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 Two Sides of Oracle (By Jeff Patterson)

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A quick look at a short term trade I took yesterday in ORCL on the short side. In my experience after gap ups and when you get the formation outlined in the blue lines, its a sucker move that most always leads to a quick and abrupt correction down to the 30 or 50 day moving average in short order, which is where I will cover and go long. I am just pointing out formations that work well for me a high percentage of the time and it may seem to be counter intuitive based on recent action. None the less I am willing to stick to my high percentage set ups.

However I think ORCL will make a nice long play after the short term correction I believe is coming. I am posting two charts, daily and weekly. The weekly chart clearly shows a triple top breakout, but first they must trap the weak bulls on the daily chart with the current formation and subsequent correction before the sustained up trend truly begins.

Snapshot-75 

Ice Battle 2009

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Having grown up in the Deep South in my childhood, I had almost no exposure to snow or ice. Therefore, as an adult, I really get into snow at any opportunity. Perhaps I should have born in New England instead, since that seems to be where my heart lives.

Here in North Lake Tahoe, I set out with my children to construct a snow fort in order to battle another family (friends of ours). The picture of my fort, below, doesn't do it justice – – – I am particularly proud of the impenetrable ice wall that constitutes our defense shield.

I happily walked up the stream near this fort in order to pull off solid sheets of ice from the rocks. After I assembled all these ice bricks, I poured buckets of water all over the wall, and now that a frigid night has passed, our fort is invincible.

1228-icefort 

I am also not beneath psychological warfare. After the opposing father from the other family left his fort, I gathered up some twigs and embellished the front of his edifice with a new moniker:

1228-fortsuck

I imagine the dread battle will be held late this afternoon, as the sun sets beneath the Sierra mountains. One thin inch of moonlight, and the snowballs will begin to fly.

Canadian Dollar

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Below is a CAD/USD hourly futures chart (not USD/CAD as normally displayed) showing a range of about two months covering 300 points or more.

The CAD broke out overnight, but with USD strength this morning, has pulled back to retest double support at the top of the range. Even with USD strength the past week, the CAD has been stronger. Stay tuned for the next 300 point move.
CAD 12_29_2009 (60 Min) - Range - small

Below is the USD/CAD daily chart

$USDCAD 12_29_2009 (Daily) spot

2004 or 1938?

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Gary Savage has suggested that we're perhaps entering a 2004-ish market in 2010, and I can see the basis for his rationale. Here is 2002-2004, with some tinting showing the successive eras I've marked:

1229-past 

….and here's the current market:

1229-present
 
Of course, the question is: when does the yellow phase into the blue? Strictly on a percentage basis, we've got more yellow in our future – maybe even another 1,000 Dow points. Anyway, this is an analog worth watching. I still have a certain degree of faith in my 1937-1942 analog, although this rally is getting a bit long in the tooth to support it indefinitely.

Dumb Luck

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Even though I'm not a particularly social creature, I'm in touch with a lot of different people. They come from all walks of life, and all sorts of social stations. They range from students who can't afford their rent to billionaire entrepreneurs; they range from savvy-well read investors to people whose idea of a newspaper is USA Today. So I talk to a lot of different folks.

My general impression these days is that the ones who have done the best in 2009, and who are most optimistic that Things Are All Right Now, are at the low end of the IQ scale, or at least the experience & knowledge scale. Now, I know what some of you are thinking: "Oh, Lordy, poor old Tim has resorted to name-calling, since 2009 has been such a stinker." Nope. Sometimes the well-read and experienced make the money. Sometimes the dummies do.

I think the people throwing money into crap NASDAQ companies in the late 1990s were really dumb. They also got really rich. The stock market is not an IQ test. I believe one's results in the market are a direct reflection of who you are as a person (which is a combination of intellect, temperament, experience, discipline, knowledge, etc.) and what the market is at that particular point in human history. Sometimes the market agrees with a person; sometimes the market does not. This year, the market hasn't agreed with me.

Of course, our collective goal is to be as market-neutral as possible. If the dumb people are making money, great, then be dumb! Think dumb, dream dumb, and act dumb. But that's far easier said than dumb (pun intended).

Because, as I've beaten to death all year, most of the rise in equity prices has been from artificial means (use yesterday's ~25% gains in FNM and FRE as a microcosm of 2009). There are exceptions. I think AAPL, AMZN and GOOG, for instance, are sensational organizations that are printing money, and God bless 'em for being real businesses with real products, real customers, and real profits. But – and I'll say this as passively as I can muster – my view is that equities are not undervalued. To say the least.

But the dumb, overvalued market in December 1999 kept rocketing higher into 2000 for another ten weeks, and who am I to say it won't continue here? But I'm a chartist, if nothing else, and the charts I'm finding – and shorting – are bearish plays. I'm not going to buy Amazon because it has had a good 2009 (nor am I going to short it, by the way).

I do my job one day at a time, one chart at a time, and I have to be real with myself, for better or worse. To thine own self be true.