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.

The Retracement Awaits

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Good morning, fellow Slopers.

A friend of mine told me a few months ago that it had reached the point where he was getting all his news straight off the Slope comments section. For me, that's become true as well. To borrow a term from the 1990s bubble, Slope has indeed become its own "portal". I first learned of the Madoff scandal right here, and I even learned this weekend that Slope got a mention in Barron's (thanks, Theresa!)

Looking at the market pre-open, we've got a nice 10 point drop in the /ES and, just as important, continued weakness in the EUR/USD (shown below). As I said last week, it's been a long time since my portfolio has been so bearishly aligned; I even threw my commodity longs under the bus. A return to about 880 on the S&P would be healthy for bulls and bears alike.

0615-eur

The Basic View

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Good morning, and a happy weekend to all of you. The Slope Facebook Fan Page has 256 members so far, and I'd like to encourage other Facebook folks to join. Please remember that joining a fan page doesn't expose your information to other members (unless you have your privacy settings set so wide that non-friends can see you anyway!)

As for why I'm doing this – – I'm just experimenting with different forms of Slopers staying in touch. After all, the fan page provides for Discussions, posting of Photos, etc., so you might as well have some fun with it. Don't be shy about contributing to the page if you're already a member. Let's see if it goes anywhere. If it's a dud, it's a dud, and that's OK. Either way, it won't affect the blog.

As for the market, I'll just say one thing, and it's about the S&P: take a look at this monthly graph (a pretty crude granularity for a guy who often uses minute bars!) for the past 10 months:

0613-weakening

I see something interesting. Even though the drop was pretty fierce (with December as the only respite), the climb is consistently losing energy. The range is getting tighter. I am aware of the fact that we're only halfway through June, but looking at a chart like this reminds me of a bouncing ball whose every bounce is smaller than the last.

0613-ball

For me, the most important graph of all is below: this is the daily graph of the S&P 500 index for the past ten years. We see two bear markets: the one from 2002-2002, and the current one.

With the older bear market, at least the market stayed within the bounds of its descending channel. The present bear market is so severe that it broken the bounds of this channel last September, and only now has clawed its way to the underside of it.

0613-longterm

So I think there are a couple of possibilities at this juncture:

  1. The market is very close to climbing as high as it's going to climb, and that lower channel line is going to define its potential for now. A drop from these levels could take us to maybe the low 800s, or;
  2. For reasons I cannot fathom, the market somehow finds the strength and rationale to keep on climbing. The very, very highest I could envision it possibly going would be about 25% higher from here – somewhere between 1150 and 1200.

But I will say this, irrespective of which way we go: I would say the likelihood of the market pushing above 1200 any time before 2011 is approximately zero, and the odds of us cutting below 666 on the S&P before 2011 are better than even.

Open Bar

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Another week where hard work, careful analysis, diligent attention to stops, and active trading have yielded thirteen dollars and seventy-six cents.

In any case, it's Friday, so unchecked pandemonium takes over "my" blog and the recovering alcoholics that crowd in during evening hours take over. If you're still sober (and use Facebook), please become a Slope of Hope fan. It'll be interesting to see what we can do on a Facebook page (and I think this is a much more private method of creating a community than simply "friending" me, as I suggested earlier today).

0612-cocktail

Sign of the Times

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The most serious crime I've ever been the victim of in my life was the 1993 burglary of my startup, Prophet Financial Systems. It just about destroyed the business, and it took me over a year to recovery from the damage.

In my personal life, I've been spared crime, by and large. But last week, for the first time in my 19 years of living in The House That Charts Built, one of our two cars was burglarized. It was a very easy target, because the doors were unlocked. The lovely fellow who did the deed got away with our GPS and camera. Total loss: about $1,000.

Mrs. Bear was understandably upset about this (and promptly got replacement equipment), and I pledged never to bellyache again about her habit of locking the doors of the car at night.

Well, just about an hour ago, I strolled out to the driveway and saw the other car's doors were wide open. Yep – sure enough – the same guy came back and rifled through that vehicle. (Luckily, there was nothing of value to take, and the van – – with its new GPS inside – – was locked and undisturbed).

So the withering of the economy is starting to literally hit home. I live across the street from a former NFL linebacker, and I'm thinking of paying him $5,000 to wait up all night with a baseball bat to introduce himself to the clown who keeps prowling our street.