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Portfolio Sphincters Index (SPX)

Nasgap

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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 Intraday updates will not be published.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.


All of Doc's charts are powered by METASTOCKMetaStock Technical Analysis software!.  (Sorry about the bull.) You've seen the software advertised on TV. 
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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


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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

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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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