Slope of Hope Blog Posts

Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.

1150 – Right Number, Wrong Role

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We're heading out to dinner with friends in a few minutes, so I'm going to make this quick.

I can sum up the past fourteen months by saying this: although I did a lousy job taking advantage of it, the rise that took place from March through December 2009 made sense to me from a charting perspective. What did not make sense – – and what simply drove me up a tree these past few months – – was everything that took place in the first four months of 2010. I've highlighted this chunk in the graph below.

0509-rut
 

So if you showed me this graph on the last day of 2009, I would have said it represented a once-in-a-lifetime shorting opportunity. Regrettably, the market was just about to kick into overdrive, which made February and March especially unbearable for me. The past four days have had tremendous healing force on my portfolio.

I've pretty much laid out all my thoughts on Friday night's video, but I will say this – – the oft-cited level of 1150 on the S&P does have import, but for the wrong reasons. Many held that up as the support level for this market; a buying zone, if you will, for those who had enjoyed great success buying dips for the prior fourteen months. I believe, however, that 1150 could instead mark an important new resistance level, given the drama on Thursday and Friday. The stuffing has been beaten out of the bulls, and I think they're going to be eager to sell based on any push higher.

0508-spx 

I currently have 55 short positions and a list of 106 – count 'em, 106 – other stocks I would love, love, love to short given the right price. The "right" price is anywhere between 5% and 10% north of where we are at right now. If we can get some kind of "phew, that was just another nice dip" rally going, I am going to ratchet up my short positions all the way up to 200% of my cash. Right now, I've got a nice, lean 35% allocation, and I've got a list of 21 longs that I may enter to bide my time.

It is my belief that, before May is over, the bears are going to have a shorting opportunity delicious beyond compare. As for the powers-that-be doing things like banning shorting later this year during the chaos? Let 'em. I'll already be in position. 

Regret Portfolio Update (by Fayssoux)

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In April I posted two portfolios of deep value stocks
selected near the lows of 2008 and early 2009 that had produced breathtaking
gains from a buy and hold perspective.  I
was kicking myself for getting out of these stocks way too early in the
historic bull run.  One of the portfolios
was suggested by Tim on 3/13/09.  Where
is this portfolio today?  It has been
dented, but it is still up roughly 220% in 14 months.

Clearly, there are large amounts of capital
gains (now long term) sitting in the market, particularly in small caps, after
an incredible run.  There is also a
recent memory of the meltdown for those with a long term buy and hold
perspective.  Inference = we could see
much more selling than we have experienced so far if holders of small cap value
stocks decide to exit en masse

Company

Price

Today

Gain
Since

 

 

 

3/13/2009

Cavium Networks, Inc.

25.27

-3.55%

108.50%

Cadence Design Systems Inc.

6.7

-3.04%

63.41%

Fifth Third Bancorp

13.44

-1.25%

672.41%

Huntington Bancshares Inc.

5.97

-4.09%

283.01%

GLG Partners, Inc.

2.73

-6.19%

13.75%

KLA-Tencor Corporation

31.67

-0.72%

73.53%

Quicksilver Resources Inc.

12.41

-4.02%

159.08%

Linn Energy, LLC

23.79

0.41%

67.39%

Cheniere Energy, Inc.

3.16

-4.82%

-24.94%

Level 3 Communications Inc.

1.3

2.76%

103.91%

LodgeNet Interactive Corporation

5.19

-7.16%

710.94%

Mechel OAO

20.82

-0.86%

473.55%

Och-Ziff Capital Management Group LLC

16.72

-1.70%

164.56%

Smithfield Foods Inc.

17.61

0.06%

126.06%

Whole Foods Market, Inc.

37.7

-1.02%

163.64%

Windstream Corporation

10.33

0.49%

45.70%

Wyndham Worldwide Corporation

23.89

-2.37%

479.85%

XL Capital Ltd.

17.45

-0.85%

369.09%

CompuCredit Holdings Corp.

6.08

-1.62%

166.67%

19 Stocks

-2.39%

218.61%

My Journey to Slopefest (by Nathaniel Goodwin)

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So this week was pretty interesting. I began shorting the $RUT on the 4/29/10 rally after the reversal candle on 4/26/10 and large drop on 4/27/10. As of 4/29/10, there was absolutely no technical damage to the $RUT, but if I'm going to try to short it, that is where I want to do it. Place stops above the 4/26/10 high.

 

Things from there looked good. I closed some shorts on 5/4/10 since it hit the bottom of the yellow channel. Still no technical damage was done to the rally since Feb 5th. On May 5th it opened and closed below the yellow channel, now that is some damage to the rally and I added shorts. May 6th was just stupid, and my least favorite day this week.

 

My shorts on May 6th just did alright, but that drop also triggered a couple of buy orders I thought would never be hit and they were stopped out minutes later. I tried to cancel them, but I was having trouble with my platform and my three data feeds were giving me different prices! In the end, the day was pretty disappointing even though I was heavily short…

 

I have been using this daily chart of the RUT going back to Feb 5th, and look at what happened after the May 5th closing outside of the yellow channel. It had no support at all. Overall, it was a good week for me. I made $673 since 4/29/10 (one of my best weeks ever), and cashed it out on Friday to purchase a totally badass Fiero that I will be driving to Slopefest. SEE YOU ALL IN VEGAS!!!


RUT