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.

Sisyphus Redux

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Can bears drop like flies? It surely seems like they can; bloggers that have been wild-eyed bears since last Spring have fully thrown in the towel. Even some authors on this very blog have joined the bull camp. The only stalwarts seem to be our friends in Gainesville, who are back into Wave-Two-Is-In-Its-Final-Throes mode.

As for me, as you know, I've entered a few long positions – – most of which prospered today – – and I will leave it to them to escort me out of my bear cave if they are able to do so. But the preponderance of my positions remain on the short side, and although July has been a cruel mistress to me, I was at least heartened that my fully-loaded portfolio was down only about 0.35% on a day when the Russell was up 2.24%. This kind of severe "underperformance" I can live with, because it suggests that my short positions can still hold their own reasonably well in the face of another triple-digit rise on the Dow.

July has been, almost without interruption, a month for the bulls. You can see how the market has embraced fearlessness with gusto by one look at the emaciated VIX, which has dropped 55% in just a couple of months.

Picture 1

The strength of the Euro, naturally, has played a huge part in July's equity strength. Wasn't the Euro and its continent supposed to be doomed? On June 6th it sure looked that way. Anyway, if we shy away from the high made on July 19th, equity bears will get a bit of breathing room. Otherwise, the "threat" of the EUR/USD moving up to about 1.35 remains.

Picture 2

Looking at the September NQ, the price is getting dangerously close to breaking that descending trendline (I would note, with some chagrin, that the ES has already done so):

Picture 3

For me, I am still watching and waiting for this countertrend to exhaust itself. If we break above June 21st's high, that is another nail in the bearish coffin. If we break above January's highs on the S&P, that's another nail – – and a big one – – which will leave index charts in an even worse muddle than they are now.

Picture 4

Chart on Shanghai (by Mike Paulenoff)

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The Shanghai Composite Index closed higher for the seventh consecutive session, and more importantly from a technical perspective closed above its (now flat) 50 DMA for the first time since mid-April. The strength extends the July rally, which could be morphing into a technically significant key monthly upside reversal.

If the SH Comp hurdles and remains above the June high at 2598.33 at Friday's close, then the benchmark China equity index will register a potentially very powerful positive technical signal that should be associated with a near and possibly intermediate-term turn in trend. Such a signal could have meaningful positive implications for global growth, corporate profits, and equity prices.

Originally published on

The Management Regrets …. (by Springheel Jack)

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…. that the second showing of The Apocalypse planned for the summer may have to be postponed due lack of interest.

We broke 1099 SPX (and ES) on Friday and it seems clear that we are on
the way to 1130 SPX to test the June high. We are trickling up slowly
towards that target and we may well see it this week. Until we see that
tested I'm not expecting to see any major breaks downward and it is more
than likely that the strong support level at 1084.5 ES will hold.

I'm also switching my primary scenario to bullish now, as the evidence
is piling up that we have already seen the low for 2010, and unless we
see some strong evidence to the contrary, then I will be working on the
assumption that the trend for the next few months at least will be up. I
have a longer term view and rationale for that that I will be writing
up and posting in the next few days. It has nothing to do with a genuine
recovery or real economic health, and everything to do with our still
being in another asset bubble that is likely to expand further before

In the short term I've been playing around with the angle of the rising
channel on ES this morning and am happy that I now have it right despite
the lack of a third touch on either side so far to exactly fix the
angle of ascent:


As we've now seen a second touch of the upper channel trendline we
would normally next see a touch of the lower trendline. We could see
that today at a little under 1080 ES, but I would be surprised to see
the strong support level at 1084.5 ES broken by much.

Copper too is trickling up towards the obvious short term target just
over $326. As and when it reaches it we should see some retracement on
copper and most likely on equities too:


Oil is not in a rising channel and I can't see a workable pattern
either, but it has established a strong rising support trendline that I
would be surprised to see broken in the near future. Support is at
$76.75 as I write and rising gently:


One of the few strong indicators that the bear scenario for the summer
might not be finished yet is on 30 year treasuries, which are still
holding the strong rising support trendline from the breakout in April.
I'm expecting this to break in the next few days, and after that
happens, I'm expecting a retracement of much or all of the advance from