. But there’s not a lot of positives to really hang your hat on. NYSE Floor Trader
Well there you have it, your nightly unscientific sampling of the wisdom of the poodits. The mental institutions managing your money are concerned, and the borkers are split between the top shills shilling and lying their asses off as always, and the analcysts down the line a bit expressing mild concern. This is definitely not the stuff that turns are made of. |
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SPX Charts The VIX, a sentiment measure based on options volatility, is beginning to move into neutral territory from extreme complacency. This movement is similar to what took place in late August. The result should be the same this time, only I suspect it will last longer because there will be no catalyst for a turn this time. Momentum is atrocious and just beginning to weaken again. The long term trend channel is intact, with prices starting their trek toward the bottom of the channels.
If the 10-13 week cycle low was as shown, this decline could last for two months or more. The alternative is that the mid December low was the 10-13 week cycle low, suggesting that the decline could end in two to six weeks. There's no way of knowing which view is more probable at this point. We'll have to be open to the market's message when the time comes. The fact that the 10-13 week cycle oscillator is at a low level is an indication of extreme weakness at this point. Note that the short term cycle oscillator is just beginning to turn down.
The next fiber nacho reflux level is at 1061, just below a downtrend support line. The way momentum is building it will go through that like a knife through butter.
The Cycle Conditions tables have a new feature, a wild guess as to number of periods to the next turn, in days for the shortest cycles, weeks (W) or months (M) for the longer ones. Is Doc a wild and crazy guy, or just a glutton for punishment? Actually, this is because I miscounted the last 13 day cycle, and was a day late and a dollar short at the low, looking for it on Monday, instead of Friday. That's no excuse, because 12 days is close enough, but this will force all of us to be a little more vigilant. It will still be wrong most of the time, but a little discipline can't hurt. SPX Cycle Conditions as of 2/19/02
PTT - Periods Till Turn Nasdaq Charts This looks even worse. The only question is how fast the Nas breaks below 1600. And waht if that spike last week represents the top of the downtrending intermediate cycle band?
The similarities to last August continue to be striking.
Nasdaq Cycle Conditions as of 2/19/02
PTT
- Periods Till Turn Golden Stool The gold stocks keep getting hit, and keep coming off the mat. This still looks like a sideways down phase correcting a powerful uptrend.
Walfart is so important because it is so gigantic, and has held up so well for so long. It is the market's shining beacon on the hill. Unfortunately, the stock is stage managed on the NYSE by the world's weakest, most incompetent, specialist firm, Fleet. The stock broke through major resistance 4 weeks ago and is now on its way back below, a WHOPsaw of mammoth proportions. The signs are in place for the stock to now fall to the bottom of the long term channel projection. Do you think the boyz and gulls at Fleet were smart enough to get short on this one? Because if they weren't you and I as taxpayers may end up owning a piece of a NYSE specialist firm one of these years, courtesy of Fleet and the fine folks at the Fed and the FDIC. Nah, they'll probably just combine with JPM. Now isn't that a nightmare scenario.
See you in Intraday Stool. Let us know what you think on the Stool Pigeons Wire. Archive |
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