Published 5 times
per week by the American Academy of Stock Proctology and
the American Society of Shortsellers
Dr. Stepan N. Stool, A.S.S. Chair
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Welcome to the The Anals of Stock Proctology, the
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study of Stock Proctology, Dr. Stepan N. Stool PHandD.
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Dr. Stepan N. Stool
Chairman of the Department of Stock Proctology
A.S.S. Endowed Chair
American Society of Shortsellers Endowment
American Academy of Stock Proctology
Stocks came out of the gate strong on Tuesday,
churned for a couple hours, fell apart in mid-afternoon, then ramped in
the last half hour. The SPX gained 7.66 to close at 1146. The Nasty was up
4.97 at 1995.71, and the Dow gained 32.73 to close at 9924. The
afternoon lows were 1137 on the SPX, 1977 on the Nas, and 9865 on the Dow.
The highs, which were hit in mid morning, were 1149, 2011, and 9986. The
ramp agent for the end of day move was our old friend Mr. Suckhead, which
gained a point between 3 and 4 PM. Untel added 1/2 during the jam, and
they greased Crisco by 3/8. In the after hours those late gains looked
liked ant hills, as the Big 3 got dumped on Untel's "good
earnings". The problem is that "good" really sucks, and the
people gambling with your money are having a hard time continuing to play
with themselves, since nobody seems interested in buying this crap
anymore. They are also worried that this is as good as it gets. When Intel
said it would cut cap ex, semiconductor equipment stocks got crushed.
As it turns out, the hourly oscillators are
indicating that the 8 day cycle low which appeared to be missed on Monday,
was indeed put in. It should also have been a 13 day cycle low. But the up
phase doesn't look like it's going anywhere. Just another "dreaded
sideways up phase". That's when cycle phase is positive but price
simply moves in a range. It lulls the bulls to sleep, because they think
it's consolidation. Which it is, but it's consolidation for the next move
down. When will that come? Impossible to say, but it could be anytime.
Normally the up phase of an 8-13 would last from 4 to 7 days in a neutral
longer cycle. The up phase should be truncated if the 4, 6-7, and 10-13,
week cycles are starting to come down. The sooner it gets started, the greater
the market's weakness.
One of these days the market is going to start
trending, and these short cycles will cease to be an issue. Wednesday may
just be the day.
SPX Charts
The SPX is still perched precariously at the upper edge of its long
term regression channel. The VIX still signals relative complacency.
Momentum indicators are signaling that the market is in the early stages
of what should be a big move down. When rate of change or other mo type
oscillators turn down from neutral territory, it's normally a sign that a
big move will be forthcoming.
The 6 month cycle ozzie is flashing sell again, after a double pump.
But, as discussed above the short cycle oscillator is starting to bounce.
The bear got a little indigestion from the Dover Sole it ate over the last
week. The bounce won't get far. At best it will track the underside of
that pink trendline for a few days.
The short
cycle on the Nas hasn't turned up yet. Chances are the Bear will have a
lot more Dover Sole to eat here. That's because, on an intermediate basis,
the bulls gorged themselves, and they are now puking and dumping all over
the barnyard. Still based on a rising 10-13 week cycle, they probably have
some buck left in them. Could be a bumpy ride down, similar to what we saw
in May-August when the 10-13 was in a positive mode. In other words, the
dipshits will be buying the dips, and running the shorts. But it will be a
good trading environment, if you're willing to cover when things get a
little overheated on the downside, and re-short when they bounce. One of
these days the Nas will stop bouncing and start trending, but that day
doesn't appear to be hear yet. If there's panic selling in the morning,
you can bet the dipshits will be there to catch 'em and run them up the
flagpole in the afternoon. The inscription on the flag will say,
"Short Me If You Dare." And I will.
Tonight's
stoolwether is Untel. They make the microprocessors that nobody needs any
more. Yes the new chips break the sound barrier. And Ford builds cars that
can go 200 miles per hour, but nobody buys them either. As for the TA, the
stock has been in a 12-18 month cycle up phase since April. The up phase
has been contained in a flat wave. The next move is down, and it will be
big. Short and intermediate momentum and cycle indicators have been
flashing sell signals since Untel traded above 35 last week. That spurt is
likely to turn into one of those most important of chart patterns that
students of Stock Proctology are always on the lookout for, the whopsaw.
Once that whopsaw is complete, you can stick a fork in Untel.
Copyright
2002 by Capitalstool.com. All rights reserved. Charts courtesy of
Stockcharts.com.
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