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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, 4/16/02, 4/17/02, 4/18/02, 4/20/02, 4/22/02, 4/23/02,4/24/02,4/25/02, 4/26/02, 4/27/02, 4/29/02, 4/30/02 5/01/02, 5/2/02, 5/4/02, 5/6/02, 5/07/02, 5/8/02, 5/09/02, 5/10/02, 5/13/02, 5/14/02, 5/15/02, 5/16/02, 5/17/02, 5/20/02, 5/21/02, 5/22/02, 5/23/02, 5/24/02, 5/28/02, 5/29/02, 5/30/02 6/01/02, 6/3/02, 6/4/02, 6/5/02, 6/6/02, 6/7/02, 6/10/02, 6/11/02, 6/12/02, 6/13/02, 6/14/02, 6/17/02, 6/18/02, 6/19/02, 6/20/02, 6/22/02, 6/24/02, 6/25/02, 6/26/02, 6/27/02, 6/30/02 7/1/02, 7/4/02, 7/5/02, 7/11/02, 7/14/02, 7/15/02, 7/16/02, 7/17/02, 7/18/02, 7/19/02, 7/22/02, 7/23/02, 7/24/02, 7/25/02, 7/27/02, 7/29/02, 7/30/02
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The Anals of Stock ProctologyPublished weeknights by
8:30PM Happy Acres, Florida Time The American Academy of Stock Proctology and Is your subscription up for renewal? If you want to renew, do nothing, unless your credit card has expired. Please be sure your credit card info is current. If your credit card has expired, you must enter the new expiration date in your Paypal account in order for your subscription to be processed. If you subscribed via Paypal, your subscription will be renewed for one year on the 90 day anniversary of your sign-up and your credit card will be charged. If you want to cancel, use the button at the bottom of the page. This applies only if you subscribed through Paypal. Mailed-in subscriptions are for 1 year. If you subscribed by prior contribution, I will send you a notice before your subscription expires. If you have any questions, see the subscription page and FAQ's. If you can't find the answer, email me. PM Update 8/7/02 1:40 PM Terms and methodology Revised 1 day cycle low cmaps Nas 1235 +/-, SPX 853 +/-, and NDX 876. There was so much distortion on the upside, I'm kind of guessing at the "correct" measuring point for the high. Allow some leeway. Still don't have a feel for intradaycyclicality. PM Update 8/7/02 12:40 PM Terms and methodology Making sense of intraday cyclicality today is an impossible task. The current phase is down and or bottoming as I write, and the cmaps are posted below without expected timing, because Doc just ain't quite that smart today, (not that he ever is, but this day even moreso than usual.) Notably the AM cmaps for the highs were right on, but the time targets weren't even close. Doc will take a stab at timings if they become clearer. If the last hours lows are taken out shortly, the 1 day cycle cmaps would only be 10-15 points lower. The 5 day cycle high appears to be in. Too early to tell on the 8 day, but further weakness would probably confirm that too. After what we've seen the last few weeks, the market will now probably settle into a 2% trading range, further frustrating everyone. Where's my Prozac? Doc does not make trading recommendations. This update reports intraday time cycle estimates and centered moving average projections based on the Hurst cycle analysis method. Doc assumes no responsibility for the accuracy or inaccuracy of these estimates and projections. The market may or may not meet these projections. New stoolies should thoroughly familiarize themselves with the methodology before trading based on this method. There is no free lunch. Those who do not have the time or inclination to develop a trading strategy based on testing and research should not trade. Trade at your own risk.
AM Update 8/7/02 9:15 AM Terms and methodology Relying on the fucutures, not always a good idea, it looks like the market will open at or near the projected cmaps for both the intraday and 5 day cycles. But that may not be the end of it, especially if the market holds most of these gains. That would force the 8 day cycle cmaps higher. Doc wouldn't be aggressive about shorting the first high. As far as buying the pullback, it's against Doc's religion to even have those kinds of impure thoughts. Doc does not make trading recommendations. This update reports intraday time cycle estimates and centered moving average projections based on the Hurst cycle analysis method. Doc assumes no responsibility for the accuracy or inaccuracy of these estimates and projections. The market may or may not meet these projections. New stoolies should thoroughly familiarize themselves with the methodology before trading based on this method. There is no free lunch. Those who do not have the time or inclination to develop a trading strategy based on testing and research should not trade. Trade at your own risk.
Random Walk (8/6/02) Doc caught a bit of Crapvision tonight. Portfolio sphincter Greg Hyena Wits says that the market's volatility is the reason investors should buy and hold. Actually, he looks and sounds more like a nervous chimp than a hyena. Where was I? Jim Bianco's Boardwalk Pizza, a small crap value manager, says the market is acting like it should act at a bottom. Yeah, like he knows. Ay, Jimmy, gimme a slice. Then of course there's good old Art Crashin. Art told it like it is. In essence, he said the market was a bunch of crap, driven by futures and ETF hedging, and program trading that's all meaningless in the big picture, specifically blaming hedge fund scalping in the QQQueers, SPY's and Diamonds. He also indicated that he, as a head floor trader for one of the world's biggest borker market maker firms, is getting chewed up by the market, like everyone else, even going so far as to lament that he was short the market. He looked like a beaten, worn out old pro. Doc really likes Art. He is one of the few on Crapvision who actually knows what he's talking about, and tells the truth. Art, we know the feeling. Another one who is a Crapvision regular lately is Arch the Astrologer, who happens to be one of the world's best technical analysts. Unfortunately, rather than focusing on the TA aspects, interviewer Ron Insane likes to focus on the wacky tabaccy astrology stuff. He actually seems to take it seriously, which makes both him and Arch look like boobs in the viewer's eye. Somebody should wake up to the fact that the reason Arch gets it so right, so often, isn't his star charts, it's his cycle charts. At least, Doc thinks that what it is, but I need to check with my psychic to be sure. Meanwhile, the genius financial reporters over at SeeBS.Markethype elicited from their equally brilliant market contacts, that the reason for the rally today is that investors had deduced that the Feed was prepared to cut rates to 1%. That naturally caused Doc to wonder when they would finally get it through their thick skulls that declining interest rates are bearish in a post bubble environment. Here we are, after 11 rate cuts and the market at 40 year lows, and in the worst bear market in 75 years, and they claim that more interest rate cuts are seen as bullish. Doc doesn't see a snowball's chance in hell the Fed will cut rates again, but if the Fed cuts to 1%, you can be sure the market and the economy will be in in very deep doodoo when they do. The poodits who spew this crap are either stoopid, insane or both. Al, at long last, may finally be waking up to the fact that the economy's problems can't be solved by giving it more of what made it sick in the first place, cheaper, easier credit. If he has, you can be sure the participants in these broadcast charades on Crapvision and SeeBS.Markehype will be the last to get the message. Finally, Doc heard Jimmy Jones Cramer on the radio yesterday, taking credit for being bearish for lo these many months. This guy is a pathological liar. He's so sick, he doesn't give a crap if millions of people know it. Monday a caller started out, as they always do, by telling him how great he is, and how he wished he had been listening to JJ months before. JJ, you see, finally gave up and turned bearish on the market a week or two before. But, instead of pointing out to the caller that he had been dead wrong about everything all the way down, JJ said, something to the effect, "yeah, I am great, and I'm hear to tell you the truth." Can you believe that? Well, now that he has finally crapitulated, can there be any doubt that this market is ready to rally? Well, ok, let's not get carried away. The
Feed added $2.5 billion in two day repos. Monday's $900 million coupon
pass settled today, for a total add of $3.4 billion. Nothing is expiring
Wednesday. Total Feed is back within the 10% growth channel, leaving us to
wonder for a few more days if the break was an anomaly, or if Al really
has begun to see the light. The Fed also bought at least $5 billion of the
4 week and 5 year auctions for its own account. It didn't help. The bond
market fell apart and yields surged in the wake of the sales. While the
Fed's purchase is new money which will eventually enter the banking system
when the gummit writes the checks, it is not the same as a direct
Feed through the Gang of 22. The 10 year note auction is Wednesday. It
will be surprising if the stock market doesn't get a bad case of stomach
cramps as a result of all this new paper being sold with minimal
assistance from Uncle Al. The Feedometer theoretically
measures the excess Feed available to the Gang of 22 to jam the markets.
The indicator suggests that the Feed is pulling back gradually from
jamming the markets. It's not to say they're tight, just that they're not
quite jamming.
Portfolio Sphincters Index (SPX) and Sentiment
The cycle indicators suggest that the SPX is in a sideways up phase in the 10-13 and 6-7 week cycle. The VIX is in the vicinity of the level of fear that has marked recent lows, but will not confirm an upturn in stock prices unless it successfully retests or breaks the recent extremes and then turns up. It fell to 45.73. As you can see on the inverted scale Stool Band projection, that is no longer extreme. The 17 and 29 day rate of
change indicators which represent the 6-7 and 10-13 week cycles are
hanging on at weak levels. The indicators need to rise above last week's
peak to signal more of a positive slope in the up phase. Deterioration from here
would indicate
acceleration in the rate of decline. For now, preliminary upside cmaps
suggest a high of 920. The 6 month cycle low cmap has risen to 770. Since
that was almost hit, it's not likely that that the market will embark on
another major plunge any time soon. It should have a neutral to upward
bias for the next month or two. The 6 month cycle oscillator
still has not confirmed a bottom. The trading stoolicator, however looks
"bottomish". Further rises in this indicator should be taken
seriously, should they come about. It While an upturn doesn't
guarantee a big rally, trading the short side against it would be swimming
uphill. The short cycle oscillator is topping out. If the down phase is
sideways, it means the up phase is of the 10-13 week cycle is gathering
momentum for another pop. But it's not clear whether this cycle will
remain in a range or head higher. The odds of a crash are diminishing for
the time being. The entire 870 to 885 area is
a fiber nacho reflux zone. 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 8/6/02
PTT - Periods Till Turn Nasgap Charts The Nas rallied off the 9 day double bottom. Everyone seeing that will do some buying on Wednesday. We will hear more claims that the bottom, at long last, is finally in. It's not, but it may appear that way for a few weeks. The 10-13 week cycle oscillator says the Nas is in a swup. The oscillator has flattened and could go either way. While at negative levels, suggesting a solid downtrend, there's a lot of ambiguity here. Ambiguous indicators reflect vacillation in the market. That's the way it will be, until it isn't.
Take a vacation for a few more days.
It's heavy sledding at 1285 and above. A 61.8% retracement of last weeks
selloff would be just below 1300. (not shown) Nasdaq Cycle Conditions as of 8/5/02
PTT
- Periods Till Turn Golden Stool The 13 day
cycle cmap on HUI is 120. That was hit today. The 6 month cycle low
projection was 90-95. The 10-13 week cycle low projection was 100. The 10-13 week cycle ozzie is signaling that the low is in, but
with the other indicators remaining soft, we can be patient. When the momentum based indicators at the top of the chart
turn up, we can get more bullish. The 10-12 month cycle oscillator
can be expected to lag. We want to see it begin to flatten in the area of
the zero line then gradually turn up. The higher the level of the trough
in that indicator, the more bullish the implications. AM Edition Features (Previous) These features are in morning edition, published around 9 AM ET US, or the Saturday Weak End Edition, published, uh, let's see, Saturday! A perfect double bottom,
with "bottomy" mo and cycle indicators means the low in bond
yields is in. Bond yields and stock prices have moved in the same
direction for a loooong time. Portfolio shifting from bonds to stocks
could drive stock prices higher. Watch the bonds closely for confirmation
of a turn in the next few days. There's no reason, from the charts at
least, not to expect stock prices to continue moving in tandem. Uncle Buck's Illness He is risen! It may not be a bull market, but Uncle Buck is in a one year cycle up phase. The chart is instructive. The indicators pinpointed the turn last month. Note how the Intermediate Cycle ozzie pulled back, but made a higher low above the smoother back in mid July, as price made the ultimate low. The next upturn also turned the long term mo as Buck rallied from 105 to 107. This is a classic pattern. If you see a similar pattern develop in the stock averages, you don't want to be holding short positions. The reverse
head and shoulders bottom is almost too obvious. Meanwhile, this morning,
Buck has pulled back a bit. The up phase isn't over, but we need to see
how it handles the upper channel band. Ultimately, the up phase could run
to 110.50. Biodrech- If
they get through 360, the one year cycle is headed up. It's getting late
in the 10-13 week cycle up phase. A short term top should begin to form,
but there aren't any sell signals yet. Be careful about being short this
group until it's clear this up phase is kaput. Bonkers-
Don't get suckered by the wild volatility. The financials should be
rangebound, with a slight upward bias for the next few months. Con-sumer
stocks have run into resistance, but, like the bonkers, the intermediate
bias is to the upside. This pattern is common across the "old
economy" and defensive sectors. Drugs are
another example of this pattern. Retail- Uh
oh. I wouldn't want to be short this sector any more. Would prefer to
watch from the sidelines with my capital intact. Homebubble-
This is definitely not the kind of configuration I'd want to be short at
the moment. Small Craps-
Looks like they're even gonna resurrect this stuff. Trannies are
also gonna go rangebound for awhile. Ditto for
Energy. SOX- Tech is
still dead, but could have a rigor mortis rally. All tech sectors are
sitting on the bottom of the major trend channels after months of
slaughter. Not the best place for short positions. Too much company. Software-
Potentially dangerous config for shorts in the 10-13 week cycle ozzie. If
it turns up form here, could be a big squeeze. Internet
stocks- (What are they?) Again, caution is in order if you're short. Any
upturn should be viewed as the beginning of an intermediate uptrend. Day
to day for now. Ditto for
Networkers. Telecom- Not
as much to be concerned about, but still sitting on the bottom of the
channel. AhOL- Still
dead in the water, but could have pop-up from lower channel band. Crisco got
ramped to 13.08 last night on those fantastic earnings and is now at
13.12. 33X earnings. The mania lives. But the stock is rangebound, and
will remain so. Great candidate for channelingstocks.com. Short at 15,
cover at 12. Citicrap-
Intermediate low has formed, should play out in a swup. Mr. Bill's
been scratching his bottom for a couple of weeks. He'll sit on it for a
bit. IBM-
Fascinating chart. Accumulation, or getting ready to break down again?
Let's watch this day to day. Intel has the same pattern. GM's in a
swup, and probably has more upside. GE- The real
story of this market will be told when GE challenges the 31-32 area again. See you in Intraday Stool. Dr. Stepan N. Stool Share your thoughts 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 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 |
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