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 Bulls’ Own February 5th

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I've spent a huge amount of time over the past week or so discussing, thinking about, and agonizing over the whole "February 5th" topic (e.g. "why didn't I cover?") I've learned a tremendous amount from discussions with Slopers, as well as email exchanges, and I'm confident I'm much, much less likely to go through something like that in the future.

In retrospect, so many of these graphs I'm newly aware of were screaming "get out!!!" on that fateful day. In retrospect, it seems so obvious (doesn't it always?)

I would submit to you that the bulls are in a similar state at this point. Many of these graphs are at extremes, and while people seem to have already thrown the bears a funeral until 2012 (which seems to be the year constantly cited as the only real opportunity for a bear market to occur again), I would suggest the bulls' certitude of unending gains may be cause for regret a month from now.

0309-nyhl 

I will mention that I have tempered my bearishness in two major ways: (1) taking on more bullish positions than I believe I've had in a very long time, which should be obvious given the plethora of long ideas lately; (2) keeping the size of my bearish bets far more modest than before.

Should things ever kick in again to the downside for a meaningful amount of time, I shall be watching graphs like the one above (and a series of others I have bookmarked) for clearer signals about trend changes. I appreciate everyone's help in helping me learn about these helpful charts.

Flying PI(I)GS (by cantabnomad)

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Contrary to their Northern brethren, Portugal, Italy, Ireland, Greece and Spain peaked in October 2009. What followed is now history, and it is widely claimed that Greek problems will be contained.

Below is a GDP-weighted composite index of stock markets of countries listed above. Combined, their GDP is 90% that of China (in nominal USD) – so this is no small fish. I present my favoured scenario in this daily chart. The declines so far have been impulsive; rallies corrective. Of further note is the fact that 55 and 85 day moving averages are falling, and the 55 day one is about to cross the 200 day one from above (bearish).

An alternative scenario for this funky group is presented below. While it is certainly possible that PI(I)GS will fly in what would be a massive "C" wave higher, I consider the outcome unlikely. This will change should we get closes above January 2010 levels, which would confirm the move since October 2009 as an ABC correction lower, pending further upside.

Originally published at http://observemarkets.blogspot.com/