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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. (Just kidding, details to follow.) Warning - If you are not an experienced, independent, investor/trader, capable of forming your own opinions, and making your own decisions, PLEASE LEAVE THIS WEBSITE NOW! Like all poodits, Dr. Stepan N. Stool, the stock proctologist, takes no responsibility for anything, especially if you happen to agree with him when he's wrong! Please See Disclaimer 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. Some time between now and March 15, 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 used on the Capitalstool front page 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 for a 3 month trial and $74 per year thereafter, in honor of the great bear markets of the 20th century. As always I thank you for your support, and I look forward to many prosperous years working together with you. Dr. Stepan N. Stool February 19, 2002
THAT was hard to ignore. Like getting punched in the nose. The evidence of an intermediate up phase that could last several months is building. The bear is hanging on by the skin of its teeth, and needs a reversal day on Tuesday. Monday was a disaster for the bear case technically, as all shorter term cycle and momentum indicators strengthened, and the 6 month cycle oscillator on the Nasdaq turned up. Short term indicators say a top is imminent, but centered moving average projections point to highs of 1160-70 on the SPX, 11,000 on the Dow, and 1900 on the Nasty. Numbers like that will kill off a lot of shorts, one of whom Dr. Stool knows intimately. All hourly and shorter term oscillators are extremely extended but they refuse to roll over. That, ladies and gentlemen, is bubble type behavior. That's what makes this so scary. I don't know what benchmarks to use. Are we still looking at a bear market or has the bubble been reflated. The latter seems more probable at the moment. In that case, there's no such thing as overbought. Buying was across the board, as the intraday charts show. The market closed virtually on the high tick. Tuesday is literally the key to the next two to three months.
SPX Charts The VIX, a sentiment indicator based on options volatility, closed at 22.08. What is worrisome is that this indicator has been trending for six months. It's no longer possible to make the judgment that a VIX in the low 20s is extreme. This is the problem with all sentiment indicators. Extremes vary depending on market environment. The indicator many traders look at for answers, itself becomes a question. Which is why price must always be the final arbiter. At this point it looks as though the mania has reignited. But the picture still looks like last summer when a 7 day, 50 point rally ending with VIX at 22.26, was the last before the August September swoon. The current rally has gone 6 days and 56 points, and VIX has reached 22.08. It is bigger, has taken less time, and momentum is stronger. The final shred of hope for the bear case is the downtrend channel line at 1140. Expect a massive assault on that line and at least a temporary break that appears decisive. |
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This 10-13 week cycle up phase which 2 days ago looked like it was going to be a sideways up, leading to a sharp down, has changed its stripes. It has now broken the upper bands of descending long term channels. That is exactly what happens at a selling climax at the lower bands, and has happened during upside blowoffs. Is that what this is?. We'll know by Wednesday. The short cycle oscillator has reached a level consistent with a short term high, but that's not enough. If the gains are consolidated, rather than immediately reversed, the only cycle fit would be a rising long term cycle channel in the direction of the dotted lines on the chart. The 10-13 week cycle high is due at any time over the next 2 weeks. The centered moving average projection for that cycle is 1170. That will be reached, but for the cyclical bear case to remain alive it must be reached in the context of a reversal day.
The market either turns down by the end of the week, or the slopes of these large channels begin to be altered significantly. At this point, the 6 month cycle oscillator still has not confirmed the upturn, but it will unless the rally falls apart and does so quickly.
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 of the market. SPX Cycle Conditions as of 3/4/02
PTT - Periods Till Turn Nasdaq Charts The six month cycle oscillator has turned up. Will the up phase head sideways or up? Short term cycles are near a high. If the down phase is not down in real terms. Katy bar the door.
Time series analysis confirms that the intermediate cycle phase is now up, but it's too early to determine the slope. The Nas is weaker than the rest of the market. A flat up phase is possible, but if the longer term oscillator (navy) turns higher from above the zero line the move could be explosive to the upside. So a great deal rides on what happens Tuesday and Wednesday. A reversal day is an outcome devoutly to be desired by bears. Otherwise, it's going to be a long, cold, dark, and lonely spring here at the Stool.
The 38.2% retracement level has been breached. Next stop is 50% at 1900, unless they reverse immediately.
Nasdaq Cycle Conditions as of 3/4/02
PTT
- Periods Till Turn Golden Stool The gold stocks remain in consolidation, preparing for the next move up in preparation for the coming hyperinflation. Asset plays look like they will lead the way, as the Fed's hyperinflationary monetary policy comes home to roost.
Long Bong Hit The 6-7 and 10-13 week cycles in bond yields are turning up. The 6 month cycle has been in a down phase for three months. That resulted in a trading range and it is ending. Bond yields appear ready to stage a powerful move up which could send 10 year Treasury yields rocketing above 5.5%.
The Stock Proctologist's Bottom Line The bear may be breathing its last. It has one, at most two days, to regain its footing and reassert its dominance. Otherwise intermediate and longer cycles are indeed turning up. A reversal day is an imperative. It will not be enough to simply stop the advance. Prices must retrace back within existing downtrend channels or they will head higher over the next few months.. See you in Intraday Stool. Let us know what you think on the Stool Pigeons Wire. Archive |
![[Most Recent XAU from www.kitco.com]](http://www.weblinks247.com/indexes/idx24_nasdaq_en_2.gif)
![[Most Recent XAU from www.kitco.com]](http://www.weblinks247.com/indexes/idx24_sp500_en_2.gif)
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