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.

New Shorts and Stops

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Perhaps my skepticism about the H&S pattern in the prior post was well-founded. It isn't breaking the neckline. We've got to break below 812 on the /ES for it to mean anything. In the meantime, I've entered these new shorts with these corresponding stops:

ACGL 58.18
ADS 39.78
BHE 13
CAKE 13.70
DHI 11.61
DIOD 12.11
EMR 32.81
FTI 35.14
GES 23.28
GYMB 23.80
HRL 33.44
IVN 7.18
KMX 14.01
LKQX 15.97
NBL 64.01
NNN 18.15
OLN 15.45
PAG 11.46
PENN 27.87
RCII 21.14
TLM 12.06
TWTC 10.06
WDR 20.18
WERN 16.50
WRC 30.20

Measured Move Ahead?

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One of the pet peeves I've got in a veritable zoo of them is the badly-drawn head and shoulders pattern. They are everywhere. It seems that people have great difficulty with this very simple pattern, since they "cheat" drawing them in an almost Picasso-like way.

At the risk of doing the same, I offer this minute bar chart of the /ES:

I do not like hte fact that the left shoulder isnt' fully in contact with the neckline. All the same, this kind of move woudl provide just the kind of heeby-jeebies the market would need to release what's left of the bullish mini-mania and allow us to move higher on better terms. My money is on a move down.

Ask This Question

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Early in 2007, I was curious (and stupid) enough to buy Ken Fisher's book The Only Three Questions that Count, which, for me, was absolutely useless. In fact, when I was done with it, the only question that counted was, "Why did you spend your time reading this book?" Complete waste of time.

But one question – just one! – which has been very helpful for me to ask lately has been this: before placing a trade, I ask myself:

Are you entering this trade with a meaningful advantage?

If you ask yourself this, and if you are honest in your reply, you will save yourself a lot of pain. I have "talked myself out of" quite a few trades lately by asking this question and replying, "no."

Some people would say this question is similar to asking if you have an edge. I suppose that's true, but I've never really liked the word "edge" in this context. It sounds too marginal. I don't want a 51% advantage. I want a 70% advantage or more. "Edge" doesn't demand the kind of high bar I'd like a trade idea to hurdle in order to pass.

When I've challenged myself with this question, I realize that there are some trades I am entering Just For The Hell Of It (ahem, AutoZone, anyone?) More frequently, I've avoided a number of goofy /ES trades when I realize that the price action is in the middle of no-man's-land, and it's anyone's guess what's going to happen next. I don't want to guess. I want probabilities in my favor.

Try asking yourself this question for the rest of the week. See if it helps.