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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. On or before April 1, 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. 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 The Anals will be accessible by subscription only on April 1. The subscription form will be posted a few days earlier, but there is no mechanism for pro rating if you subscribe early. To receive the full term, do not subscribe until April 1. When you subscribe through Paypal, you will immediately receive a user name and password which will allow you to access this page. If you have previously sent a donation through Paypal, and you would like a complimentary subscription equivalent to the amount of your contribution send an email to [email protected]. Include your name, your email address, and if possible the date of your contribution(s) through Paypal. Upon confirming your information, I will send you a user name and password. Allow 1 week for processing. By requesting and accepting a complimentary subscription, you are agreeing that you have read and agreed to the Terms and Conditions, which basically says that you can't sue Dr. Stool, or Capitalstool.com, or its owner, no matter what! Finally, for you luddites who refuse to use on-line payment, you can subscribe by mail. The annual subscription rate for payment by check is $99.00. Print the subscription form at the bottom of the Terms and Conditions and mail it in to the address on the form, with your check, of course. I will email you a user name and password. Allow 2 weeks for processing for payments by mail. Thank you for your support. Doc
Wall Street Scratches Its Backside (3/13/02) They are turning the corner folks. Even Wall Streets most ardent bulls are recognizing that stocks are "slightly" overvalued. In the real world when a Wall Streeter says "slightly" overvalued, what they are really saying, is "How did this crap ever get this high? Even we know it's not worth this much." Meanwhile they are scratching their heads and thier behinds trying to figure out how this happened when the answer is very simple. Two weeks ago, the whole world got short as the market approached a breakdown through major support levels. With the public shorting heavily, and loaded up to the gills with short positions, the market makers and specialists found themselves light of the short positions they needed for what they knew lay ahead. And rthey saew easy pickings, what with all us rubes (ahem) short up the kazoo. So what did the market makers do? They started buying. It was like lighting a fuse to a munitions dump. The huge public short position blew. By last Friday, Fed calls went out over the face of the firmament, and by Monday, that massive short position had been wiped out, with that short position now in the hands of the market makers and specialists. Now there is no more demand. And the professionals are prepared to let the market fall. Then there's the fact that the Feed has stopped feeding. Virtually no repos from the Fed this week. They are passively draining reserves! Doc has been warning for months that it would come to this, that the bond market would not allow further pumping by the Fed. The stock market cannot be sustained at these levels without that support. We are about to see what happens when it is withdrawn. Last but not least was the news form the Mortgage Bonkers Association that mortage apps dropped liek a stone last week. The mortgage bubble is the only thing that has kept financial ship floating. As that bubble deflates, the ship will sink. The Dow's 6-7 week cycle centered moving average projection dropped back to 10,650, which has already been reached. While there is not yet confirmation from momentum indicators that the uptrend is over, another down day will do it.
SPX Charts The VIX, a sentiment indicator based on options volatility, closed at 21.97, up from 21.39, continuing a string of readings indicting high levels of complacency, in spite of the selloff. 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. 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. The resistance at 1180 is beginning to look more and more formidable, and when the 17 and 28 day rate of change oscillators turn down, a reversal will be confirmed. That may come tomorrow, or in a week, but it is coming. |
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Intermediate cycle indicators are still headed up, but short term cycles are topping out. A symmetrical parabolic cannot be ruled out, with the decline as violent as the advance, or even moreso. 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 recent rally 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.
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 3/13/02
PTT - Periods Till Turn Nasdaq Charts The six month cycle oscillator has turned up, but it remains in negative territory and the upturn is weak. This indicates an extremely weak up phae, and it could be a precursor to the complete collapse of the Nasgap a few weeks down the line. Short term cycles are topping out, and centered moving average projections around 1950-75 have been met. The rally to be reversed in its entirety relatively quickly.
There's fiber nachos at 1850 and 1820. Downside short term centered moving average projections suggest that 1850 is as good as history.
Nasdaq Cycle Conditions as of 3/13/02
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 future editions.. 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. A spike down into the high 70's is probable however..
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. In the very short run, yields look liek they may stop rising for a week or two, but that's it.
The dollar rallied off the channel line, and looks like it is trying to establish a short term base for one last hurrah. 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)
![[Most Recent XAU from www.kitco.com]](http://www.weblinks247.com/indexes/idx24_sp500_en_2.gif)
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