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.

Patient Bear, Impatient Bull

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OK, full disclosure time.

In spite of all my bravado about USO, I didn't want to hold on to it. I entered the day with the largest position I've ever held in any security, and when it gapped up nearly 4%, I didn't see much more short-term potential. So I sold it at a nice profit (close price $25.35). This absolutely does not mean I think it doesn't have a good future. I think in a month or two it has the prospect of being much higher. But these days I'm not wired to hold on to long positions for months at a time. I'm playing it safe.

As for /ES, the stop-loss level at 715.25 is so obvious that I have re-entered a small position (10 contracts). I will augment this if weakness continues.

Why USO?

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In the flurry yesterday, I didn't get a chance to explain my bullishness for USO very well. There are a few reasons:

  • When we turn around (and we will; whether it's today or three months from now, it is inevitable), I think energy is going to be one of the first leaders;
  • For most of yesterday's vicious 300-point selloff, USO was doing an admirable job clawing its way higher or at least trying to hold on; you could almost see the "fight" in the chart during the day;
  • Simply stated, oil isn't going away; you're never going to wake up and found that crude oil has been lying all this time that, in fact, it has no energy value; there is a store of value there, and there are limits to how far it's going to go down in price (and that limit is not $0)

I think it's got a clear ride to just under $28 at least. As for the contango issue everyone keeps bringing up, my sincere answer (and this isn't meant to be disrespectful) is simply this: don't bother me with facts; I'm a chartist.