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10 Minute Bar Charts 5/7/02 Dow Jokes Inflatables
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The Anals of Stock ProctologyPublished 5 times
per week by the American Academy of Stock Proctology and PM Outlook 5/8/02- Not much to add to the comments below. Now it's wait and see if the 1 PM projected high develops on the 1 day cycle. Preliminary cmaps on the 3 and 5 day cycle up phases are 1690 on Nas, 1085 on SPX, and 1280 on NDX. The cycle highs are due today or tomorrow on the 5 day cycle. 5 day cycle cmap on CSCO is 15.75-16. We are almost there. It's too early to say if the 8 day cycle highs will extend beyond that. Depends on if the back of this thing can be broken over the next day and a half. AM Update 5/8/02 11:20 AM The 5 day cycle high is projected at 11:30 +/- with cmaps of 1665 on the Nas (high 1660 so far), 1256 on NDX (1245.95 so far), and 1078 on SPX (1076 so far). All cmaps are approximate. 1 day cycle high due around 1 PM. cmaps are as follows: Nas -1675 +/-, NDX 1255-58, SPX 1080-83. These would hold only if a high does not develop at the 5 hour high cmaps above. Think of this as a second line of deee-fence. Stop the madness! Amen Pre Market Outlook 5/8/02- 10-13 Week Low? 1 day cycle low cmaps on all the major indices were hit at the bell yesterday. The 5 hour cycle high is due at 11:30 AM. The 1 day high is sue at 1 PM. The upside cmaps on the fucutures are 1068 on the SP's and 1207 on the ND's on this move. Yesterday was also a 5 day cycle low, with downside cmaps reached at the bell. The 8 day cmaps were 1044 on the SPX, 1550 on the Nas and 1135 on the Nasdaq 100. Yesterday's lows came close to that. This may be the beginning of the 10-13 week cycle low. Stay tuned. Yet Another Bottom (5/7/02) The big stinky finger is sticking up in Crisco after the bell in an amazing display of, "Can the bear market be over when things like this happen?" What a joke. Forget the earnings numbers. They are meaningless. Here's what matters. This is another mindless institutional panic and short squeeze as the sphincters smell the bottom yet again. They will never learn. When this buying orgy is done, the stock will collapse yet again. Let's see how long they can sustain the nonsense. My guess is, till tomorrow's open. The cycle indicators are signaling that a short term bottom is getting closer. It should be within two to eight trading days and in the area of 1025-30 on the SPX and 1500 on the Nas. It's time to begin closing some of those short positions on weakness. If the Crisco rally does hold, consider moving more aggressively. The Greenspew Gang did nothing on the rate front. No surprise. But they are not assisting the market. The Feed did not even refund Monday' s $2 billion overnight repo today. They did zippo. So again, another draining of the monetary cesspool the Feed spewed out last fall. The total drain since Thursday appears to be approximately $8 billion. Former Fed Governor Preston Martin said on Crapvision that the Fed MUST slowly drain the excess liquidity they forced into the system after September 11. It seems Al and the Gang are doing just that, without exactly shouting it from the rooftops by raising rates. Without the support the excess liquidity gives the market, the downtrend will eventually accelerate as investors and and companies are forced to sell equities to meet cash needs. Dow Inflatables
We are getting closer to one of those bigger bounces. The double bottom on the chart, and the silly reaction to the Crisco announcement could trigger it, but there's a decent chance of one more downdraft before the grease fire catches and burns awhile. The 8-13 day cycle oscillator is still negative, with the down phase due last anywhere from 2 to 7 days. That doesn't mean that's definite. It could have ended today. The 4-5 week cycle oscillator did turn up. The 6-7 is still mildly negative, and the 10-13 week cycle appears to be in a trough, and is on the cusp of going either way, probably up. The centered moving average projection for this cycle is at 9,675-9,825. The jumping out window could still be open for another week or so, but with each passing day the risk grows that the low is in, at least in the Dow Inflatables. Portfolio Sphincters Index (SPX) and Sentiment The SPX is still weaker than the Dow, losing 3 to 1049. The 17 day rate of change, a proxy for the 6-7 week cycle, continues to flatline at a negative level. If that's a sideways up phase, what happens next could be chaos. The 6-7 week cycle oscillator superimposed on the chart has turned down at a weak level, normally a sign of severe weakness. The 29 day rate of change, representing the 10-13 week cycle, is flopping along below the level from which it turned up in February. It continues to confirm the downtrend. The 10-13 week cycle low is due at any time over the next 7 trading days. That's a window where all cycles could head down together, and in which an upturn almost certainly will occur. As with the Dow, the risk of an upturn grows each day over the next week and a half. The VIX fell to 24.57 from 24.88 Monday. On the inverted scale chart, VIX is now in the center of the Stool Band, confirming the trend, but not anywhere near the levels of fear necessary to signal a significant bottom. A big intermediate rally probably won't come until the index is below the outer band, i.e. a reading above 30. But there could be one of those ugly upside spikes so typical of bear markets, at any time in the next week to 10 days. The blue channel lines are the extension of a linear regression channel from the February and May 2001 highs.
The 5-6 month and 10-13 week cycle oscillators are still heading down, but they are definitely in "bottomy territory" or Dover Sole, as the natives would say. Of course, there's no such thing in a bear market. We don't know if what looks like Dover Sole really is. Unfortunately, we won't know until after the turn. The short cycle oscillator turned down from a low level, indicating that the market could drop like a stone from here, but only if the red smoother turns down as well. Otherwise, it's just a common whipsaw. The Trading Stoolicator is still heading down. The indicator line is above the smoother. That's a caution signal, and the light is flashing bright yellow as the red smoothing line begins to flatten also. It sure looks like a cycle low is beginning to form on the 10-13 week cycle. The centered moving average projections suggest there's a little more room to the downside, but this is clearly not the time to be establishing, or adding to shorts. Short term centered moving average projections for cycles of 4 to10-13 weeks are stabilizing in a range of 1005-1035. That's a little too close for comfort, given the time frame. While it may be time to sit tight in your shorts for a few days, it is not time to double down, or add new positions.
Fibo support at 1062 broke down. The next levels are 1036 and 1009.
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 5/7/02
PTT - Periods Till Turn Nasgap Charts The Nas gave up nearly 5 to 1574. It will probably be up 30 on tomorrow's open, but we'll see how long they can hold on to that. The short cycle oscillator looks like it's topping out. If the CSCO gains hold, that would whipsaw. If they don't, the short cycle down phase still has a few days to go. The target would be 1500 over the next 1 to 5 days. The 5-6 month cycle
oscillator is gradually heading down from below neutral. The 10-13 week cycle
oscillator is heading down, and is still a long way from Dover Sole. Doc's composite trading stoolicator
is on a yellow light. If
both lines are heading in the same direction, the trend is confirmed. If
they begin to diverge, a trend change may be imminent. There appears to be multiple cycle wave band support at 1500. The next fibo support is 1545. After that 1387.
Nasdaq Cycle Conditions as of 5/7/02
PTT
- Periods Till Turn The cycle oscillators are
inching closer to signaling an upturn in the 10-13 week cycle. Not there
yet, but close. Considering that stock prices are still moving in tandem,
it's time to at least be alert. The 6 Month Cycle
oscillator in the dirty dirty SOX is getting down into Dover Sole
territory. It's also at the linear regression projection of the center
line of the long term trend and the lower channel projection of the
intermediate cycle (green). Time for care and caution on the short
side. The situation in the
Networkers is different at this point. The group is trending lower with positive
divergences in the cycle oscillators. With the Crisco thing, there's going
to be a bounce here, but it won't be sustainable. The 6 month cycle
oscillator appears to be topping out, suggesting that, psychologically,
this may be as good as it gets. Stoolwethers- Crisco Grease Gun If CSCO can sustain it's
pre-market gains throughout the day, the 6-7 and 10-13 week cycle oscillators
might turn up. Doc doesn't think that will happen. This is just part of
the psychological top in the 6 month cycle. In other words, a blowoff. Doc took a look at UNH on
April 13 at the request of a stoolie, and predicted "slow death for
shortsellers." Turned out to be a sudden death. Three days later the
stock exploded to the upside. Looks like it just finally topped out, but
whether this leads to a real pullback or just a sideways consolidation is
too early to judge. Major tops are accompanied with slowing mo. Don't see
that yet. If you have an idea for a Stock O', 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. Feel free to request follow-ups too. Uncle Buck's Illness Uncle Buck looks like the
CSCO chart the last few days and is way up overnight. We've all been
watching Uncle Buck for keys to our future. It just dawned on Doc that
Buck is following the stock market, not leading it. Golden Stool Starting to see signs of a
short term top in the gold stocks. The 10-13 week cycle mo is
already on a sell signal. If Doc's Stoolicator and the 6-7 week cycle
oscillator roll over at this point, we'll have sell signals from negative
divergences, i.e. lower highs in the oscillators vs. higher highs in the
index. At that point swing traders could take profits, and wait for the
consolidation to finish consolidating. To be sure, wait for the signals.
No need to jump the gun. See you in Intraday Stool. Dr. Stepan N. Stool Let me know what you think on the Stool Pigeons Wire. Previous complete issue with all features 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!
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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