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.

Bang! Margin Weighted DATR (by Trade Flight Plan)

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A couple months ago, we posted our last analysis of the dollarized
daily average true range (DATR) across the most popular futures
instruments.  With the incredible moves in the markets lately, it's time
for another update.

At the suggestion of another sloper (excellent suggestion by the
way), we revised our analysis to reflect margin weighted
dollarized average true range (mwDATR).

We show the mwDATR as a percentage.  This is the return on investment
percent (ROI) possible in a trading day, based on the dollarized
average daily moves of each futures instrument relative to the initial
margin/performance bond requirements set by the exchanges.  Brokers can
differ in their margin requirements, but we use the exchange margin
requirements for a common baseline.

As an additional nifty feature, we now use Google docs to share this
analysis, so you can further slice and dice to your heart's content. 
Liquid futures instruments favored by retail traders are highlighted in
yellow.

The margin weighted results are interesting, with the most popular
big indexes ranking toward the bottom.  The Euro, oil, gold, and the
Russell are at the top of the list.  For example, oil has been moving an average of more than $2,000 per contract each trading day.

We firmly believe that in putting our capital at risk every day, the
instruments we trade must be worth the effort, must be liquid, and must
respect repeatable trading strategies.  The opportunity exists for
astute traders to make a small fortune each day.  Of course, this
extreme bang for your buck can work both ways.  We cannot stress enough
the discipline, focus, and diligent trading rules required to trade
these instruments.

Click on the image to access the Google docs electronic spreadsheet.

Originally published on Tradeflight.com

Gold – The Battle is Already Won

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Warning Slopers… GOLD BUG ALERT!!  😉

This morning's email from gold general Jim Sinclair – under siege yet
again from the troops in the "community" – prompts this morning's post.

Mr. Sinclair often writes with a war mentality pitting the gold
community against the evil bullion banks – and a good chunk of the rest
of the financial world.  Don't get me wrong, I think there is plenty of
evil out there (it seems that on Mondays following a meeting or
conspiracy of the assembled dignitaries in the G20 my investment
accounts take the hit) but apparently a good chunk of the "community"
gets its panties all in a bunch every time gold takes the hard hit.

 That is because nearly 10 years into the secular bull market in the
rebellion against dishonest monetary systems a casino mentality – so
well formed through the previous 20 year secular bull market in paper
assets (stock certificates, bonds, derivatives, etc.) – remains intact. 
This includes a great number of self-described gold bugs in my
opinion.  In other words, the "community" does not tend to believe its
own bullshit on balance.  If they did, they would see opportunity or at
least sit tight during these phases that have been all too common all
the way up since 2001.

There is an opportunity to own value shaping up and I suspect the usual
casino players will fail to capitalize while the minority capitalize
once again.  Missed the last buying opportunity this space identified in euros?  Well, another opportunity is on the way. 
Who will capitalize and who will be immobilized by fear?  Gold in USD
is also presenting an opportunity.  In fact, name me a major developed
society that is not tramping out its currency for the purpose of
manufacturing politically expedient economic growth and I will show you a
society of relative value from an investment standpoint.  There are
those in ascension and it is no coincidence that those are targets for
my investment dollars in the big picture.

For now, gold is a monetary value anchor and in a world of eroding
confidence in politicians and policy makers who use official paper and
digital money, gold represents value; nothing more, nothing less. 
Still, it is always great to exchange confidence paper for value when
value goes on sale.  You do not buy gold when everybody loves
it.  You understand who you are and if you perceive that your personal
situation is in need of this value anchor you buy gold when the public
hates it, when the speculators (ultimate casino patrons) are dumping and
you-know-who is buying or buying to cover.

The battle was won in 2008 when an uber-opportunity presented, most
failed to capitalize (thank you deflation proponents) and then snapped
back faster and better than most other assets and asset classes.  Is a
drop to 950 (on radar for many months in NFTRH) out of the question? 
No, nor is the long term battle line at around 870 for that matter.  Do
you think anyone who has understood what is and is not monetary value
since 2001 is pained by these numbers?  They are just numbers and they
are 150-200% above cost basis in many cases.  And by no means are these
downside targets shoe-ins in my opinion.

So whatever you do, sit tight and realize that what is happening now is
all part of the game and for some it is a time of opportunity as value
goes on sale.  It is really no more complicated than that.

Gold