We've been collectively trained to be utterly paranoid of any weakness, but the easiest assumption is that the /ES has about thirty points of vulnerability to its breakout point.
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.
New York Summation Index – Sell Signal (by Biffermas)
A few weeks back Tim asked Slopers to submit tools and
indicators that accurately capture turning points in the market, and
specifically the March 2009 bottom. I
don’t remember who posted the weekly stochastic of the NYSE Summation Index
(sound off!). I made a comparison of the
summation index signals with a weekly chart of the Russell 2000 futures
(RUT). Signals are based on a simple
crossover of the 5,3 Stochastic once it hits extreme levels. Since September of 2008 there have been eight
sell signals generated, and each yielded a drop of at least 30 RUT points. Looking at the chart most signals produced
far more.
All bets are off for this market. Since the sell signal was generated last week the RUT rallied 18 points!
Exploiting the System (by Retracement Levels)
At Retracement Levels, we usually look to the numbers to find positive expectation, good probabilities, or simply inefficiency and dysfunctionality in certain trading vehicles, to exploit the market system un-efficiencies in our favor.
Here below we would like to present a very simple strategy that emerged comparing the behavior of certain LONG and SHORT securities based on the same underlying.
This strategy can produce risk-free profits to anyone able to follow it for a period of time long enough to make the strategy profitable (usually a few months).
This strategy works at best during trends and suits particularly well investors and mutual fund managers because it produces gains just by holding the positions (you can literally 'sleep' on the positions until they are profitable).
The strategy can be applied to many securities that we have analyzed, but in this example we will disclose only the QLD+QID Long+Short Strategy. Please be aware this strategy may not work on other type of securities, so the suggestion here is that you apply this strategy only on QLD and QID, unless you are able to verify on what other securities it will work (not difficult to do: you will just need a charting software, some data and Excel).
Here below is the first slide we wanted to show you (click on the images to pop-up a fully expanded view).
The strategy in the example above consisted of
buying the same amount (i.e. $100) of QLD and QID on July 2006 and then
holding positions until October 2007. Because of the asymmetrical diverging
nature of these 2 specific ETFs (QLD and QID), you would have realized a
22.23% profit on the total capital invested (i.e. $100+$100=$200), or
$44.47, regardless the direction of the market.
This happens because of the method used
to calculate the price of QLD and QID in relationship to their
underlying (the Nasdaq100 index) and also because of the way you invest
on them in a long+short strategy.
The final result of this deviation between the two ETFs is that one of the two vehicles will always produce a
smaller loss or a bigger gain than the other, when holding the positions for a sufficient amount
of time.
The second image (below) shows us the same strategy on another period, from October 2007 to March 2008 (and onward) and as well here, in only four months, the strategy would have realized a 10.22% net profit on the total capital invested, again regardless the direction of the market (you would have been both long and short).
You can calculate by yourself what the gains would have been in the following period, where it says: 'do it yourself' – it's a good exercise to see by yourself how this strategy works.
Finally, the chart below shows that by being long and short QLD and QID from the bottom of the crash in November 2008, you would have made a +200% profit on QLD and a -83% loss on QID.
Betting $100 in each direction ($100 long QLD + $100 short QID), you would now have a 317$ account (more or less) or a >58% profit in a year, a net gain realized without taking any risk, without betting on a specific market direction (e.g. without betting on a continuation of the 2008 Bear Market).
The Long-Short QLD+QID trading strategy presented here is an excerpt from a new subscription package recently created and named "TRADING IDEAS" (you can find more about it here or contact us for info).
You can find more free trading ideas on the Retracement Levels Blog.
If you are interested in a trial of the Retracement Levels services and
tools for professional traders, try out our 7-Days Trials.
Regret (by Fayssoux)
Sensing a bottom in December 2008, I ran a screen of small cap, debt-laden firms that had been beaten down more than the market on average, and then selected a subset I thought worth looking into individually. At one point in early 2009, this portfolio was down 40%. It has skyrocketed since, up 300% since 12/09/08 when I ran the screen and started tracking the stocks (look at ZQK recently!). So much for the death of buy and hold. If only I had held on…
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Ticker | Company | Price | Change% | Volume | Transaction | Date | Shares | Cost | Market Value | Gain$ | Gain% | Change$ |
1. | ZQK | Quiksilver Inc. | 5.55 | -2.46% | 1,816,506 | Buy | 12-09-08 | 1 | 1.35 | 5.55 | 4.20 | 311.11% | -0.14 |
2. | PSUN | Pacific Sunwear of California Inc. | 5.92 | 4.96% | 1,114,473 | Buy | 12-09-08 | 1 | 2 | 5.92 | 3.92 | 196.00% | 0.28 |
3. | ABD | ACCO Brands Corporation | 7.89 | -2.83% | 100,461 | Buy | 12-09-08 | 1 | 2.1 | 7.89 | 5.79 | 275.71% | -0.23 |
4. | GBE | Grubb & Ellis Company | 2.20 | -3.08% | 465,213 | Buy | 12-09-08 | 1 | 1.15 | 2.20 | 1.05 | 91.30% | -0.07 |
5. | CMLS | Cumulus Media Inc. | 3.43 | -0.58% | 64,177 | Buy | 12-09-08 | 1 | 1.22 | 3.43 | 2.21 | 181.15% | -0.02 |
6. | VETS | Pet DRx Corporation | 0.30 | -9.09% | 2,000 | Buy | 12-09-08 | 1 | 0.37 | 0.30 | -0.07 | -18.92% | -0.03 |
7. | BNHN | Benihana Inc. | 6.42 | 1.26% | 8,750 | Buy | 12-09-08 | 1 | 1.72 | 6.42 | 4.70 | 273.26% | 0.08 |
8. | DXCM | DexCom, Inc. | 9.65 | -2.23% | 336,820 | Buy | 12-09-08 | 1 | 2.24 | 9.65 | 7.41 | 330.80% | -0.22 |
9. | KONA | Kona Grill Inc. | 4.38 | 7.35% | 29,693 | Buy | 12-23-08 | 1 | 1.35 | 4.38 | 3.03 | 224.44% | 0.30 |
10. | RAMR | RAM Holdings Ltd. | 0.70 | 0.00% | 0 | Buy | 12-23-08 | 1 | 0.32 | 0.70 | 0.38 | 118.75% | 0.00 |
11. | DDS | Dillard’s Inc. | 25.97 | 1.29% | 924,605 | Buy | 12-23-08 | 1 | 3.54 | 25.97 | 22.43 | 633.62% | 0.33 |
12. | UIS | Unisys Corporation | 36.85 | -1.56% | 405,869 | Buy | 12-31-08 | 1 | 10.1 | 36.85 | 26.75 | 264.80% | -0.58 |
Total | 12 Stocks | -0.28% | 109.25 | 81.79 | 297.87% | -0.3 |
On March 13, a few days after the demonic low of 666, Tim posted a list of lottery picks. I tracked the portfolio. As of today, a little more than a year later, it is up 260%.
No. | Ticker | Company | Price | Change% | Volume | Transaction | Date | Shares | Cost | Market Value | Gain$ | Gain% | Change$ |
1. | CAVM | Cavium Networks, Inc. | 25.63 | -0.50% | 297,079 | Buy | 03-13-09 | 413 | 12.12 | 10573.43 | 5573.43 | 111.47% | -53.63 |
2. | CDNS | Cadence Design Systems Inc. | 6.81 | 0.74% | 1,478,196 | Buy | 03-13-09 | 1,220 | 4.1 | 8304.88 | 3304.88 | 66.10% | 60.98 |
3. | FITB | Fifth Third Bancorp | 14.24 | -0.77% | 13,640,777 | Buy | 03-13-09 | 2,874 | 1.74 | 40919.54 | 35919.54 | 718.39% | -316.09 |
4. | HBAN | Huntington Bancshares Inc. | 5.88 | 0.51% | 31,600,404 | Buy | 03-13-09 | 3,205 | 1.56 | 18846.15 | 13846.15 | 276.92% | 96.15 |
5. | GLG | GLG Partners, Inc. | 3.11 | -2.51% | 1,003,102 | Buy | 03-13-09 | 2,083 | 2.4 | 6479.17 | 1479.17 | 29.58% | -166.67 |
6. | KLAC | KLA-Tencor Corporation | 31.61 | -1.03% | 2,745,672 | Buy | 03-13-09 | 274 | 18.25 | 8660.27 | 3660.27 | 73.21% | -90.41 |
7. | KWK | Quicksilver Resources Inc. | 14.93 | -2.74% | 1,726,524 | Buy | 03-13-09 | 1,044 | 4.79 | 15584.55 | 10584.55 | 211.69% | -438.41 |
8. | LINE | Linn Energy, LLC | 25.98 | -0.61% | 960,598 | Buy | 03-13-09 | 352 | 14.21 | 9141.45 | 4141.45 | 82.83% | -56.30 |
9. | LNG | Cheniere Energy, Inc. | 4.89 | 4.94% | 3,587,915 | Buy | 03-13-09 | 1,188 | 4.21 | 5807.60 | 807.60 | 16.15% | 273.16 |
10. | LVLT | Level 3 Communications Inc. | 1.63 | -1.21% | 2,257,214 | Buy | 03-13-09 | 7,813 | 0.64 | 12734.37 | 7734.37 | 154.69% | -156.25 |
11. | LNET | LodgeNet Interactive Corporation | 7.20 | -0.14% | 140,981 | Buy | 03-13-09 | 7,813 | 0.64 | 56250.00 | 51250.00 | 1025.00% | -78.13 |
12. | MTL | Mechel OAO | 29.35 | -3.68% | 2,372,832 | Buy | 03-13-09 | 1,377 | 3.63 | 40427.00 | 35427.00 | 708.54% | -1542.70 |
13. | OZM | Och-Ziff Capital Management Group LLC | 17.59 | 3.71% | 955,604 | Buy | 03-13-09 | 791 | 6.32 | 13916.14 | 8916.14 | 178.32% | 498.42 |
14. | SFD | Smithfield Foods Inc. | 20.85 | -2.34% | 1,759,318 | Buy | 03-13-09 | 642 | 7.79 | 13382.54 | 8382.54 | 167.65% | -320.92 |
15. | WFMI | Whole Foods Market, Inc. | 37.19 | -2.26% | 1,407,526 | Buy | 03-13-09 | 350 | 14.3 | 13003.50 | 8003.50 | 160.07% | -300.70 |
16. | WIN | Windstream Corporation | 10.99 | -0.48% | 2,461,238 | Buy | 03-13-09 | 705 | 7.09 | 7748.24 | 2748.24 | 54.96% | -37.38 |
17. | WYN | Wyndham Worldwide Corporation | 26.37 | -1.75% | 1,454,318 | Buy | 03-13-09 | 1,214 | 4.12 | 32002.43 | 27002.43 | 540.05% | -570.39 |
18. | XL | XL Capital Ltd. | 19.41 | -0.77% | 2,834,133 | Buy | 03-13-09 | 1,344 | 3.72 | 26088.71 | 21088.71 | 421.77% | -201.61 |
19. | CCRT | CompuCredit Holdings Corp. | 5.35 | -1.11% | 58,635 | Buy | 03-13-09 | 5,000 | 2.28 | 26750.00 | 15350.00 | 134.65% | -300.00 |
Total | 19 Stocks | -1.00% | 366619.97 | 265219.97 | 261.56% | -3700.8 |
Hindsight is of course 20-20 but I guess I offer this up to the trading gods as admittance of defeat and a form of emotional capitulation that might bring on at least some measure of downside correction. What a rally it has been in the lottery picks, wow.