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, 8/21/02, 8/22/02, 8/23/02, 8/26/02, 8/27/02, 8/28/02, 8/29/02, 8/30/02

9/3/02, 9/4/02, 9/5/02. 9/6/02, 9/9/02, 9/10/02, 9/11/02, 9/12/02, 9/13/02

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

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 9/17/02 2:10 PM  Terms and methodology 

I posted this on Intra Day Stool at 2:09. "Just an added note to the 1 PM Anals before my walk. If this is the best they can do in the one day cycle up phase, Mr. Bool is in beeeg trouble. Looking at the 13 day cycle possibly headed to 860 on the SPX in conjunction with the downturn in one day cycle.

But is is scam week."

Update 9/17/02 1:05 PM  Terms and methodology

At the 11:05 AM update, Doc mentioned that the 5 hour cycle down phase would keep the pressure on until 12-1PM. The revised cmaps for the lows look close as well. So let's guess that we see the 1 day cycle up phase and the 5 hour cycle up phase get in gear until, say 3:30 PM. What can't be foretold, at this stage, is how high that up phase might go. It's just too early. The bottom isn't even confirmed yet. Furthermore, it's scam week! If I had to guess, I'd say, not too far, probably a weak swup.

As for the 5 and 8 day cycles, the up phase that looked like it was under way, failed. The 5 day cycle is now down, coming off a very weak swup since last Turdsday. However, this could still be the 8 day cycle low. Hence the possibility of juxtaposition between the 5 and 8 day cycles. Add to that the mixed cyclicality of larger cycles, and it's just a recipe for more bass-o-matic. Worse, trendless markets are extremely subject to unpredictable "rocks in the pond", such as the one we got last night.

Are we having fun yet? 

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.

Update 9/17/02 11:05 AM  Terms and methodology

Downside cmaps on this move are SPX 880, Nas 1265, and NDX 890-95. Timing remain the same, i.e. low due now on 1 day cycle. But five hour low not due until 12-1PM. Could keep pressure on to the downside and keep things choppy. The up phase in the 5 and 8 day cycles have failed. More at mid-day update.

Update 9/17/02 9:20 AM  Terms and methodology

While the market irrationally exuberantly celebrates Sodamn's gambit, we will take a cold hard look at cyclicality, and see what this rock in the pond means. The market will gap higher on the open, but the fucutures were in a down phase for a few hours coming in. After opening higher, the 1 day cycle down phase will take hold and bring prices down until 11 AM. The 5 and 8 day cycle highs are due today and Friday. They could be established on the up phase this afternoon.

Sodamn's Gambit (9/16/02) 

We have our trigger. Now we'll see how far they can run with this. Of course Sodamn Insane will start cheating immediately. He's had a big head start in hiding the smoking test tubes for weeks now, knowing full well that resistance was futile and that he'd have to back down. 

So the weapons inspectors will go back. They won't have free reign to do their jobs. The evidence is well hidden by now anyway, and the uncertainty will just start all over again. If this were a chess game Sodamned just said, "Check." What will Shrub's next move be? Do you think he's thought this out? The market will figure out the fact that all we get from this is more uncertainty. It will take half a day, or two, or five. The market will pop, and a great shorting opportunity will present itself. 

We want to be there when it is, and the only way to do that is to stick with the tools you have always used. And that's just what Doc intends to do.

For now, Sodamn's gambit is timed perfectly to coincide with a 6-7 week cycle low. How much carry this will have we can't say yet. For now, there's no sign from the daily cycle indicators that it will go anywhere. But, because Sodamn's gambit coincides with the prospective 6-7 week cycle low, it's a good idea not to jump the gun getting short. If we miss a little bit of a move, that's ok. Once this thing starts down, it has a long way to go. For the time being, all signs point to a continued narrow, choppy trading range which is only good for scalping anyway. So if your time frame is any longer than a day, stay away. But day traders will have opportunities to drop the hammer.

Someone bought 100,000 QQQ's in the after-hours, before the news hit the wires that Sodamn the Madman was gonna let the inspectors back in. As one of the stoolies said on The Wire, it sure helps to know the news before it happens. If it turns out the buyer had connections with the Iraqi government, is this insider trading?  Hell no, they were just buying the 6-7 week cycle low. 

Right?

The Feed  added $6 billion in overnight repos. There were no expiring repos. The only expiration scheduled for tomorrow is today's $6 billion.

Three trends are evident on the Feed Index. One is the 10% growth trend beginning in May of 2001. Feed growth has recently been at or below the lower boundary of that trend. The blue channel going back to last December suggests that Al may now be targeting an 8% growth rate. Then there's the golden box which says he's stopped growing Feed altogether over the last three months. 

Al looks like he's decided to go back to hugging the 10% growth line for now. We won't know whether there's a policy shift or not, until it breaks out of one of these trends.

The Feedometer theoretically measures excess Feed available for bond or stock market jamming.

The Feedometer bounced, but remains in a downtrend, and below the 20 day moving average. The Fed isn't exactly draining, but they aren't pumping enough to jam the market. Seems that whatever excess there is, is going straight back into bonds in what looks like a final blowoff. This mortgage derivatives based instability has to be scaring the crap out of Al, and a surprise tightening can't be ruled out. There is a terrible trap being built, from which there will be no escape. . 

The 10-13 week and 6 month cycle cmaps are 3.70 while cmaps for cycles from one to four years are at 3.80. They closed at 3.87 Monday. Other than the cmap targets, there's no sign that the trend is about to end. But given the nature of the blowoff, when the end comes, it will be violent. One of these days, soon, bond prices will crash, and yields soar.

8 Minute Bar Charts 9/16/02  Dow Jokes Inflatables +67.49 The charts at left  show the prior day's action in 8 minute bars with stochastics at %K 26, %D 18, a proxy for the 1 day cycle.  After dipping early, the market spent the rest of a light volume day clawing its way higher. The Dow adjusted up the most, as the stage managers made up for taking a couple stocks down big on Friday. The one day cycle low came just before 11 AM, with the high apparently just after 3PM. The extended up leg means that at least one longer cycle has turned up. This includes the 5 day cycle which has been in a sideways up phase since Thursday, and probably the 8 day cycle as well.   It's op-ex week. Typically trading is very choppy in the early part of the week. With a cycle low due near 11 AM, we could see a little selloff in the early going, after the opening reaction to Sodamn's gambit, then more upside for most of the day. A lot will depend on whether Al refunds the $6 billion Feed. That is definitely enough for a decent sized jam, but again, with the turmoil in the mortgage market and the melt-up in Treasuries, we have to wonder whether things might be coming undone beneath the surface.  Dow Jokes Inflatables This one's a little hard to believe, with a 6-7 week cycle low projection of 7950 due in just a few days. At the same time the 8 day cycle has bottomed, and the 4-5 week cycle is in an 8 day old swup. But, it's opex week, or scam week, as stoolies say. Anything goes.  Portfolio Sphincters Index-SPX +1.29 Nasgap -15.54

All of Doc's cycle charts are powered by METASTOCK. (Sorry about the bull.) You've seen the software advertised on TV. Buy it now at Doc's bookstore! Best price anywhere!

Portfolio Sphincters Index (SPX) and Sentiment

The VIX rose to 40.54. The 30.96 reading on August 22 was the 10-13 week cycle high. The indicator is still in the middle of the Stool Band confirming the rangebound market. On the inverted scale chart this looks like a 4 and 6-7 week sideways up phase in the VIX. The suggestion is that at the next intermediate market  low, we'll see a reading in excess of 60.

The 17 day rate of change, a proxy for the 6-7 week cycle, is still downtrending, but the 29 day rate of change bounced, with the 10-13 week cycle cycle looking like it's in a sideways down phase and possibly still building a top. The indicators need to get in gear before we'll see any kind of sustained move. Otherwise, the choppy rangebound trading will continue.

The superimposed 6-7 week cycle oscillator (red line) dropped to the level of the September low. It can't go any lower because the indicator is virtually at zero. This could be a sign of extreme weakness, or it could simply mean a delayed cycle low is imminent. We can't have it both ways, and typically would see at least a two day pop from this level. 

The 10-13 week cycle oscillator (dark blue) is unambiguous. It should be 3 to 6 weeks before a 10-13 week low. Any bounces would be within the context of this cycle's down phase. What still isn't known is whether the down phase will continue as a trading range or will break down. Odds favor a trading range, given that the 6 month cycle is still in an up phase, and the 6-7 week cycle should be bottoming. But the range could break down late in the cycle.

The short cycle oscillator is still headed up, which is consistent with the 4 week cycle up phase. The 10-13 week cycle oscillator is still in a top. As far as we can tell at this point, the slope of the 6 and 10-12 month cycles (dark blue channel) is at best, flat. Conversely, the down phase of the 10-13 week cycle (green) also looks flat. All of which is why the forecast is flat. 

Boring, but what can you do? 

Fiber Nacho Dump- Support levels and downside targets.

Fiber Nacho Reflux- Resistance levels and upside targets

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 9/16/02

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 
No Factor: Low amplitude is dominated by larger cycles

Nasgap Charts

The Nas was the weak sister Monday. On the charts, at least, there's no sign of much change ahead, regardless of Sodamn the Madman's move, or Shrub's counter. The 17 day rate of change is still in a downtrend, and the 29 day rate of change isn't. So we go nowhere.

The 10-13 week cycle is in a down phase that should last 3-6 weeks. But it looks like one of those sideways ones that keeps prices in a range, at least until the last few days. Let's see what happens Tuesday, though. If the crowd can't get it up for Sodamn, this thing is going down. 

The 6-7 and 10-12 month cycles are still headed up, but the slope of the up phase is flat, at best. The 4 week cycle is in a weak sideways up phase that looks about finished unless Sodamn gave it a second wind. The 6-7 week cycle looks to be near a low.  The short cycle ozzie downticked but not enough to be certain of a downturn. If the market fails to gain on Tuesday, down the crapper we go. If it turns up, the bowl is just filling up for a flush. 

Fiber Nacho Dump- Support levels and downside targets.

Fiber Nacho Reflux- Resistance levels and upside targets

Nasdaq Cycle Conditions as of 9/16/02

PTT - Periods Till Turn
L-Low, H-High
*SWD= Sideways Down Phase- Trading Range
  SWUP=Sideways Up
  p: preliminary
Too Early: Too soon to project
No Factor: Low amplitude, dominated by larger cycles

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 

The 4 and 6-7 week cycle cmaps are 138. Sodamn's gambit may coincide with a 6-7 week and 4 week cycle top. Still 148 on the 10-13 week cmap. But short cycle is in a down phase, and time is running out on the 10-13 week cycle. Even if it gets to 148 in the next few days, should get a couple weeks of consolidation before next blastoff.

Long Bong Hit - See above.

Uncle Buck's Illness

Gotta wonder if Buck blew his wad yesterday after seeing that pretty young nurse in his hospital room. Or maybe it was a mirage. Oops, he's back at it today after Sodamn's gambit. Up to 108.90 this morning.

Suctor Watch

Aerospace - Sodamn's gambit brings moment of....neutrality?

Biodrech- Cycles still mixed. No resolution in sight.

Drugs- Ditto

Bonks- Short cycles want to bounce as 10-13 week cycle tops out. 6 month cycle still in swup.

Consumer- Ditto

Retail- One more pop in 10-13 week cycle top.

HMO's- If they break the downtrend and hold it, the 10-12 month cycle is turning up. If it fails. Game over.

Energy- Does Sodamn's Gambit put the finishing touches on 10-13 week cycle top?

Trannies- It may help extend Trannie  swup.
 

Small Craps- Getting ready to drop.

Dirty SOX- In bottom of drawer. May stay there for awhile.

Soft Where- Like SOX, could bounce around long term trend support for awhile before breakdown.

Nutworkers- Even these may still have friends in low places.

Internuts- Headed for retest of low.

Telecommies- Likewise

Stoolwethers

Citicorpse- Gets out of grave one more time.

JPM- Rolling over in his, but he'll get up too.

Fannie- She's a little behind.

The General- Looks like 6-7 week cycle low.

The Other General- Another bounce in the 10-13 week cycle top.

Wally will test top of channel.

Market Makers Mark- More churning ahead.

PiG- Lipstick running low.

AhOL- Kill those popups!

AMZN- May retest high.

CSCO- Churning toward 10. Will pop along the way.

Tell- Friends at 15 will hold the fort awhile.

DELL- Farmer wants to buy.

BM buyers at 72.

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

Share your thoughts on the Stool Pigeons Wire.

Renewals

Welcome, and thank you for subscribing to the Anals of Stock Proctology. Your trial subscription will run for 90 days. At the end of that period your subscription will renew automatically, unless you cancel. If you wish to cancel your subscription use the button below. If you want to renew your subscription do nothing. Your subscription will renew and your credit card or Paypal bank account will be charged. If you want to renew, be sure your credit card information in your Paypal account is current. Paypal will not renew your subscription if the card has expired!

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
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