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.
STEC as an Object Lesson
I want to share with you a trade from September that holds a lesson for us all.
The stock is STEC. I shorted it at 40.17 in mid-September. A week later, I covered the short at 30.22 for a nice profit. The stock had fallen about 25%.
Here's an updated chart (STEC is, I think, the top percentage loser today on the market, or at least very close to it):
The lesson is the same for bull and bear market alike – – it makes sense to adjust stops as a position moves in your favor. I am much, much better about this (especially for shorts) than I used to be. But closing a short because It Sure Has Gone Down a Lot isn't a good reason to do so.
Cisco (CSCO) at Multiple Timeframes
With CSCO reporting earnings after the bell today, I thought it would be fun to take a look at its chart patterns on multiple timeframes.
Starting with the long-term chart from 1990 to present, CSCO exhibits a classic bullish ramp, from $13 in 1990 to the high $70s at the peak of the dot-com bubble in 2000. The 10 year line of support wasn't violated until the 2000 selloff, but it shows how significant violations of long term support can be. The selloff was brisk at first, but continued on a downtrend through most of 2002. The 2002 low at about $10 established the base of a new, low slope trading channel that continues to today (at about $15). Today, the top of the channel is in the high $30s, representing the realistic potential upside in this stock at present. Within the major channel, there are minor downsloping channels, which represent zones of support and resistance as the price moves within the major channel.
Zooming in in time to the last four years we can see the minor channels more precisely. Currently, the price is bumping up against the resistance of a channel top in the high $24 area. It will be interesting to see if the upcoming earnings event will provide the impetus for the price to pierce this resistance. If earnings are not well received, there is the potential to fall to the bottom of the channel at $20. Longer-term support is at about $16, with the excursion below that point in March of 2009 being unlikely to be repeated unless the markets experience another period of intense panic selling.
The 1-year chart shows the depths of the March selloff, followed by an ascending wedge channel. The base of this channel was recently violated, first on October 28, then again, with more conviction on October 30th. This opens up the possibility of a fall to short term support at 21 and longer term support at $20 (the bottom of the channel in the 4-year chart).
The 3-month chart shows the broken trendline in more detail, and a zone of very short term support at about $22.60. If this support fails, $21 is the next likely support. The short term high probability trading range for CSCO is between the support at $21 and the resistance of the broken trendline at about $24.40.
GDX Beckons Again
Selling short at these levels with a stop at 49.01
Content Dries Up
It's sad for me to see bullies win.
As I step outside the pleasant garden of Slope and look elsewhere, I see quality content and analysis going underground. Evil looks like he's starting to roll up the carpet. And Sol has posted his "last trade" as he now goes gently into the good night.
There are a couple of (extremely minor/barely trafficked) sites that are largely responsible for this destruction, and it's a shame. The sick part is that they see themselves as somehow virtuous. Remember that Lucifer means "bearer of light." Baseless mud-slinging and accusations are uncalled-for, and – who knows – they could wind you up in court.
In my own world, the large body of guest contributors briefly contributed a bunch of content, but that's dried up to nothing. I guess it becomes apparent to people that creating quality material is a lot of work. Having done about 10,000 – yes, ten thousand – posts over the years, I'm puzzled that folks can't chip in one or two a week, but I understand people have plenty else going on in their lives.
Added to which, the inter-guest-writer drama got ridiculous. So in a way, I guess I'm relieved that guest content has dried up. I'll be wise and not go into the details.
In any case, I'll just keep doing what I've always done – – sharing my own thoughts (and a few trades) as time permits. I'm grateful to the community here, and the diminution of content elsewhere strengthens my resolve that we all need to have a place to convene, learn, and discuss. I'm not going to let bullies, half-wits, and obsessed/jealous freaks spoil the show.
