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 Swiftness of the Bear

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Let me show you a minute-bar chart to illustrate a point:

0901-whoosh

The /ES spent ten calender days meandering around a 25-point range, chewing bears and bulls into hamburger.

It took the same instrument 90 minutes to slice down over 25 points. This morning's pop must have been one of the cruelest fake-outs for the bulls in a long time. It was exciting to watch.

What do we do now? Well, since I've been punched in the face non-stop for about five months, I've got a skosh of cautioness, as you might guess. This morning, I didn't have a penny of buying power left, since I was 100% deployed into shorts.

Having closed out a series of ultra-bearish ETFs, I've got a pretty good wad of cash again. I've gone long some /ES for the evening (the same kind of "insurance plan" I did multiple times today, all for naught, but important nonetheless). I would get a lot more excited shorting this market with a retracement to anywhere above 1010.

Both today and yesterday were quite good, and back-to-back they felt terrific. I think my shorts are wonderfully positioned for a sustained downturn, and I shall keep tightening stops along the way. In the meantime, I hope to make some large swing profits by moving into and out of ETFs at risk/reward levels that I think are judicious.

Mercifully, my regular trading accounts still have the good grace to permit me to trade the instruments I choose (unlike, cough, cough, Principal).

Good night, Slopers!

Update on 401-K Meddling

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First off, since I haven't bothered putting a tag up, please note you can get to my Twitter account here in case you want to get my tweets. I've got something like 2,800 followers, and it's been at that number for a long time, so I suspect a few of you might not know about it.

Second, for those who had contacted me about The Fund That Shall Not Be Named and were wondering what was going on, I'm still waiting (after four months……….) for the bureacratic numbskulls in California's state government to bless my RIA. My understanding is that this entire process consists of making sure a person has no securities violations. That should, I believe, take all of 7 seconds, but apparently 4 months isn't enough time. So until that comes through, I'm stuck. But you'll hear from me if and when things are all lined up.

That, to me, is just another great example of government versus business. A well-run business doing the same thing would charge an expedite fee! I have been ready, willing, and able to hand over however many thousands of dollars it would take to speed things up. But, nope, they don't have such a thing. Plus, by the way, California is broke. Don't you think it would make sense for a bankrupt state to exploit easy ways to raise money like that? Bureacratic nincompoops.

I got a lot of helpful feedback to my post about 401-k insanity yesterday. In a nutshell, Principal has completely shutterered the use of any inverse ETFs and any leveraged ETFs. Some people wondered why I simply didn't use options. Umm, people, this is Principal. 

Here's a helpful analogy: thinkorswim is to Harvard as Principal is to Humpty Dumpty Preschool. This is a VERY unsophisticated platform, and they don't offer options of any kind.

In fact, today, I went to liquidate one of my ETFs, and I got this message………

0901-turdmonkeys

So even just trying to sell a postion, I had to call them and wet-nurse them through closing this position, because they have restricted ETFs absolutely, including the simple act of closing out a position! Incredible.

You may recall this is the account I grew about 380% last year. I was able to do that – even with NO margin available, TERRIBLE commissions, and BAD executions, simply due to aggressive ETF purchases. I spent something like $25,000 commissions last year on this little account (which, ahem, started as a $43,000 account!) and still managed to wind up at something like a quarter million bucks.

So the only choice I'm left with at this point is (gack, cough, barf) mutual funds, which price ONCE per day, at the END of the day. So I'm buying four bearish funds at rotten prices, because – in case you didn't notice – the market was down hard today.

There will come a time soon that I'll be closing this 401-k account forever. That's the result Principal gets from me, as their customer, for this stupid new protocol.

The Answer is Cohen in the Wind

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Fellow Sloper Funnel of Love sent me this article which contrasts the viewpoints of everyone's favorite she-male, Abby Joseph Cohen, against those of some distinguished fund managers.

The article states that Paul Tudor Jones' Tudor Investment Corp, Clarium Capital Management, and Horsemenan Capital Management – which collectively manage $15 billion dollars in macro funds – believe this whole lift in equities has been nothing more than a bear market rally, and they are positioned to profit from the subsequent downturn.

Cohen, on the other hand, had the conceit to declare the recession "ending right now" last month (which, I suspect, will mark the absolute peak of this entire charade, further eroding her already questionable reputation and throwing into jeopardy her endorsement deal for Gillette's women's razors).

So – who would you rather believe? An androgynous shill for Goldman Sixsixsix, or a trio of wildly successful fund managers?

That's what I thought.

0901-cohen

Bottoms-Up Investing

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I'm going to be fairly quiet during market hours today, since there's really nothing to say. I am loaded to the teeth with short positions, and with the Dow down 177 as I am typing this, I'm sitting pretty.

I will share one thought, however. Yesterday night, I was doing something I don't do very often, which is going through my existing positions (I normally look for new opportunities instead, which I did later). As I went through all my short charts – and there are nearly 100 of them – one simple thought dawned on me: these charts are sensational!

I've been so mired in bear-pity that I lost sight of just how completely amazing these shorts were. That's why I rolled my eyes with apathy at the very brief pop this morning. With so many charts poised to plummet, there's no way Goldman Sachs can prop up this sick pig anymore. Of course, since they are good at just one thing – making money – I'm sure they're ready to make a ton of cash as the market falls.

They're not stupid. Just evil.