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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 Where Have All The Bears Gone (1/3/02)
Long time packing. That's where. No surprise, the bulls took the indexes up through major trendlines, and kicked off a wild stampede in the process. They were helped along in great measure by panic stricken bears in full crapitulation mode. Some even went so far as to swear off ever trading again. (ahem). The Nas tacked on 65 to close at 2044, with hardly anything all day that could be called a downtick. The Sphincters were only able to gather up enough steam for a modest push, a mere 10.65, to close at 1165. There were a couple of minor pullbacks during the day to as low as 1156. While both indexes did break major downtrend lines, driven largely by that mindless stampede in tech, neither made a new high. Nor did the Dow, but barely. So, which came first, the mindless stampede, or the trendline break. Let's just say the breakout added to the mindlessness. Is this the beginning of a new bull phase, or one of history's great sucker plays. We might know the answer to that Friday, but at this point I don't know. With 50 bil from the Fed in the last week, anything can happen, and usually does. Even is a lot of that is sopped up by JP Enrontino and Co., a lot of that money may have nowhere to go, and could therefore end up chasing rising stock prices, just like dogs chasing their tails. Institutional madmen and momentum traders don't give a crap about bad news or valuations. They care only about one thing. What's moving. If there's any loose change floating around, you can bet they'll spend it. Cripes, it ain't their money, so who cares? If they mange to break out to new highs on Friday, it doesn't mean anything unless they close there. We all know what buying climaxes look like, and this could be the day. A huge upside move in the morning, followed by a late selloff to unchanged or worse, would signal the end. Otherwise they could go a lot higher, as indicated by worst case, intermediate centered moving average projection of 2250 on the Nasty. This does not have to happen, but unless we get that reversal day, my guess, at this point, is that it probably will. Here's the oogly picture.
The cycle chart, on the other hand, suggests the Nas could blow up to 2100 or 2150, albeit briefly, and not disturb the cycle projections.
Here's another view suggesting the rally was not as significant as it looked. For now at least.
Here's a great view of the trendline break on the SPX, while at the same time, the VIX indicates the super complacency usually associated with at top. Momentum indicators still suck. This is what chartheads like to call a negative divergence. Negative divergences don't mean a heck of a lot, unfortunately, until the market actually reaches a double top or new high and then turns down. Sometimes the divergences resolve in the upward direction, but when they don't and the upswing stops, that's usually a reliable sell signal.
The cycle picture on the SPX also suggests that nothing's changed. An up day Friday might do it, but the burden of proof is on the bulls to sustain the rally. I don't think they can.
Nasdaq Cycle Conditions as of 1/3/02
*SWD=
Sideways Down Phase- Trading Range SPX Cycle Conditions as of 1/3/02
*Sideways
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