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.

Timeframes and Actions

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Since – and I'm being my typically overly-polite self here – some people seem confused as to my attitude toward the market, allow me to explain. Again.

Short Term (Hours/Days)

  • Open to the possibility of S&P getting as high as 1120
  • Have opened up about 10% of intended short positions already. Vast majority of accounts in cash.
  • Have a small number of long positions, and a pretty big SSO position to soften the blow if the rise continues; occasionally briefly trading ES for pops and drops. Long /ES as of this writing.
  • Opportunistic day-trading ETFs when risk/reward seems heavily in my favor

Medium Term (Next Few Weeks)

  • Think likelihood of trend change very strong;
  • Going through all stocks in advance and preparing target entry points and stop prices;
  • Intend to hang on to already-established positions and ratchet stops down as needed

Long-Term (Months/Years)

  • Believe people who are planning on a new bull market are incorrect;
  • Think slow, grinding bear market will continue several years;
  • Believes major government policy shifts and social unrest will accompany bear market;
  • Will trade infrequently once bulk of positions are in place

Got it? Good. Thank you.

A Close Look at the Russell 2000

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The /ES continues to grind uncomfortably and annoyingly along its descending trendline of resistance. It could, of course, pop above it at any moment. Given the fact the trendline isn't even a week in length, a break above it wouldn't be explosive, but it would be another carpet tack in the coffin of the bearish argument.

Some might assume, based on my disposition, that I am massively short the market. I'm not. I have about 10% of my buying power deployed in short positions. I've got 3000 shares of SSO to ameliorate the market's strength. I've been spending virtually all my time getting ready for, but not executing, the trades which interest me.

The Russell looks like this right now:

1007-rut

Operating in the favor of the bulls………

  1. Broad uptrend still very much intact;
  2. There's about 8% upside from here before the major resistance at that rectangle
  3. And, just now, AA reported earnings which the market seems to really like.

In the bears' favor……..

  1. Trendline breached;
  2. Massive resistance overhead

Looking closer, we can see the series of lower lows and lower highs, but one good strong day higher could break this:

1007-rutclose

QLD and Its Trendline

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There are two broad categories of short opportunities I am finding – – the first is an inverted saucer that had a huge plunge to March of this year and has recovered all the way back to its failure point. BCS is a superb example of this.

The second are items whose trendlines have been broken. One example – QLD, shown below – is the ultralong on the NASDAQ. Some people don’t believe in technical analysis when applied to ultra-ETFs; I disagree. A chart is a chart is a chart.

1007-qld

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