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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 with a sense of humor, 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
Law of Supply and Demand Repealed (3/12/02) Lately, Doc has taken to paying closer attention to what Charles Biderman of Trimtabs.com has to say about the market. His approach makes sense, it has resulted in some good market calls. Here's a quote from tonight's SeeBS.Markethype, which at least makes an effort to report the few bearish forecasters out there.: Trim Tabs noted that corporate investors turned "horribly bearish" last week in the face of bullish government statistics. The fund flow and liquidity tracker said the net change in trading float of shares grew dramatically. "The trading float grows when either companies or insiders sell never before traded shares. The trading float shrinks via stock buybacks and cash takeovers," Trim Tabs explained, pointing out that new offerings of $4.6 billion late week trounced the meager $497 million of new cash takeovers and $235 million of stock buyback announcements. "Corporate investors are bearish and Wall Street market strategists are bullish. There is no doubt that corporate investors have a much better record of predicting the future," the firm concluded in its latest research note. Still the market again staged a late day comeback from the disastrous telecom news which sent it reeling on the open. There was no downside follow through as the lows were set in the first 15 minutes. Once again, the stage managers were able to get the Dow jokes Inflatables floating again, and the rest of the market tried to follow. Even the Nasgap staged a last minute recovery off its lows. But the gap down in the morning still left a rare Floating Turd chart pattern on the hourly chart of the index.
The late rally carried the Dow to a plus close, pushing the 6-7 week centered moving average projection out to 10,800. The back of this uptrend ahs yet to be broken, as the Turdy Thirty version of the 1970's Nifty Fifty, continues to levitate.
SPX Charts The VIX, a sentiment indicator based on options volatility, closed at 21.39, down from 22.37, continuing a string of readings indicting high levels of complacency, which is nothing we don't already know. Doc does not give much weight to sentiment indicators for timing purposes because it's impossible to know what is extreme, and how long the "extreme" will last. If this is a new bubble, then the readings we are seeing are not extreme. We can only know when they are, after they have turned. The majority is always eventually wrong, but just when will "eventually" rear its ugly head? Price and price based indicators are always the final arbiter, and they are still pointing up. We are looking at major negative divergences, so that assuming this thing turns before the divergences are resolved, these rallies have been nothing more than major distribution. Looking at the chart, there may be one more little squirt left in this thing that should finally exhaust the process. |
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All of the cycle indicators are headed up. The cycle indicators may be signaling a "sideways up phase", i.e. a trading range within longer term waves that are almost flat, with prices at the top of the wave bands. A breakout above the December January highs would be needed to indicate an upward slope in the 12-18 month cycle. It has been in an up phase since the September 2001 lows. This is a mature cycle, and the current action smells more like a blowoff top than a major bear market bottom. The SPX has some serious resistance to contend with in the 1180 area, and much of the demand has already been absorbed in the panic. We also should be on the lookout for a WHOPsaw, where the market's stage managers engineer a breakout to suck in the last of the stragglers before dropping the curtain and leaving the audience in the dark muttering, "Hey wha' happened?"
This chart clearly shows where this market is coming from.
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 3/12/02
PTT - Periods Till Turn Nasdaq Charts The six month cycle oscillator has turned up. But it may only be a sideways up phase, the kind that precedes a big selloff. Short term cycles are near a high and centered moving average projections are now grouping around 1950-75. Where are the shortest cycles? The 8 and 13 day cycles are mixed. They cancel each other over the next 2-3 days. A flat market at this point would give the tops in the 4 through 10 week cycles a chance to form, allowing the rally to be reversed in its entirety over the next couple of weeks. A very iffy scenario, but increasingly likely if the market makes no further progress from here.
Here's a linear regression channel dating back to the highs of February 2001. Interesting fit
The Nas Fiber Nacho regurgitation chart shows that 1950 is a 61.8% reflux.
Nasdaq Cycle Conditions as of 3/12/02
PTT
- Periods Till Turn Bork Attack! As we all know, the act of borking is what happens when a borkerage firm, analcyst, shill pumps a stock after the borkerage's trading arm has accumulated a ton of it, either by design, or by accident. Invariably, the borking itself causes the stock to top out, because everybody who had even the slightest inkling to buy the stock, panics, and they all jump in all at once. Goodbye, pent up demand, if there even was any. The result is always the same. You get screwed, or borked, because the guy managing your retirement finds is either too stupid to know better, or he does and doesn't give a crap, because, after all, it ain't his money! Doc will check back on these borkings every so often to illustrate the aftermath. Remember, ladies and gentlemen, stock borking is what borkers do. It's their business. Accumulate inventory, mark it up and move it out, just like any other retailer or wholesaler. They make money the old fashioned way, advertising, PR, and salesmanship! Which brings up a thought, perhaps the greatest borking of all time was when the NYSE's third largest specialist firm, Meehan, managed to bork itself to the dumbasses at FleetBoston at the top of the bull market! The deal was negotiated in late 1999 early 2000, and closed in July 2000. Now that was a borking for the ages! No Bork Report tonight. Stay tuned for Wednesday's edition. Golden Stool The gold stocks remain in a short cycle down phase as they approach an intermediate cycle low in the next week or so. This trend has it's wiggles, but basically it's solid gold.
The cost of capital is rising. The 6-7 and 10-13 week cycles in bond yields are heading up. The 6 month cycles turning up. Expect to see the 10 year Treasury yield rocketing toward 5.75%. That will make stocks even more insanely overvalued.
The dollar rallied off the channel line, then closed near its low Tuesday. We'll have to see if it can hold within the channel or whether the downside mo rules. Talk about the Dollar on the Stool Pigeons Wire.
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)
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