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.

Coming Up Roses

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The market remains firmly in the hooves of the bulls. The Fed's commitment to gobble up $1.25 trillion (that's $1,250,000,000,000) in securities that no one else really wants only got people more excited, and we wound up just a little bit below a new closing high for the year. The /ES is clinging like mad to its fan line.

0812-es

As any experienced technician can tell you, the trend – after careful and exhaustive consideration -is up. Monday and Tuesday were just a drop or two of honey on the tongues of the bears. But, as with everything else since March 6th, it was nothing more than a tease.

Now, I sorta-kinda expected this kind of thing (which is why I "lightened up" on my big positions, as mentioned last night). The two somewhat encouraging things I saw today were (1) in spite of being almostly entirely bearishly positioned, my portfolio overall only fell a little bit today, in spite of a triple-digit rise on the Dow (2) an exhaustive search of nearly 400 stocks in my "Wrecks" portfolio yielded very few lottery plays. Until now, it hasn't been hard finding stocks that have a lot of upside left in them. As it is now, the pickings are getting really slim.

For the past seven sessions, the S&P has been banging its head on the dynamic duo – the trendline and retracement line. If it can break above this, it'll probably move upward with gusto. Given the touch of weakness Monday and Tuesday, I thought we had a chance to actually get some distance from these resistance levels, but it was not to be.

0812-spx

It seems to me the "easy money" of mid-March to early-August has been made. Bulls and bears alike would both benefit from an easing away from current lofty levels.

0812-compq

But I'll repeat what's being said in many places: until such time as the US dollar gets some good feet under itself, the equity markets are going to stay high. We need to see the EUR/USD start to retreat, then we will get a tumble in equities.

Fed Statement

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Release Date: August 12, 2009

For immediate release

Information received since the Federal Open Market Committee met in
June suggests that economic activity is leveling out. Conditions in
financial markets have improved further in recent weeks. Household
spending has continued to show signs of stabilizing but remains
constrained by ongoing job losses, sluggish income growth, lower
housing wealth, and tight credit. Businesses are still cutting back on
fixed investment and staffing but are making progress in bringing
inventory stocks into better alignment with sales. Although economic
activity is likely to remain weak for a time, the Committee continues
to anticipate that policy actions to stabilize financial markets and
institutions, fiscal and monetary stimulus, and market forces will
contribute to a gradual resumption of sustainable economic growth
in a
context of price stability.

The prices of energy and other commodities have risen of late.
However, substantial resource slack is likely to dampen cost pressures,
and the Committee expects that inflation will remain subdued for some
time.

In these circumstances, the Federal Reserve will employ all
available tools to promote economic recovery and to preserve price
stability
. The Committee will maintain the target range for the federal
funds rate at 0 to 1/4 percent and continues to anticipate that
economic conditions are likely to warrant exceptionally low levels of
the federal funds rate for an extended period. As previously announced,
to provide support to mortgage lending and housing markets and to
improve overall conditions in private credit markets, the Federal
Reserve will purchase a total of up to $1.25 trillion of agency
mortgage-backed securities and up to $200 billion of agency debt by the
end of the year. In addition, the Federal Reserve is in the process of
buying $300 billion of Treasury securities.
To promote a smooth
transition in markets as these purchases of Treasury securities are
completed, the Committee has decided to gradually slow the pace of
these transactions and anticipates that the full amount will be
purchased by the end of October.
The Committee will continue to
evaluate the timing and overall amounts of its purchases of securities
in light of the evolving economic outlook and conditions in financial
markets. The Federal Reserve is monitoring the size and composition of
its balance sheet and will make adjustments to its credit and liquidity
programs as warranted.

Voting for the FOMC monetary policy action were: Ben S. Bernanke,
Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles
L. Evans; Donald L. Kohn; Jeffrey M. Lacker; Dennis P. Lockhart; Daniel
K. Tarullo; Kevin M. Warsh; and Janet L. Yellen.

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