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10 Minute Bar Charts 4/16/02 Dow Jokes Inflatables
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
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The Anals of Stock ProctologyPublished 5 times
per week by the American Academy of Stock Proctology and Monster Truck Rally- Get Your Programs Here! (4/16/02) The boys came down hard on the bears after setting us up perfectly by dropping the Dow to a new low the day before. We saw the warning signs in the six week cycle oscillators on the SPX and SOX, but were lulled to sleep by the dumping of the market's biggest bellwethers. Unfortunately for bears, the weeks of selling, culminating with major dumping of IBM and GE created enough liquidity to trigger a stampede when a couple of tech stocks met or beat earnings expectations. That, of course, was just the excuse. The simple fact was that it was just time. The 6-7 week cycle has operated like clockwork in recent months. After so many weeks of net selling, portfolio sphincters reverse course and become buyers. The cash they raised is just burning such a hole in their pockets, they can't stand the heat. Heaven forbid they should get up to 6% cash. Then, when all the big institutional computer programs see the same thing at the same time, we get instantaneous adjustment. That lasts for two days. There's no follow through because all the programs moved the first day, and the unprogrammed sphincters panic the second day, and then it's over. Doc doesn't know if the same thing will happen here, but that's been the pattern, and there's nothing here to suggest this is a big fat bottom of some kind. It's just the mania, rearing its ugly head yet again. For now most signs point to the market only going a little higher for a little longer, and the way the after hours session went tonite on Intel making its numbers, we might see all of it on the opening.
The Dow Jokes stage managers got us. Doc thought they had lost control, but the last dip to new lows was instead a masterful setup. The specialists accumulated enough longs Monday, and over the last 9 days, to position for a stampede, and they got it. As impressive as it was, it didn't break the downtrend, and the 10-13 week cycle oscillator didn't turn up. It's at the same level it was at the February low. The Dow is 1/4 phase ahead of the rest of the market, and this being 55 days from the last low, we need to be careful. If the 10-13 week cycle turns up, the chop will have an upward bias. If it doesn't, then expect more of what we've seen over the last month. Either way it will be gut wrenching. Portfolio Sphincters Index (SPX) and Sentiment The VIX closed at 20.3, down from 22.38 Tuesday. Low option volatility complacency continues, and as long as it does, this down-up-down grind can continue indefinitely. On the inverted scale chart, VIX whipsawed back into the top signal band, which means the rally probably isn't sustainable for more than two days. The last big short term rally came from the 27-28 area. At the rate we're going it will take weeks to get even there, and a big intermediate swing rally probably won't come until the index is well above 30. The 17 day rate of change, a proxy for the 6-7 week cycle, finally turned up, barely. The 6-7 week cycle oscillator superimposed on the chart gave an early buy signal last week and continues to rise. These signals can be a little early or a little late, but this signal gave plenty of warning that a rally was on the way. The timing wasn't the surprise, the size of the rally was. Now we need to watch for an early downturn in this indicator. The 29 day rate of change, representing the 10-13 week cycle, is still heading down. This cycle should limit the size of the upturn in the 6-7 week cycle, but if the 10-13 turns up, we're looking at something much bigger than a two day wonder rally. Hypothetical at this point but, as always needs to be watched. The blue channel lines are the extension of a linear regression channel from the February and May 2001 highs.
The rally hasn't changed the configuration of any of the cycle oscillators. If this is more than a brief counter trend rally, the indicators aren't telling us yet.
The rally ran up to the 38.2% fiber nacho reflux point. 1137 would be a 50% retracement.
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 4/16/02
PTT - Periods Till Turn Nasgap Charts This looks like a classic return to the scene of the crime, where the market first breaks a key support level or trendline, generating a lot of technical selling. The market makers get loaded up long, and the market "magically" rallies back to the breakdown line a week or so later. This is the 6-7 week cycle upturn Doc almost gave up on. Given Intel's action tonight, the market will probably open at the top of the red channel and spend the rest of the day in a battle to hold those gains. There's no sign of an important trend change here. On the outside chance the market advances and holds gains again tomorrow, that might project into something bigger.
The rally surpassed the 38.2% regurgitation level. Next is 50% at 1835, then 1862. Definitely enough to make you sick. Perhaps the 1810 level will have a magnetic attraction.
Nasdaq Cycle Conditions as of 4/16/02
PTT
- Periods Till Turn Sucktor Watch Dirty Dirty SOX The rally
Doc's been worried about showed its ugly face. But he continues to see it
in the context of slot rattling, wild racing back and forth in a range
made thin of both bids and offers by so many crossings. There's going to
be another huge gap on the open, and the SOX will make a run at the highs,
but so far this looks like a flash in the pan. Stool Request Line Stock O' The Day - EMLX This one was
sent in by stoolie K Wave Rider, who said "Ridiculous P/S valuations
(9 & 12) in a commodity type industry. Remember 3COM in its
heyday?" Doc doesn't know from valuations, because stocks like this
trade independently of funny mentals and more on how much float is
available to buy and sell, at least until something really terrible
happens to trigger a stampede by the institutional elephant herd. As of
3/15 EMLX had 9.4 million shares short. The stock has 81 million shares
outstanding and 62 million in institutional hands. The sphincters like to
have fun squeezing the shorts with those kinds of numbers. Let's see how
this one does as it tests the upper channel lines. If the oscillators
start to roll over as the price tests the upper channels, that would be
the time to short it. I still have a few Stock'O's in the queue, but if you have an idea for one, send it to [email protected]. Include some original reason for why you think the stock is deserving. Be clever! Anything longer than 25 words- automatic disqualification! And please, no penny stocks. Stoolwethers- Intel After the
bell, the sphincters got all hot and bothered as Intel hit its earnings
forecast. The red bar shows the after hours action. There's no sign that
this turn is significant, yet. Golden Stool Gold stocks continued to correct. The process should last several weeks, but should be shallow with good trend support in the low 90's. The short cycle oscillator is in position to form a low over the next two or three days.
Long term
bond yields have been correcting for a couple of weeks. The moment of
truth has arrived, with yields back to the uptrend line. Yields rose
Tuesday and short cycle oscillators look "bottomy". Bond yields have tended to cycle every 4 to 6 weeks.
They're due to turn up, and the trendline could act as a springboard. So
far, no signals, but another strong uptick on Wednesday would probably do
it. . Uncle Buck's Illness Good Ole
Uncle Buck. He's a regular old yoyo, ain't he? He's headed for a breakdown
one of these days. He needs to break 117. See you in Intraday Stool. Dr. Stepan N. Stool Let me know what you think on the Stool Pigeons Wire. Welcome To New Subscribers Welcome, and thank you for subscribing to the Anals of Stock Proctology. You may note some subtle differences in style now that this is no longer a free service. The perspective is still bearish, but it will have a more balanced approach than my message board ravings. You won't see me screaming "BUY" about anything except perhaps gold, but you will see stronger indications of areas and times when I think it might be a good idea to avoid being short. And I promise that I will lose my temper from time to time to keep you entertained! There's also a new feature, Doc's By Request Stock O' The Day. If you have a stock you're interested in, send an email to [email protected], naming the stock, and why you think Doc should look at it, in 25 words or less. 26 words, and you're disqualified! Those that look interesting, Doc will try to feature here within the next day or two. If you have suggestions about other features you'd like to see, send them along to [email protected]. Again, thanks for subscribing!
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