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.

Happy 5th Birthday, Slope of Hope!

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Well, it's finally here. Today – this very day – Slope of Hope is five years old.

I started this blog under some pretty happy circumstances. I had, just two months prior, finally sold my company (Prophet Financial Systems) after growing it over a thirteen-year period. Those thirteen years were filled with big ups, huge downs, and a few miracles along the way. It was the farthest thing imaginable from an overnight success story, but it was a testament to persistence and the talent of those who worked at the firm.

I had been reluctant to start a blog, even though I had been a writer in other forms for many years. I felt that starting a blog was just a "trendy" thing to do back in those days, and there wouldn't be any point to it. After quite a bit of external urging, I finally signed up for a free Blogspot account and put together my first post for an audience of zero people. You will not be surprised to know that the post was about a bunch of bearish trades I had put on.

The audience grew from dozens (friends & family) to hundreds (Prophet users) to thousands (as word of mouth spread) to millions (OK, that's not true – but it seemed the natural next step).

Slope has, over the years, developed its own culture (and even its own language). Even though the markets have been through what seems like fifty years of changes in the past five years, a few things have remained constant on this blog:

+ A certain level of bearishness (ranging from jumping-up-and-down apocalyptic to, more recently, tempered and mildly skeptical ruminations about the state of the world);

+ Plenty of charts;

+ A deep level of commitment and, when needed, protectiveness amongst Slopers

It would be more mirthful – is that a word? – to be celebrating this quintet of solar cycles were it not for the preceding annus horribilis. But God knows we've gone through worse and, in the end, prospered. I want to extend my humble appreciation to everyone here for being a part of this little corner of the web.

What we're doing collectively is important, I think, for our mutual edification. You helped build it. Thank you.

From this day to the ending of the world,

But we in it shall be remember'd;

We few, we happy few, we band of brothers;

For he to-day that sheds his blood with me

Shall be my brother; be he ne'er so vile

0329-birthday 

10 Year Yield Inverted H&S (by Gary Tanashian)

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Excerpted from the March 28th edition of Notes From the Rabbit
Hole, NFTRH78:

When viewing the current market situation through a lens of
inflationary policy vs. natural deflationary forces seeking to correct
sublime levels of excess, a geek like me looks at the chart of the TNX
and is absolutely transfixed.

Tnx

Pictures like this, rather than the likes of the nominal Dow above are a
big reason for the ongoing ‘risk is high’ droning in NFTRH. It is no
coincidence that the risk profile was raised from the previous bullish
stance as the TNX spiked to form the neck line at 4% in late
spring/early summer, 2009.

The crux of the issue is that a
breakout from the Inverted Head & Shoulders targets 6%. A
correlated rate on the 30 year bond that we usually watch is close to 7%
off of a potential H&S of its own. The problem is that these
levels trigger our biggest picture monthly ‘line in the sand’, the 100
month exponential moving average, which changes something that has been
assumed for decades (the US government’s ability to use its treasury
bonds, its confidence, to inflate at will by selling debt and printing
money). The implication is that the change would be a secular thing,
possibly introducing a hyperinflationary spiral.

I must admit to
being confused by Captain Bernanke’s ‘damn the torpedoes’ inflationary
approach in the face of a bond market on the verge of rebellion while
certain Fed members sound increasingly hawkish tones. The wizard’s
‘backbone’ is that line – the monthly EMA 100 – under which treasury
yields have remained for all those decades of confidence. The neck line
shown above, if broken, triggers a level that busts the backbone.

We
are at an extremely high risk juncture for both hyperinflation and
deflation, because we are right on the line between the two with no
confirmation yet as to which way this thing is going to break. Some Fed
officials have expressed concerns that relate to the picture above, but
thus far, the one who matters most, Bernanke remains unconvinced that
inflation will become a problem.

Bonds and the TBT

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In spite of the rates established by the government being basically 0%, the rates in the true market – the bond market – have been creeping higher. Although TBT (the ultra-bearish ETF on bonds) has been bouncing within a range of about 46 to 51 over the past few months, it is worth considering whether a pop in interest rates will give TBT reason to break out. A push above $51.21 would certainly seem bullish for this security.

0329-tbt