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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 8/1/02, 8/3/02, 8/5/02, 8/6/02, 8/7/02, 8/8/02, 8/10/02, 8/12/02, 8/13/02, 8/14/02, 8/15/02, 8/16/02, 8/19/02, 8/20/02
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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. Update 8/22/02 12:50PM Terms and methodology Doc now believes the top is in on the 8 day cycle. The upside cmaps have been met and the peak appears in synch with the last cycle. A retest cannot be ruled out and the down phase should only last a day or two. This may be the best bet for scalping a short we've seen yet on this upswing, but there is still upside risk. The safest play is to sit this out and wait for this 8 day cycle down-up sequence to play out. It's still nearly impossible to read the intraday cycles as juxtaposition rules. The 4 hour wave we've seen the last two days is headed up and the 1 day cycle appears to be down. A 1 day cycle high is due around 2 PM. If it comes earlier, it indicates a small negative shift in longer waves. That's something we'd need to see if this is the beginning of the larger topping process. If it's 2 PM or beyond, not much has changed. 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 8/22/02 10:10AM Terms and methodology The upside cmap for this move (3-5 hour cycle) is 959 on the SPX, 1417 on Nas, and 1040 on the NDX. High is due at 11:10 AM. AM Update 8/22/02 9:20AM Terms and methodology Fucutures were choppy in a narrow range overnight, and should have no effect on today's market. They were approaching a 1 day cycle low near the NY open. Cyclicality is mixed with the 5 hour and 1 day cycles juxtaposed, and and the unusual 2 day cycle probably having topped out. The 3 and 5 hour waves have merged into a 4 hour cycle. That cycle should top out around noon. The 2 day cycle probably topped out at the close yesterday, as its cmaps appear to have been hit. The 5 and 8 day cycles may be in a sideways down phase, with uncertain high and low cmaps. Although the highs appear to have been hit, the down phase could end at any time. The wind is blowing and the sands are shifting all the time. Yesterday was treacherous and today will be more of the same. Good day to head for the lake or beach. 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.
Credit Hurricane Rains (8/21/02) Seas were heavy and choppy Wednesday. Wave heights grew. The market showed again why it is still too early to go short. A mighty tidal surge of liquidity is headed out way over the next two months. The first waves of the feeder bands have reached shore, with bigger ones to follow. The last we saw anything like it was in the fourth quarter. Do not take this thing lightly. All this money and credit will destabilize the markets, with big swings to the upside, and unpredictable consequences for inflation and the bond markets. Economic data will probably show another upward blip next month as a massive does of crank courses through the addict's veins. In the end it may be the overdose which kills, but there could be one helluva trip before the final delirium and death. As violent as today was, it is only a precursor of bigger things to come. Doc does not believe this market can be successfully traded from either side on anything greater than a minute to minute basis for the time being. Until cycle indicators begin to top out and roll over, trying to pinpoint the top remains a dangerous game. The Feed plowed $6 billion into the market through overnight repos. There were no expirations. So much for the "cautious" Fed. Tomorrow, the $6 billion in overnight, $2 billion in 28 day repos, $4 billion in 8 day repos and $3.25 billion in 3 day repos expire. The Feed needs to add $15.25 billion to push the Feed Index higher. Otherwise it will remain in its current flat channel. The Feed Index, which is the total
of all the Fed's paper holdings, is now at the upper limit of its recent
"flat growth" channel (yellow lines). Another big Feed
tomorrow and we can throw that theory out the window. We'll watch
that box for signs of a policy shift. Movement below the green uptrend
line will confirm a subtle policy shift. Watch also measures of broad
money such as M3 and MZM. Skyrocketing money supply growth, against the
backdrop of Al holding the Feed in check, will be the precursor to an
increase in short term interest rates. The Feedometer,
which theoretically measures excess Feed available for jamming the
market, rose sharply as a result of the humongous set of overnight repos.
The market's late rally should come as no surprise. Beyond that, the picture
is too uncertain to draw meaningful conclusions. Al is being coy about
tipping his hand. Unless he comes up with more than 9.25 large
tomorrow, he is still in holdback mode. The monster
mortgage bubble is b-a-a-a-ck. The Mortgage Bonkers Ass. (otherwise known
as the Capone Gang) reported record levels of total applications and refi
apps for the week ended August 16. Notably,
purchase applications were up, but continued to lag well below May and
June, while refi apps reached the highs of December. As this enormous
bulge is funded over the next four to eight weeks, it should act just like
the fourth quarter explosion. Liquidity will flood into the system, driving
the markets and economic activity higher. Doc suspects that this time the
excess money creation will flow into general goods and services price
levels as well. The liquidity from the beginning of the application bulge
in late June has just begun to flow into the system. Over the next 6 weeks
it will grow. It's going to be an interesting period. The possibility of
another massive, but temporary, financial market bubble cannot be ruled
out. Much will depend on how accommodative the boys in the bond pits are.
If long rates move up fast enough, all markets will destabilize soon
after. At there very least, the flood of dollars will cause the markets to
continue to be extremely volatile and unstable.
Portfolio Sphincters Index (SPX) and Sentiment
The VIX fell to 31.63. On the inverted scale chart it is in the top zone of the Stool Band. The final peak in this rally will probably not occur until the VIX and the upper blue band touch. (Close doesn't count). The
superimposed 6-7 week cycle (red line) oscillator fell again, signaling
the peak of that cycle. The down phase may only show up as a slowing in
the uptrend or a sideways consolidation until 10-13 week oscillator also
turns down.. The 17 day rate
of change is near a sell signal as well, but the 29 day rate of change is still
rising. These indicators are mirroring the 6-7 and 10-13 week cycle
oscillators. The 6 month cycle is in an up phase but the index appears to be near the top of the channel (blue) and through the top of the 10-13 week cycle channel (green). That kind of blowout often occurs at a top, but all key indicators are still rising. Until the stoolicator begins to flatten, there's no confirmation of a high. With the short cycle oscillator heading down, the 4 and 6-7 week cycles should be going into a down phase, which normally would play out as a trading range in the early part of a six month cycle. By one count, shown below, the 10-13 week cycle high could be now, with a cmap of 960. An alternative projection puts it 4 weeks out, at 1000. A down day here would tilt probability more in favor of the first alternative. Possible cmaps for shorter cycles also have similar alternatives, as shown in the cycle table.
Fiber Nacho Upchuck- 978 is a
short toss from here if the magnetic attraction of 940 fails. 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 8/21/02
PTT - Periods Till Turn Nasgap Charts Rate of change indicators for the 6-7 and 10-13 week cycles paused again, in spite of the rally, but their trend is still up. The 6 month cycle oscillator rose again. A very preliminary upside cmap for the 6 month cycle high is 1445, which is certain to change. It is only 37 points away, and near term strength will push it higher. A move directly to the top of the 18 month- 2 year cycle channel at 1500 can't be ruled out. The 29 day rate of change is at the level where the March rally peaked. If it blows through here, 1500 is almost a foregone conclusion. Short cycle cmaps are pointing to a top mostly between 1425 and 1445, but the projection of 1505 on the 4 week cycle is sticking out like a sore thumb. It might be an anomaly, and it might not.
Fiber Nacho Resistance Levels. 1410 is a biggie. Nasdaq Cycle Conditions as of 8/21/02
PTT
- Periods Till Turn Department of Yes We Have No Inflation Is inflation
news about to get dramatically worse? Sure looks that way. 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! Golden Stool Cousin HUI is
drifting lower as the 4 week and 13 day cycles are in a down phase with a
cmap of 114. This is part of a bottoming process in the 10-12 month
cycle Bond yields are headed for
a retest of last week's low as a bottom begins to form. The test is all
important. Doc thinks yields will begin to turn up. Uncle Buck's Illness Uncle B's 10-13 week cycle
oscillator will trigger a sell signal on the next day he falls out of bed.
So far he's up overnight, but he's on a 1 day cycle sell signal at 7:40 AM
ET. Bonkers- The 10-13 week
cycle is entering a top, but prices can go higher until ozzie rolls over.
Still has 6-7 week cmap of 835. Consumer- 10-13 also in top
area, but hasn't rolled over. 6-7 week cmap is 230. Drugs are also in 10-13
week cycle top zone, but have a cmap of 320 on the 6-7 week cycle. Small Craps- The Russell
2000 has a 6-7 week cmap of 407. It's almost there. SOX- 6-7 week cycle cmap is
375. Soft Where- 6-7 week cmap
is 105. Nutworkers- In this market,
even the dead have returned. 6-7 week cmap is 142. AhOL-
Testing upper limits with a 6-7 week cycle cmap of 14. AMZN- Is
swup ending? CSCO-
Testing upper channel limits with 6-7 week cmap of 15.75. DELL looks
extended. 6-7 week cmap is 29. GE- Signs of
top building abound, but a 6-7 week cmap of 35 gives pause. GM's 6-7
week cmap is 49. IBM- looks
toppy,, with 6-7 week cmap of 83. Mr. Bill -
Battling trend resistance with 6-7 week cmap of 52 met. Wally also
hitting resistance with 6-7 week cmap of 55. 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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. (Sorry about the bull.)
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