The Anals of Stock Proctology

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

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. As always, the Anals' Editor will be none other than the world famous founder of the study of Stock Proctology, Dr. Stepan N. Stool PHandD. 

The Anals will be replacing the nightly and weekend updates of the major stock indexes.  In the future, you'll be able to get your nightly stock proctology report in one convenient, uncluttered page, right here on Capitalstool.com.  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
Chairman of the Department of Stock Proctology
A.S.S. Endowed Chair
American Society of Shortsellers Endowment
American Academy of Stock Proctology

December 30, 2001

New Year's Eve Swoon (1/1/02)

The Nas and SPX swooned Monday, on the eve of the New Year. Of course, the bulls were not  at all concerned. "Tax selling," they said.  Indeed, if that was the case, why did the year's strongest stocks also take it on the chin. I guess they were taking profits to offset the losses. Your stock proctologist has but one thing to say about the poodits' explanation. "Tax selling, my ass!"

Happened to catch Fat Bastard on Nightly Business Report on PBS tonight. What a lying piece of crap that guy is. He never changes. No shame, no shame at all. Guess what. He's bullish. He and 99.9% of  the Wall Street crowd are all saying exactly the same thing. How can that be? In the last couple weeks, I don't think I've heard a single poodit who hasn't said that the market bottomed in September, and that they expect a second half recovery, and that the market will be up 10-15% this year. Honestly, I haven't heard one. The ability of Wall Street analcysts and strat-ego-ists to think, to say nothing of think independently, is mind boggling. Bull! It's all bull. The reason they all say the same thing is because they think no one will blame them if they look back in six months and can say, "Gee, nobody saw this coming." 

Scumbags.

Now it seems, prima facie, that Wall Street is as close to 100% bullish as you can get. As I recall, we saw the same thing after the Treasury pulled it the disappearing 30 Year Bond trick. The entire Wall Street community was bullish on bonds. What happened next? The bond market fell apart. Stocks will be no different. Now that the yearend nonsense is over, the fuse on this bomb is ticking, and it could go off at any time.

So, meanwhile this Susie Gharib chick says to Fat Bastard, "Well what about the fact the people don't trust you freaking analcysts any more, because you suck so bad? And Joe, I mean Fat Bastard, says, "You gotta look at the big picture. Like if they didn't lose more than what they woulda lost on their own, then we strat-ego-ists have done our jobs." 

Yeah right. A blind monkey shooting darts out of his ass could have done better than you did, you fat lying pig. You buried people. Gotta hand it to Joe though. Since all his old clients are now dead meat, he's out there hustling up the new ones like there's no tomorrow. Only with him, there's no yesterday. And what do you think Bastardpiglia is recommending now? Intel and LSI Logic are his top picks. So if you want my top short sales for 2002, there you have it.

As for the market. This is the worst I've seen it yet. There's just no other way to put it. Overbought, weakening mo, and wildly bullish psychology. This is a market that is completely unhinged from reality, and reality is about to rear its ugly head. 

Here's a chart I think speaks volumes. Yeah it's a little busy, I know. And I'm sorry to do this to you while you're still recovering from your hangover. Just take your time and wade through it.

Chart Powered by METASTOCK  (Sorry about the bull.)

The blue regression channel is the up phase of the 12 month to 18 month cycle. In spite of the fact that it had a mildly negative slope, we know it's an up phase because it's more positive than the slope of the long term trend regression channel in the light gray outlines. That up phase is in its final stages. The 6-10 month cycle is topping out. Cycle configs are pretty similar to where they were last June. Except for one big thing. The market is far more overextended now than it was then. You can tell by the position of prices relative to the regression channels, and by the extreme level of the 5-10 month cycle line.

If that chart's too much for you tonight, here's one a little simpler.

Chart Powered by METASTOCK  (Sorry about the bull.)

The idea's the same. The intermediate uptrend is kaput, and the first stop is a retest of the low. That's the first stop. After a bounce, it'll get worse, but that's then, this is now.

Nasdaq Cycle Conditions as of 12/31/01

*SWD= Sideways Down Phase- Trading Range
  SWU=Sideways Up
  p: preliminary

Do things look any better with the SPX. No. Another disaster waiting to happen.

Chart Powered by METASTOCK  (Sorry about the bull.)

Chart Powered by METASTOCK  (Sorry about the bull.)

SPX Cycle Conditions as of 12/31/01

*Sideways Down
  p: prelim

Well, it's late and I was going to take the night off. So much for that. See you in Intraday Stool. 

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12/30/01