In the early 1980s, when most of my peers were listening to the Scorpions or Judas Priest, I was listening to Gilbert & Sullivan or Cole Porter. A fondness for older music lingers to this day. I offer below a marvelous Porter tune, which seems apropos for last month's peak.
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.
Why are Indicators Important? (by Gary Tanashian)
Hi Slopers, this is a post I just put up at my regular blog, and thought some people here might appreciate the message. Although I am sure my geekoid status is probably more information than you want or need to know. :-)
Here on SOH, you have seen me ramble about the importance of the Chinese FXI as it led the SPX southward, the gold-silver ratio as a measure of liquidity (or lack thereof) and other things I use as indicators to try to get a leg up. Looking at the nominal SPX chart, I do not see a whole lot of difference from the June/July event. But this time I expect a very different eventuality after some upside relief to around the SMA 50. Anway, the post…
Why is it so critical to watch indicators like leading market ratios,
sentiment, the ratio of gold to silver, money supply, etc.? Well, one
look at this nominal SPX chart provides an answer; trying to figure out
the nature of a similar downturn to that of last June/July devolves
into a mere guessing game if all you go by is straight technicals on
the SPX daily chart.
SPX dumped the neckline of a small H&S topping pattern, spent 4
days below it and then said screw this, time for hope and greed to make
a triumphant return. It was right around that point that I began to
realize that my projections for the duration of Hope '09 might need to
be expanded. Boy, did hope and denial ever expand… right into this
latest break.
But it is more complex than simply watching indicators. The
gold-silver ratio for example rose strongly in June/July (implying
market downside), but broke out of its weekly downtrend line for only
one week before falling back. Current weekly GSR has now completed two
full weeks of breakout from its most recent downtrend line, has
constructed a good looking MACD and formed an inverted H&S bottom
pattern.
Yes I know, you have to be a total geekoid get-a-lifer to be into this
stuff. Well, if you knew me in real life you would see that I am not
very cool and do not display a dynamic personality. But I am into this
shit because – call me weird – I just love to make money or at the
least, preserve capital and remain as detached from convention as
possible. It's the secret recipe of succeeding in the financial
markets.
Sorry for the self-involved last paragraph but you must understand,
you, the blog reader are all I have got (aside from NFTRH subscribers
who actually assign a monetary value to my opinions) when it comes to
communicating these things. In real life nobody but nobody wants to
hear it. Now that's
weird if you ask me. Most people want to make and protect money, but
when it comes to the necessary work to do so, it's not happening.
Thus ends another technical analysis post that jumps the track.
Rosebud Frozen Peas
I've got to say, I'm surprised at the market's action today. Although I covered a large number of shorts on Friday (taking my commitment from 90% to 50%), I at least didn't go hog-wild buying into the frenzied action late in the day, which turned out to be strictly a sucker's rally. My one long – SLV – I sold today at a small loss, and nothing has gotten any traction today. I've modestly increased my short commitment up to 60% of my portfolio (no longs of any kind). It's kind of a quiet/grind-y day, so take a moment to enjoy Orson Welles.
EUR/JPY Points to General Market Weakness
The topping pattern in EUR/JPY was a good signal in September 2008 of the plunge to come. It may well serve that purpose again here.
The Waiting Game
First off, even though I've never cared one little bit about watching sports, congratulations to the Saints. I'm a native Louisianian, and I know this is a very big deal for them. Plus – no surprise here – I tend to root for underdogs. So a Slopey salute to the Fleus de Lis!
Second, I've gone from "fully committed" mode (early Friday morning) to "half-committed" mode on the bear side. It seems altogether probable to me that a push higher to – – oh, I'm guessing around 1090 to 1100 on the /ES – – is present, and I'd rather wait. There are a ton of opportunities to be had at that time, and I intend to try my best to make use of the upside via ETFs for the time being.
