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.

About that Bounce……..

By -

Whether you're a bull or a bear, if you don't think the market looks weak right now, you need to have your eyes examined (and a check-up……..from the neck up). We've lost 7% in seven sessions, and the trendline crack that occurred on January 20th marked the begin of what has been an uninterrupted tumble.



But what about the "bounce" that would let the bears short even more, and at better prices? Well, it hasn't happened yet. Since we're only dealing with two components here – time and price – there are two stark possibilities before us:

ONE – The bounce won't ever happen, and whatever shorts you're in right now are at about the best prices you're going to see, so you might as well just hang on;

TWO – Prayers delayed are not prayers denied, and the bounce is going to happen on a slower schedule, which means that the ride back up will be a nail-biter for everyone.

Of course, a third possibility is that we not only get a bounce, but we push right through to new highs for reasons I can't fathom (the miraculous economic healing power of high-speed trains to Anaheim, perhaps?) I am dismissing this as a realistic possibility, although my stops would get me out of my positions eons before such a thing were to occur.

The percentage of my portfolio committed to positions has been bouncing between 50% and 70% lately, since I've been taking profits (reducing the percentage) and also loading up on new positions or augmenting old ones (thus enhancing the percentage).

The cold fact of the matter, though, is that this market is Weak with a capital W. I was concerned earnings would goose the market higher. Well, fantastic earnings are everywhere – IBM, Intel, Apple, Amazon – and they've done two key things to the market:

(1) Jack

(2) Squat

I also thought Benjamin Shalom Bernanke's re-appointment would cause the bulls to breathe a sign of relief and bid up prices aggressively, but the same aforementioned dual effects were the net result.

Friday morning gives us GDP for Q4, and the consensus is really, really rosy. If the GDP gives the market another push down, I wouldn't be at all surprised to say bye-bye to the 10,000 level on the Dow. I'm about 62% "loaded" on the portfolio at this point, and I'm ready to increase my short positions selectively if this wimpy market remains so.

The Snark that Marked the Top

By -

As much as I usually enjoy this blog, what I do here isn't easy. I manage money professionally, I manage a charting product, and I blog seven days a week. The vast majority of folks……. 99%+…..have been nothing but sweet and grateful about it. There are a handful of clods out there who are negatively obsessed with me and, for reasons I cannot fathom, make it their business to say nasty things about me. I'm confident Karma is going to take care of them in good time, because the good Lord knows my heart's in the right place.

One of them is reading this post right about now, and he's really, really hung-up on me – – he even watches my videos, and takes the time to tell the seven people that visit his blog about how stupid and inept I am. Mental instability can make people behave in ugly ways.

But one email in particular (from a different person) was especially nasty, and I received it at what apparently was almost the exact top of the market. Allow me to share this little gem:


So this guy thinks Ford is going to 50, and he makes a bunch of snarky remarks, culminating in a prediction that I'm going to get ruined, along with those who have faith in me and my craft.

I cannot know the future, but I try my best. All I can say is, the email – one of the nastiest I've ever received – was an interesting turning point in the market.

0128-prescient =

So what's my point in all this? Simply that extremes in human emotion can be good indicators to market turns. I get very, very concerned when I'm feeling giddy about my own trading, because that means I'm in the danger zone, and if I'm wise, I probably will simply close my positions out and take a break. Likewise, if the snark level gets high – described as the S.A.D. Indicator within the Slocabulary – things are about to turn better for the bears.

Watch your emotions, and watch those of others. Self-awareness is an important element – perhaps the most important element – of trading success.

Much Ado About Nothing

By -

Here's your guide to the day's Bernanke Vote events, for those who weren't hanging on to every tick:


1. Skittishness and nervousness about the remote possibility of Bernanke not getting confirmed.

2. Excitement and anticipation of the cloture vote and, moments after, the vote to re-confirm.

3. Bernanke is overwhelmingly voted in to a 2nd term, and the market inexplicably doesn't give a flying fig.

Buy the rumor and sell the news continues to hold sway.