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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 or free 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. Soon, 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 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 quarterly or $74 per year, in honor of the great bear markets of the 20th century. Actually, 1937 was pretty bad too, so the Academy may offer a half year subscription for $37. Latecomers will be able to get a one time, one month trial for, what else? $6.66. As always I thank you for your support, and I look forward to many prosperous years working together with you. Happy New Year to you and to Bears the world over! Dr. Stepan N. Stool December 30, 2001
What $21 Billion Buys - Not Much (1/17/02) The real story Thursday was after the bell when Mr. Suckhead and IBM (don't they all?) reported. Surprise, surprise they beat by a penny or some such nonsense. Analcysts were so confused about whether or not to exclude "charges" in Mr. Suckhead's report, it was pretty hard to tell if MSFT actually did better than expectations or not. Don't get me started on the expectations game. What a bunch of malarkey. The point was that revenues sucked and the companies couldn't provide encouraging guidance. The long awaited upward explosion in earnings that would justify the current insane level of PE ratios isn't happening, and isn't going to happen. When the portfolio sphincters start to really catch on, the "adjustment" in the discounted cash flow models is going to result in a breathtaking plunge in stock prices. Meanwhile, during the day, the market staged a retracement of Wednesday's big selloff. Most of the averages recovered about 2/3 of the loss from the day before. The Dow gained 138 points to close at 9850. The Sphincters Index tacked on 11.31 to close near 1139, and the Nasty added 41.38 to close just over 1985. Stocks opened on a huge gap up. They retraced about half the gap, then ratcheted higher through mid day, and were jammed into the close in a full fledged short covering panic. Bears never had even a second to savor the victory in Wednesday's battle. But the real story came after the bell.
What is so striking about this chart is the market's lack of liquidity. The herky jerky movements could be indicating underlying systemic liquidity problems. It's almost shocking considering the ongoing FEED, which this week has been a mere $21 billion. I guess money jes don't buy what it used to. The market's surprising illiquidity in the face of that, has certainly taken some of the "fun" out of trading. Thursday morning it was our turn to feel the pain. Friday the bulls get theirs. In the meantime, the market is doing its damndest to shake everybody out of their positions. It's a very tough environment, but bears with patience and financial staying power will be rewarded. SPX Charts The index didn't want to drop back within its long term trend channel during the day Thursday, but the after hours action as of this writing may have taken care of that. Obviously the powers that be are doing everything they can to hold things together but the tide will sweep those efforts away sooner or later. Momentum remained negative, and the VIX shot back into the "sell" band. The bulls are in happy daze. The distribution phase has now lasted more than two months.
While the distribution top is bigger now than last spring, the cycle action looks similar. The short cycle is trying to come off a low here, and the 10-13 week cycle looks like an early rollover to the downside. Back and forth action like the last few days should not be surprising under the circumstances, but the 6 month cycle indicator is screaming sell. If the short cycle indicator fails to turn up here, there could be a lot more Dover Sole dinners for bears in the days ahead.
Nasdaq Charts The Nas also tried to form a short cycle low Thursday, but if the after hours is any indication, failed to do so, so far. The 10-13 week cycle indicator is still rising weakly, just as it did in the June- August period. The index will remain range bound while in the up phase, but should drop sharply as the down phase begins to take hold over the next week or so.
Mr. Suckhead closed at 69.86 at the bell in New York. Then they announced their terrific earnings. The red arrow shows where the price had dropped as this was being written. The stock has been under distribution since mid-October. The 6 month cycle sell signal should turn out to be timely in the long run. The dipshit buyers see that trendline at 67. It will be most instructive to see how they handle things on Friday. To GAAP, or not to GAAP, that is the question, at least among the analcysts who follow the world's largest criminal organization.
Sucktor Watch This isn't a sector. It's a chart of the future of the world. Interest rates pulled back over the last couple of weeks. The short cycle has now bottomed, and the intermediate wave is in a powerful uptrend. Can we all say, how do you stay alive at 5 point 5?
Nasdaq Cycle Conditions as of 1/17/02
L-Low,
H-High SPX Cycle Conditions as of 1/17/02
See you in Intraday Stool. Let us know what you think on the Stool Pigeons Wire. Archive
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