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Nasdaq Composite Comments Archive[adbox-upper.htm]Dr.
Stool Sees Backup (1/5/01) The breakdown from the double top does suggest a move down to 2520, based on the height of the top from the baseline. So let's look for a little bounce for a day or two. Call it the Crisco, uh - Cisco - effect. That'll grease the skids for the next slide. Quick
Disintegration (1/3/01) The big question in Dr. Stool's mind is how the market will react to some normally bullish short run indications on Monday. The Nasdaq is at the baseline of its short term double top. Intraday stochastics are at extremes which often signal at least a bounce, and at 2660, the index has reached a price objective for the 4-5 day cycle. Dr. Stool would not be surprised to see that bounce, but would be, if it amounted to more than a little bump up, considering that the 20 day stochastics has given a strong sell signal. A break below 2660 portends a move to 2440. That shouldn't take long. Not
Quite Ready (2/1/01) Ahh.
That's better (1/31/01) As for the downside, it's too early to tell. Dr. Stool suspects that a little back up to the baseline of the breakdown at 2820 might occur first. The daily bars are still within the double top pattern, and there appears to be plenty of time for a major downleg to unfold. Waiting
for the Other Shoe (1/30/01) On
Schedule (1/29/01) Cycles of six to ten weeks are getting old, and the longer oscillators are getting in position to top out. The 17 day ROC is signaling weakening momentum. Dr. Stool is speculating that the sell signals will come when the Fed loosens on Wednesday or Thursday. Can't
Believe Dem Bulls (1/26/01) The four day cycle intraday stochastics oscillator gave a buy signal right after the opening Friday. Dr. Stool was dumbfounded. C'est la vie. This too shall pass. Actually, Thursday's selloff didn't turn any of the daily oscillators to sell signals. And there's still an upside objective of 2970 or so, that remains open, based on centered moving average behavior. So there's reason to be uncomfortable. A 190 point rally from here would be pret-ty scary. Dr. Stool wouldn't like it, but the possibility should not be ignored. Looking at the daily oscillators, it's clear the upside momentum, helped along by lots of nervous short covering, has not yet worn itself out. Turdolanche
(1/25/01) And looky, looky, surprise, surprise, the Nasdaq is back on that 4 1/2 month old downtrend line. How 'bout them market makers? Are they something or what. A one day whipsaw wasn't good enough. Had to run it through, close way above the line, then flush. This is one of the greatest sucker plays on the chartists that Dr. Stool has ever seen, in 37 years of stock proctology. We are about to hear a big whooshing sound, as all that newly printed cash gets sucked into a vacuum. Next stop, (rest area only, no gas) 2,670. Matterhorn
Formation(1/24/01) Now, you stoolmeisters know that Dr. Stool doesn't like the term overbought. When the Fed has loose stools, as a result of its irrational fear, they can pump enough gas on the fire to keep it burning for awhile. So let's just say that the oscillators are at levels where the market has topped out in the past. Just take a straight edge proctoscope (also known as a ruler, book, or piece of paper) and starting at the left edge of the chart, draw a line across the tops of the oscillators. That'll give you the picture. Yep, Matterhorn, it is. Get your skis on, and some nice warm shorts. Back
To the Pinnacle (1/23/01) Ok, so they've taken out the downtrend. Now what? 2890 for starters, on the opening of course. There's heavy duty resistance at the top of the uptrend channel. If this flying turd sticks to the ceiling up there, look for a lunar landing in February. But it's not going to happen, says Dr. Stool, with the great assurance that comes from years of studying the market's downside in the proctoscope. Not going to happen! Ahem, uh, yes, well. Bearly
Wait (1/22/01) There are no sell signals in the short term oscillators yet, but those downticks (on the daily chart indicators) could be prescient. In bear markets, the sell signals are typically late, and once they come, it will be tough to get your shorts off. So go ahead and pay your nickel, and be patient. Are
we breathing yet?(1/19/01) What country! Now Dr. Stool also has some proprietary indicators that he has relied on for years, which are helpful in periods of great uncertainty and trepidation. You can see one of these below. It is the long term Proprietary Proctoscope Oscillator or PPO. This PPO is very reliable at calling major trend changes, a week or two after they occur. Dr. Stool discovered that, by comparing moving averages of the slightest difference in time span, a stock proctologist can get a very smooth reading, which is yet sensitive to key changes of direction very soon after they occur. Even the most junior stock proctology intern can see that this indicator was right on, when it confirmed the bear market at the beginning of April. And now, in spite of the fact that the Nasdaq has been rallying for nearly three weeks, there is no sign of a major trend change. This rally is a bear market rally. Finally, Dr. Stool wants you to look at the 20 day stochastics and 10 day ROC. The stochastics has just formed a peak in a rare TransAmerica Tower formation. The key to understanding this formation is that the TransAmerica Tower is in California. This is one of many rare chart patterns related to California, now appearing on a number of charts. This too is no coincidence. The 10 day ROC is in an equally rare formation from the East Coast, warning of extreme danger. This is the Manhattan Skyline formation. The indicator has gone over the top of the Empire State Building, and is now headed for the East River. In cement shoes. 2950
(3000? 3150?) or Bust (1/18/01) All right, bear markets are capable of huge rallies. With 20-20 hindsight Dr. Stool sees that he missed the December-January low as an important intermediate low. The short squeeze is in full frenzy. By various measures, this move now projects to the 2900 to 3150 range. The big question is how long it takes to get there. 15 minutes or a half hour? Breathe...
Breathe. (1/17/01) Prices exploded through the downtrend line on the open, and spent the rest of the day trying to stay above it. Alert to bulls, system fail, system fail! If you didn't listen to Dr. Stool Tuesday, you've been had. Who do you think sold you your stock yesterday morning. Not the public, that's for sure. They were all on the buy side, including the public shorts. And from what account did that market maker sell you that stock? You got it, his short account. Dr. Stool is a bit concerned about the breakout in momentum indicators however. This could be a signal of a trend shift. So is it a breakout, or a fakeout? Dr. Stool says fakeout, based on the buying panic blowoff in the AM, the fact that the index closed back on the downtrend line, and the fact that this short cycle up phase is already long in the tooth. The seven week cycle bottomed back in the third week of December. If this is a change in the intermediate trend from bear to bull, any pullback will be contained above the 20 day moving average at 2500. We should know pretty soon. The
Maginot Line? (1/16/01) The index is bumping up against its upper channel boundary, and the 34 day moving average which has turned back two previous advances. Stochastics and Rate of Change indicators have also reached levels which have marked previous rally highs as far back as July (the 10 day ROC). Market makers and portfolio managers read charts too, and you'd better believe they are going to run the shorts again on Wednesday. Dr. Stool still believes that rally will be turned back, and that it will mark the high watermark for this cycle. And tomorrow, Dr. Stool may need to shut up. Everybody
loves a little squeeze (1/14/01) Now, the portfolio managers and analysts love a good squeeze, because it makes them look better than they looked the month before, when they looked like a bunch of dumbasses. So they goose the market with whatever they have left of their clients' money. But they don't goose everything, just the ones whose shorts are showing, because they know that all it takes is a little goose, and everybody JUMPS out of their shorts. And all the pros are happy, cuz they're sellin' right into the little goose rally. And now they're wearing our shorts. What a country! Anyway, in a steep downtrend, cycles are hard to see. And everybody is running amok picking bottoms (which of course your stock proctologist has warned you about.) Putting the daily chart in the stock proctoscope and fiddling with the dials, Dr. Stool has has tried to show you just where the cycles are. Take a look at the daily chart below, and you'll see that this rally is pretty standard stuff for this bear market. Nothing to get excited about. Of course if the market rallies Tuesday, now, hmm, Dr. Stool would have to put that in his pipe and smoke it. Air
(1/11/00) Earlier this week Dr. Stool saw a possibility that the Nasdaq might trade up until Thursday. But he did think the rally would fail before then. Now that, it's Thursday, and Nasdaq closed near its high, is it time to re-evaluate. No! What would it take? One more day like Thursday. Ain't gonna happen. More
bounce, less drip (1/10/00) Drip, drip, bounce, drip, drip, bounce (1/9/00) The Nasdaq has had a variety of different rally types these past few months. There is, of course, the well known, dead cat bounce. Dr. Stool has also made note of the Jack-in-the-box, and hot-air balloon rallies. Now Dr. Stool sees a new rally type developing. He has diagnosed this as the bouncing turd rally. Sometimes the Composite drops and remains on the floor. In a few cases it bounces. This is one of those. The 5-8 day cycle up phase has a fifty-fifty chance of lasting another day or two and making it to 2500. Now THERE's a bold forecast! Hanging
on for dear life (1/8/00) In the big picture it's insignificant. The 4 week cycle is approaching a top. Time is the enemy after the next few days. This 2250-2600 trading range is a consolidation in the downtrend, nothing more. If the prognosis improves, Dr. Stool promises to let you know. Panic Now (1/7/01) Dr. Stool now sees extreme weakness into the end of January. The next two or three days, in particular, have all the prerequisites for a crash. Virtually all short and intermediate cycles are in gear to the downside. The psychological atmosphere is ripe for panic. The 17 day Rate of Change (ROC) is particularly interesting. This indicator is a very reliable measure of the 7 week trading cycle. It is rolling over here, without ever having reached a positive reading. Likewise for all the other oscillators. The measuring objective on hourly chars is 2170. Dr. Stool expects to see that as soon as Monday, certainly by Wednesday. That sets up a measured move to 1850. All of that should be met by the end of the month. Dr. Stool's shorts cleaned out. Bears shot by early Fed pop gun (1/3/01) Here's part of what Dr. Stool said over the last two days. (Dr. Stool has forgotten the rest- selective memory loss):
Got that part right. Unfortunately for the bears, and happily for bulls, the Fed went into panic prevention mode, and surprised the doo-doo out of everybody, especially Dr. Stool. Dr. Stool believes that the Fed's early move indicates deepening crisis in the financial system. The markets will wake up to that Thursday. In the short run, the upside measuring objective is 2700 to 2750. There's a major downtrend line at 2800 where there will be a ton of stock for sale if it gets there. Dr. Stool guesses that it won't. Market makers will not be so kind as to let the public get out. They'll short into the rally and stop it cold. Dr. Stool will wait for the dust to settle, and would need to see major improvement in the momentum and indicators to cause him to re-evaluate his bearishness. This rally is not a surprise, just earlier than expected. Let's see if the second part of the scenario plays out over the next few days. Update (1/4/01) In spite of the blast off, momentum and stochastics indicators remain weak, and there has been no attempt to break the downtrend channel as the 20 day moving average turned back the advance. The shortest term cycles have an upside objective of 2660, which is close enough. The 4-6 week cycle objective may be as high as 2750-2800, but that is likely to adjust downward unless the market rallies Friday. Overall, the downtrend remains intact.
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