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Archives 12/30/01, 1/1/02, 1/2/02, 1/3/02, 1/4/02, 1/7/02, 1/8/02, 1/09/02, 1/10/02, 1/11/02, 1/14/02, 1/15/02, 1/16/02, 1/17/02, 1/18/02, 1/22/02, 1/23/02, 1/24/02, 1/25/02, 1/28/02, 1/29/02, 1/30/02, 1/31/02, 2/1/02, 2/4/02, 2/5/02, 2/06/02, 2/7/02, 2/9/02, 2/11/02, 2/12/02, 2/13/02, 2/14/02, 2/16/02, 2/19/02, 2/20/02, 2/21/02, 2/23/02, 2/25/02, 2/26/02, 2/27/02, 2/28/02, 3/1/02, 3/04/02, 3/05/02, 3/06/02, 3/7/02, 3/10/02,3/11/02, 3/12/02, 3/13/02, 3/14/02, 3/15/02, 3/18/02, 3/19/02, 3/20/02, 3/21/02, 3/22/02, 3/25/02, 3/26/02, 3/28/02, 3/30/02 4/1/02, 4/2/02, 4/3/02, 4/4/02, 4/6/02, 4/8/02, 4/9/02, 4/10/02, 4/11/02, 4/13/02, 4/15/02, 4/16/02, 4/17/02, 4/18/02, 4/20/02, 4/22/02, 4/23/02,4/24/02,4/25/02, 4/26/02, 4/27/02, 4/29/02, 4/30/02 5/01/02, 5/2/02, 5/4/02, 5/6/02, 5/07/02, 5/8/02, 5/09/02, 5/10/02, 5/13/02, 5/14/02, 5/15/02, 5/16/02, 5/17/02, 5/20/02, 5/21/02, 5/22/02, 5/23/02, 5/24/02, 5/28/02, 5/29/02, 5/30/02 6/01/02, 6/3/02, 6/4/02, 6/5/02, 6/6/02, 6/7/02, 6/10/02, 6/11/02, 6/12/02, 6/13/02, 6/14/02, 6/17/02, 6/18/02, 6/19/02, 6/20/02, 6/22/02, 6/24/02, 6/25/02, 6/26/02, 6/27/02, 6/30/02 7/1/02, 7/4/02, 7/5/02, 7/11/02, 7/14/02, 7/15/02, 7/16/02, 7/17/02, 7/18/02, 7/19/02, 7/22/02, 7/23/02, 7/24/02, 7/25/02, 7/27/02, 7/29/02, 7/30/02 8/1/02, 8/3/02, 8/5/02, 8/6/02, 8/7/02, 8/8/02, 8/10/02, 8/12/02, 8/13/02, 8/14/02, 8/15/02, 8/16/02, 8/19/02, 8/20/02, 8/21/02, 8/22/02, 8/23/02, 8/26/02, 8/27/02, 8/28/02, 8/29/02, 8/30/02 9/3/02, 9/4/02, 9/5/02. 9/6/02, 9/9/02, 9/10/02, 9/11/02, 9/12/02, 9/13/02, 9/16/02, 9/17/02, 9/18/02, 9/19/02, 9/20/02, 9/23/02, 9/24/02, 9/25/02, 9/26/02, 9/27/02, 9/30/02 10/1/02, 10/2/02, 10/3/02, 10/4/02, 10/7/02, 10/8/02, 10/9/02, 10/10/02, 10/11/02, 10/14/02, 10/15/02, 10/16/02, 10/17/02, 10/18/02, 10/21/02, 10/22/02, 10/23/02, 10/24/02, 10/25/02, 10/28/02, 10/29/02, 10/30/02, 10/31/02 11/1/02, 11/4/02, 11/5/02, 11/6/02, 11/7/02, 11/8/02, 11/11/02, 11/12/02, 11/13/02, 11/14/02, 11/15/02, 11/18/02, 11/19/02, 11/20/02, 11/21/02, 11/22/02, 11/25/02, 11/26/02, 11/27/02, 11/29/02 12/2/02,
12/3/02, 12/4/02,
12/5/02 1/1/03, 1/2/03, 1/03/03, 1/6/03, 1/7/03, 1/8/03, 1/9/03, 1/10/03, 1/13/03, 1/14/03, 1/15/03, 1/16/03, 1/17/03, 1/21/03, 1/22/03, 1/23/03, 1/24/03, 1/27/03, 1/28/03, 1/29/03, 1/30/03, 1/31/03 2/3/03, 2/4/03, 2/5/03, 2/6/03, 2/7/03
 Doc's view of the Street. |
The Anals of Stock ProctologyPublished weeknights by
8:30PM Happy Acres, Florida Time The American
Academy of Stock Proctology and Is your subscription up for renewal? If you want to renew, do nothing, unless your credit card has expired. Please be sure your credit card info is current. If your credit card has expired, you must enter the new expiration date in your Paypal account in order for your subscription to be processed. If you subscribed via Paypal, your subscription will be renewed for one year on the 90 day anniversary of your sign-up and your credit card will be charged. If you want to cancel, use the button at the bottom of the page. This applies only if you subscribed through Paypal. Mailed-in subscriptions are for 1 year. If you subscribed by prior contribution, I will send you a notice before your subscription expires. If you have any questions, see the subscription page and FAQ's. If you can't find the answer, email me. Big Fine Print Doc does not make trading recommendations. This update reports time cycle estimates and centered moving average projections based on the Hurst cycle analysis method, and other techniques. This publication is for entertainment and educational purposes only. Doc assumes no responsibility for the accuracy or inaccuracy of the estimates and projections presented. The market may or may not meet the projections. Stoolies should thoroughly familiarize themselves with the methodology before trading based on this method. Those who do not have the time or inclination to develop a trading strategy based on testing and research should not trade. Trade at your own risk. Yadda yadda. How's your motha? More disclaimers at the bottom of the page. Intraday Updates 2/11/03 12:30 The 5 hour cycle high came at 11:15. Looking for low around 2 PM. 1 day cycle high was due at 1 PM, so a little reaction upward here is to be expected. 1 day cycle low will be due around 3:30 +/-. 3 day cycle looks to be building a top. 8 day is in a swup. That could end any time, or last another day or two. Chart below. Get regular updates throughout the day in Stooltrading. 9:15 - Fucutures rallied all night but appear to have topped out in the last hour. 1 day cycle high cmap is 843. Probably will pull back after opening around 840, then drift up toward 5 hour cycle high around 11:30 +/- an hour. 3 day cmaps on QQQ 24.35 and Spoo's 845. Intraday Monday - The 1 day cycle low was hit around 11 AM. News noise lit a fuse as the NDX hit a double bottom and a surge of program buying ensued. That peaked on schedule at 1 PM, but the down phase was flat. We are probably looking at early gains tomorrow. Look for some retracement in the first hour, then a weak rally into mid-day. The 3 and 8 day cycles are in a swup. The 3 day cycle high appears to be in the process of forming. Oh, the shallowness of it all! Pre Market Update at 9:15 AM NY time. Get StoolieSignal Special offer here only! The cycle map below is en estimate of how the market might behave over the next few hours. Should the pattern be broken, the map should be redrawn to fit the actual. Cmaps and times shown are guidelines only. Cycles vary in wavelength and amplitude. Directional changes within an hour of the expected turn and a few points of the cmap should be respected. The indicators rule. Times and prices are the projected cycle highs and lows with cmaps. 5-8 Day Cycle______ 2-3 Day Cycle_______ 5 Hr-1 Day Cycle
Monday's
Markets Tricky Tricky But Stocks Are Undervalued 2/10/03 The window for the 6-7 week cycle low is open. That's been the dominant cycle of late, so we bears are vulnerable to a pop, just as stoolie gold bugs got squished the last few days. Because the potential for a rally exists doesn't mean that it will definitely happen. The 6-7 week cycle may want to turn up, but the 4 week cycle is due to turn down. Usually the strongest pops occur when the timing of these two waves is in gear. In a situation where cycles are juxtaposed one of tow things normally happens. Either the market goes dead flat. Or else it swings wildly in a trading range. But it goes nowhere. The 10-13 week cycle remains in a shallow downtrend. This is a market that's going nowhere fast, and will continue to do so for a couple more weeks. About the only way to make money in the short run may be to scalp the intraday moves. Of course, if you shorted when the 6-7 week cycle indicators turned bearish the week of January 13, you can just sit there until the 10-13 week cycle indicators turn up. That could be another month or two. If it comes earlier that's fine. We don't assume. We let the indicators do their job and tell us when. Meanwhile, a big portfolio sphincter is spewing that stocks are under valued. As an old commercial real estate analyst, Doc wonders how one can value something that doesn't pay an income. Stockholders after all, have no claim on earnings, no say in management. All they have is an electronic account entry that fluctuates in price. The idea that stock earnings have some intrinsic value to the stockholder is an illusion. Dividends, perhaps, but no of them pays squat anyway. If they do pay a big one, you can bet they're in trouble. The portfolio sphincters use something called the Fed model to value this illusion. The Fed model is the simple formula I/R=V. That's right, the Fed model is IRV. Irv, meet Al. In this model, I is, of course Income, or earnings per share. Another illusion. Just what are earnings anyway? The earnings we know they have now, or the ones we are wild ass guessing they might have in a year. So they value an illusion based on an illusion about what the future will look like. They even pretend that they know! If truth were to be told, and the corpses expensed stock options, showed their true pension obligations, and honest pension fund growth assumptions, earnings overall would be nil. The next part of the formula is R, or rate. This is the divisor for I, and in the case of the models used by the portfolio sphincters, R is the 5 year risk free rate of return. These clowns subscribe to James the Assman Glassman's theory that stocks are risk free because they always go up. Voila! Dow 36,000. Another illusion. Hey Jim, how about Dow 3600? Even if we allow a couple hundred basis points for risk, and discounted the illusory stock earnings at 6%, (instead of 4% which results in the insane conclusion that a PE of 20 is below fair value) it would still be wrong because it is based on an artificially suppressed level of R. With bond yields at the lowest levels in the history of mankind, do the Fed modelers believe yields are going to stay this low forever. Of course they don't. They just throw this crapola at the sheeple in the vain hope that they can keep them from redeeming their fund shares. Just keep feeding them false hope, on this strange and mournful day. Long live the illusion. Keep hope alive! Two things can happen with yields. They will either go up as the credit crisis grows and risk explodes, or they will go down if we follow the Japanese model. Doc thinks they'll go up eventually, which means that IRV's divisor is going to be heading up. Not good for the Fed valuation model guys, because unless earnings go up faster, they are in trouble. Although you can bet they will have a convenient excuse when the time comes. They always do. Now if Doc's guess is wrong and we follow the Japanese model, that means falling yields will be accompanied by a deflationary collapse, in which case the I in IRV will go negative. With no earnings, it doesn't matter how low I goes. That's when the Nasdog will cease to exist as we know it. All those money losing shell companies that make nothing and sell nothing will disappear from the firmament. That's why stocks are not undervalued. The Fed model is a joke. Stock prices have never had anything to do with valuation. If they did ,we wouldn't have manias, we wouldn't have panics, and we wouldn't have crashes. We wouldn't have a market. Doc's Pooper Scooper. Be a Johnny Applestool! Help spread the Stool! Feel free to repost snippets from the Anals on message boards around the web. Just give a link back! Many tanks - Doc The Feed did a putback with the expiration of $2.5 billion in weekend reverse repos, plus they added $4.75 billion in overnight repos, and $998 million in permanent money via a coupon pass. The result was a net addition of $8.23 billion. Doc expected this following Friday's drain of $10.75 billion. e felt that Al had panicked in the AM on the bond market selloff. Since the bonds rallied strongly the rest of the day, and stocks did poorly, it was an easy guess that Al would reverse most of the massive drain. Sure enough, that's what he did. Al's overreaction brought Total Feed to the bottom of its 6% growth channel, and with today's Feed, it is still in the lower portion of the channel. Bond yields were a little firmer today, and that's where Doc thinks Al has his focus. In order to keep inflation fears in check and stabilize Uncle Buck, he will likely continue to keep the growth of Feed restrained. A push toward the top of the range would probably re-ignite the gold rally, and spur a rise in bond yields. That is the one thing he cannot allow, because it would mean merely the end of the financial world as we know it. An uptick in bond yields will shut down the refi boom, and that will implode the credit bubble which is the foundation of all financial activity. Two
trends are evident on the Feed Index, which is the total Fed holdings of
loans and securities. One is the 10% growth trend beginning in May of
2001. The blue channel going back to last December suggests a 5% growth rate. Look at the 4 week moving
average (brown line) and compare it with the slope of the two larger
channels for an indication for whether the slope of short term growth is
slower or faster than the 2 longer term trends. So Friday's de-feeding was reversed with a huge pump job. And what did it do? Exactly what Doc thought it would. Not much. Sorry folks, move along, there's no jam. The market is toast and you'll have to eat it dry. The
Feedometer theoretically measures excess Feed available for bond or stock
market jamming. Al selects a trend level he feels is needed to reflatulate
the economy. The Feedometer measures the difference between the apparent
trend target, and actual day to day Feeding (Fastow Feedometer), as well
as a four week moving average (Slowmo Feedometer). A break above the
orange trendline might indicate a more aggressive jamming policy. 10 Year Bonds yields rose to near
4%. The sideways range continues. There are hints of an upturn, but nothing solid
yet. The 3.75-4.25 range is likely to hold for awhile as the secular bull market in
bonds builds a major distribution top. Dow Inflatables- The
Dow is within days of a 6-7 week cycle low. Maybe it's there and Doc just
doesn't know it yet. The cmap rose to 7650 from
7550. The 4 week cycle is directly juxtaposed, but the 6-7 week cycle is
normally dominant. We need to be vigilant over the next couple of days. Expect a bounce,
or consolidation lasting a few days, then down again into a 10-13
week cycle low between late March and mid April All of Doc's daily cycle charts
are powered by METASTOCK Portfolio Sphincters Index (SPX) and Sentiment Cycle Chart Short Term Cycles The 4 week cycle has been in a swup for two weeks. The short cycle oscillator is still tacking higher. The usually dominant 6-7 week cycle is juxtaposed, with only 1 to 6 days remaining in the down phase, with a cmap of 820. That's a little too close for comfort to Monday's low of 825. The bottom window is now open for that cycle. The 6-7 week cycle oscillator superimposed on the chart below upticked from a bottoming zone. Normally, in a downtrend, the first signal on that indicator results in only a brief pop, but then price diverges south a few days later. The 17 day rate of change (chart below) remains in a downtrend. The next few days are very tricky as the 4 and 6-7 week cycles cycles continue to move against one another. Without thrust, the market will get whipped around by news-noise. They'll be hanging on Al's every note as he sings to Congress. But over the next week or two, the market is going nowhere. 10-13 Week Cycle Roughly 5 to 8 weeks should remain in the 10-13 week cycle down phase. The cycle oscillators continue to move slowly lower. The one in the top chart is in the bottom zone, but it can bounce around down there for weeks, with the market trending lower. The flat movement below the zero line in the 29 day ROC also indicates mild trending which can go on for weeks. There will be no substantial rally until all of these indicators turn up in concert. By the same token there is no sign of downward acceleration. The preliminary cmap for this cycle has been oscillating between 770 and 820 and lately has been sticking around 820. Under the circumstances Doc will be paying closer attention to the 6-7 week cycle indicators, as we did at the top when they gave us timely sell signals. If they all turn up, it might be time to take cover. Sentiment VIX dropped. (up on the inverted scale chart). Doc has redrawn the channels based on his best guess following the recent action. In the context of this trend, the current reading is neutral. The next significant intermediate cycle low should reach at least 50-60.
The 15 day rate of change is a proxy for the
4-7 week cycle. The 29 day rate of change is a proxy for the 10-13 week
cycle. The dark blue overlaid line is the 10-13 week cycle
oscillator, while the red line is the 6-7 week cycle oscillator. The VIX
is a measure of implied options volatility reflecting relative fear or
complacency. It is plotted below on an inverse scale to better show the
relationship to the price chart. The "Stool Bands" may reflect
either 6 month or 10-12 month cycles. The Cycle Conditions tables include cycle phase and 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. This is a fluid exercise, in other words, the projections are likely to be wrong, but they force us to be vigilant for key turning points, and frequently work well enough to prevent costly misreadings. SPX Cycle Conditions as of 2/10/03
PTT - Periods Till Turn Suctor Watch and Stoolwethers- Updated each morning between 8 AM and 9:00 AM NY time. Nasgap Charts The Nas is expected to behave more like the SPX with the continued de-weighting of tech. In the interest of publishing the Anals earlier in the evening Doc is presenting the charts and data without commentary, as it is largely redundant relative to the SPX commentary above. Cycle Chart Nasdaq Cycle Conditions as of 2/8/03
PTT
- Periods Till Turn Suctor Watch and Stoolwethers- Updated each morning between 8 AM and 9:00 AM NY time. Long Bong Hit - See top of page. Golden Stool 2/10/03 PM Gold bugs took a hurtin' Monday. But it shouldn't get much worse. The 4 week cycle cmap is 361 on a closing basis. It's just a well deserved correction. Call it the Jimmy Jones Cramer Memorial Move. Cramer turned bullish on gold the day of the breakout. J. Jones has a habit of jonesing a sector in the last 10-15% of the move. Though this was not the final top, Gold bulls should start to pay attention. The Cramer kiss of death means that the end of this phase of the bull market can't be far off. But since he usually catches the end of a move, there's still time for a good pop. A 4 month cycle low is due any day now. Now matter how powerful an uptrend, the final days of a cycle usually see a profit-taking slamdown. That's what this is. The move needs to consolidate for a few weeks. It was way ahead of schedule, taking on the earmarks of a buying panic in the last couple of weeks. After the late arriving gold bugs get burned, and weak hands get shaken out, it will move up again.
Charts as of 2/10/03 Close HUI's 4 month (or 13 week, take your pick) cycle has been in a sideways down phase for 6 weeks. The end of the down phase is due at any time within two weeks. The selloff probably marks the final stage of the intermediate sideways down phase. Cmaps have dropped to 132. HUI Cycle Conditions as of 2/10/03
Uncle Buck's Illness Comments 2/7/03 Uncle Buck rallied as his 10-13 week cycle swup continued. The upside cmap on the 8-13 day and 4 week cycles rose to 101. Longer term cmaps look like the low 90s by mid year. Chart as of 2/10/03 close Uncle B and SPX (gray line on chart)
usually move together because Uncle Buck's index measures the flow of
capital into and out of US paper assets. The relative magnitude of the
moves varies and wide divergences are followed by convergence.
Central banks intervening to buy dollars are not
going to help stock prices, and cannot drive sustainable advances in the
dollar. Get StoolieSignal Special offer here only! Suctor Watch and Stoolwethers- Now posted on separate page. Updated each morning between 8 AM and 9:00 AM NY time. See you in Intraday Stool. Dr. Stepan N. Stool Share your thoughts on the Stool Pigeons Wire.
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Explanation of Intraday Commentary-Build charts at http://www.livecharts.com. For custom time bars insert a comma after symbol and number of minutes, e.g. compx,90. This will give you a bar chart of the Nas with 90 minutes per bar. The one day cycle is usually most clear with 8 minute bars and 26/18 stochastics. It varies from day to day. Sometimes 6 minutes works best. Experiment to find the best fit for your trading style, and the market's dominant frequency at the time. The goal here is primarily to monitor the condition of the 8 and 13 day cycles. I typically use 90 minute bars with 26/18 stochastics for the 13 day cycle proxy on the indices during regular trading hours. Other cycles use 26/18 stochastics with the following: 8 days- 60 minute bars On the 24 hour futures charts, use a time per bar approximately 3 to 4 times the above number of minutes, to represent the cycles listed above. About centered moving average projections. ABBREVIATIONS: cma: centered moving average |
. (Sorry
about the bull.) 
![[Most Recent HUI from www.kitco.com]](http://www.weblinks247.com/indexes/idx24_hui_en_2.gif)
![[Most Recent XAU from www.kitco.com]](http://www.weblinks247.com/indexes/idx24_sp500_en_2.gif)
![[Most Recent Quotes from www.kitco.com]](http://kitconet.com/charts/metals/gold/t24_au_en_usoz_2.gif)
