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.

Two Possible Trades: 1 Long, 1 Short (Jack Damn)

By -

Avatar92

I ran through my scans tonight looking for a short set-up
or two and didn’t find much (no surprise there). I’m still waiting for the
broader market to roll over to reveal better topping patterns. I did, however,
find a nice looking potential Long and one potential Short if the market
cooperates and dies. Let’s look at the potential Long play first.

01
 

 

This is a daily chart of EMC Corp (EMC). As you can see
it made a nice breakout today on better than average volume. The short term
trend-line is healthy and price is cleanly above the 21-day Exponential Moving
Average. I set the initial Stop Loss at 18.30. The stop is based on a simple
trailing volatility stop. It’s two times the daily Average True Range (ATR). In
this case a 10-period ATR.

 

I realize stop losses are controversial, but if you don’t
trust yourself to take yourself out of a bad trade before major damage is done
to your trading account, then use one. Stop losses aren’t perfect, but they’re
the best we can do for situations where price begins to run and we mentally
freeze.

 

Zooming out a bit on (EMC) reveals that it is indeed in a
strong uptrend.

02
  

If the market wasn’t so overbought, I’d recommend sizing
in quickly, but with the market stretched so much, it might be best not to size
in full right away. I found many good looking Long trades, but it’s impossible
to recommend becoming aggressively long at this point. I don’t think the odds
favor it in the short term even with the Fed giving away free money.

 

The one Short set-up I found interesting was this daily
chart of JC Penny (JCP):

03
 

 

The last three days of price action have been kind of
funky, but that’s why I like (JCP) as a possible short. We kind of have a
“hole in the wall” with that gap down three days ago with above
average panic volume. The uptrend was cleanly broken, the bulls tried to fill
the gap, but price quickly found support at old resistance (for now).

 

Since the market isn’t correcting like everyone and their
dog is expecting it to, if I’m to play (JCP) short, I’d go in 1/2 as a
“pilot position”. If it takes out that support line and violates the
50-day EMA quickly, I’d load up and trail my stop.

 

Cheers.

Jack Damn

Postcard banner_rasterized copy
 

Woke up in the morning feelin’ like P Diddy (by Fayssoux)

By -

Signs of extreme bullishness abound, whether in the plummeting VIX, net long speculative interest in the Nasdaq, put call ratios, bullish percentage indices, new highs, Dow 11000 hoopla, the Newsweek cover story on the Comeback Country, the $SLIX indicator, they almost got Art Cashin to capitulate on CNBC  et. al.  Someday, maybe soon, this will reverse direction, but who knows if there will be any bears left to see it happen.  One measure of declining bearishness is seen in short interest.  Tabulated below is some basic information from shortsqueeze.com relative to popular ETFs and a couple glamor stocks.  The upshot — the wall of worry represented by shorts is a smoldering pile.  To be short has been to be annihilated. It is within living memory when all these values were much higher, and ETFs were often hard to borrow. Will this evacuation of standing shorts accelerate the speed of the decline should it ever happen?  Stands to reason, but reason is not leading the charge right now…

Ticker Sector/Type Short Int Ratio Short % Decrease
XLP Consumer Staples 3.8 -20.9
QQQQ Nasdaq 1.4 -18.0
IYR REITs 5.2 -16.4
SMH Semiconductors 2.3 -15.6
IWM Russell 3000 3.4 -12.7
XLY Consumer Discretionary 3.2 -12.3
GDX Gold & Silver Miners 1.1 -12.2
XRT Retail 5.8 -11.3
XLF Financials 1.5 -10.2
SPY S&P 500 1.3 -7.6
XLB Materials 2.0 -7.0
GLD Gold 1.0 -3.1
XLE Energy 1.7 -1.9
IBB Biotech 9.5 1.1
EFA MSCI EAFE 2.3 1.4
IWN Russell 3000 Value 2.3 3.2
AAPL Tech 0.5 -35.2
GOOG Tech 0.9 -27.3
FCX Copper 2.0 -2.8
BAC Financials 0.6 -11.9

18 Stocks Trading At A Huge Discount (By Ryan Mallory)

By -

Below are the screen results of stocks that have a book value per
share that is more than its price per share. Like last time, I just want
stocks selling at HALF their book value. Also, I wanted only those
stocks that are showing an increase in interest from the institutions
(i.e. they are gobbling up the shares), along with the volume to support
it.

This time around the screen results are four less than before, and
heavily tilted towards insurance companies (in a big way!), REITs, and
other financial companies and banks. So, do we now see a sector rotation
back into the financials here in the near future? No way of knowing for
sure, but this is where your most undervalued stocks are hanging out
at.

I'll submit a post tomorrow with a few nice short-setups with charts – that'll make me "Fair & Balanced"

Originally Posted By Ryan Mallory on his blog at SharePlanner.com

Post ideas copy

The Ugly American Blogger

By -

Postcard from france copy Hello (finally) from Paris. I am able to type this for one reason only – – – I went ahead and bought a new laptop. My poor Dell was just too sick to be revived, and in spite of the utterly heroic efforts of Royale with Cheese (author of oft-cited ETF Corner and a host whose generosity has yet to find any limits), I decided to bite the bullet and get a very Euro laptop to make do. Otherwise, I’m completely locked out of managing my positions for the week.

As I mentioned a few days ago, the French style of keyboards is different from those to which I am accustomed, but since I’ve modified Windows to simulate an American orientation of keys, I am all right, provided I don’t actually look at the keyboard (whose keys are labeled different, which would send my brain into a very damaging loop).

We are still badly jet-lagged, with the family being up and ready to take on the world at about 2 in the afternoon. I figure by the time we are fully acclimated, it’ll be time to go home and go through all this jet lag nonsense once again.

As for the markets – – it was actually a bit of a relief to see the bulls got their long-desired 11,000 level at the closing bell. Earnings, I think, are going to be the prime movers for the next couple of weeks. The news to Greece didn’t cause the rollicking rally the bulls might have expected. My own positions did pretty well Monday – – some longs (like VMW) continue to push above nicely-formed patterns, and short shorts (like USO and X) fell in spite of the Dow closing at a new record. So in spite of being completely out of the loop for the entire trading day, it ended up OK.

I’m almost certainly going to mention this again, but forgive me as I say once more how grateful I am that Leisa and the guest contributors are keeping the blog going. You know how guilty I get if I don’t post every few hours, so being basically on another planet for more than a week had the potential of sending me into spasms. Fellow Slopers have saved the day!

Anyway, I doubt I’ll be doing any market- or idea-oriented posts at all this week. Best of luck to everyone, of course, and thanks again to my host here in the City of Lights, Royale, whose blog you might want to visit. Au revoir!

8:22 a.m. (EDT):  Leisa here.  No, I did not break the blog.  Disqus is currently undergoing maintenance.