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The Anals of Stock
Proctology
Published weeknights by
8:30PM Happy Acres, Florida Time
Weak End Edition Saturday Afternoon
The American Academy of Stock Proctology and
the American Society of Shortsellers
Dr. Stepan N. Stool, A.S.S. Chair
Dr.
Stool will be traveling from June 29 to July 14. The
Anals will not be regular during that time. An abbreviated version of the
nightly commentary will be published when internet access is available. Doc will post a message on the Stool Pigeons Wire on days
the Anals will be published. Intraday updates will not be published.
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From The Road (7/2/02) Here's
a capsule summary of the indexes, with updated cycle summary charts. I
wrote yesterday, "there's
no real sign of a crash, but a down day today could mean the rest of the week
will be soft."
Let's make that, "real
soft." I'm likely to be out of touch until Friday but will
check in if access is available.
Dow Inflatables
The
Dow dropped to the center of its downtrend channel. The 8-13 day cycle is
still in a sideways up phase but the
4-5 week and 10-13 cycles are still down and the 6-7 week cycle
looks toppy. The 10-13 week cycle projection remains 8650.
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Portfolio Sphincters Index (SPX)
and Sentiment
The 17 day rate of
change, which represents the 6-7 week cycle, remained stuck in a
trough.. The 6-7 week oscillator
superimposed on the price chart, continued rising suggesting a sideways up
phase that could lead to even greater weakness in the weeks ahead.
The 10-13 week cycle oscillator
(navy) continued declining. This indicates that we haven't seen the 10-13
week cycle low yet. The final downleg may be getting under way. The
projected low ranges from 900 to 935.
The 29 day rate of change
fell to a new low. This indicator should stabilize and
turn up ahead of price when the 10-13 week cycle bottoms.
The VIX
rose to 30.56. On the inverted scale chart, VIX remains in the
center of the channel. At a major low, extreme fear readings
normally persist for several days. A buy signal will not be generated
until the index drops below the blue band for several days and then reverses.
The blue channel lines are the extension of a linear
regression channel from the February and May 2001 highs.
The 6 month cycle
oscillator is still drifting lower confirming the downtrend. The trading
stoolicator is still signaling a downtrend. The short cycle oscillator
downticked signaling the end of the short cycle swup. The 10-13 week cycle oscillator
downticked and the trend remains down. The low is due anywhere from 6 to
21 days from now in the low 900s.
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 7/1/02
Cycle |
Phase/PTT |
Target |
6
Month |
Down/2-5W |
900-910 |
10-13
Week |
Down/6-21 |
935 |
6-7
Week |
Top-Down/19-24 |
915 |
20-25
Days |
Top-Down/7-12 |
915 |
8,13
Day |
Down/1-4 |
910-930 |
PTT - Periods Till Turn
L-Low,
H-High
SWD=
Sideways Down Phase- Trading Range
SWU=Sideways Up
p: preliminary
Too Early: Too soon to project
Nasgap
Charts
The 10-13 week cycle
oscillator downticked and is still in a downtrend. The trading stoolicator
is still declining. The short cycle oscillator turned down, signaling the
end of the sideways up phase. A low of 1250 is due in 7 to 27 trading days.
Nasdaq
Cycle Conditions as of 7/1/02
Cycle |
Phase/PTT |
Target |
6
Month |
Down/3-6W |
1225 |
10-13
Week |
Down/12-27 |
1260 |
6-7
Week |
Top-Down/18-23 |
1250 |
20-25
Days |
Down/7-12 |
1250 |
8,13
Day |
Down/1-4 |
1340 |
PTT
- Periods Till Turn
L-Low,
H-High
*SWD=
Sideways Down Phase- Trading Range
SWU=Sideways Up
p: preliminary
Too Early: Too soon to project
AM
Edition Features (Previous)
Long
Bong Hit -Returning July 15
Suctor
Watch - Returning July 15
Stoolwethers
- Returning July 15
Stock
O'der Day - Returning July 15
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Uncle Buck's Illness
Returning July 15
Golden
Stool
See you in Intraday
Stool.
Dr. Stepan N. Stool
Chairman of the Department of Stock Proctology
A.S.S. Endowed Chair
American Society of Shortsellers Endowment
American Academy of Stock Proctology
Let me know what you think 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
5 days- 40 minute bars
3 days- 24 minute bars
2 days- 16 minute bars
1 day- 6, 7, or 8 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.
ABBREVIATIONS:
cma: centered moving average
cmap: centered moving average projection
os or ozzie: oscillator
sto: stochastic
swup: sideways up phase
swdp: sideways down phase
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