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.

US Bond Short – Fo Shizzle

By -

I've been mentioning with increasing frequency that TLT – the ETF for U.S. bonds – is a good short. It's my second-largest short position, and as of this writing it's down nearly 1% on the day. I think Ben's cute little scheme of propping up all his Wall Street buddies with trillions of dollars of POMO/QE2 is going to eventually badly damage the United States, and I think the value of U.S. debt instruments is going to circle down the toilet. I believe betting against T-bonds is a good play.

0930-tlt

Stalled under 1150 SPX (by Springheel Jack)

By -

SPX has just been drifting sideways this week really. I've been looking for anything in the way of short term patterns but haven't found much. We do have a fairly solid looking declining resistance trendline though and that is worth noting. Here it is on the ES 60min chart:

100930_ES_60min_Trendlines

I'm beginning to think that we may see the next significant interim top here rather than in the 1170 – 1180 area. I've a couple of reasons to think so. The first is that we have been stalled here a while, and now that 1130 SPX has broken, this is the last really significant resistance level on SPX below 1200 SPX. Looking at the SPX weekly chart we're also at a significant level on the weekly RSI.

During the October 2007 to March 2009 bear market, RSI on the weekly chart never rose above 55. When it did rise above it in June 2009, to about 58, it was a signal that the bear market was over, and it was also the level of a significant interim top. We may be seeing a similar signal now, on both counts, though the move down over the summer didn't quite make the 20% decline necessary to qualify as a cyclical bear market.

100930 SPX Weekly RSI

The second reason I'm wondering about a significant interim top here is that while SPX has been stalled below 1150, USD has kept falling, and emerging markets have kept rising. I've been watching a rising wedge on the EEM 60min chart and we are now almost at the next likely reversal level. This is a key chart for overall market direction and you'll note that EEM bottomed in May rather than July, leading the SPX and indicating that the SPX summer decline wasn't likely to last. Also worth noting on this chart is that EEM has now exceeded the April high:

100930 EEM 60min Rising Wedge

Vix bottomed a while ago and I have a sloppy rising channel on the 30min chart:

100930 Vix 30min Rising Channel

Looking at oil, I'm seeing a likely rising channel with the lower trendline of the previous rising channel as the upper trendline of the new channel. If so then the next upside target is in the 79.6 area, though as I write oil is stalling at the previous September high at 78:

100930_Oil_Daily_Rising_Channel

Today is the last day of September and of the third quarter. The Stock Trader's Almanac says that this is generally a day of institutional portfolio window dressing and heavy selling, with the Dow down 8 of the last 12 years. There was a 4.7% rally on 30th September in 2008 though, so this isn't necessarily a down day of course.

Greg Giraldo, R.I.P.

By -

I love to laugh. My affection for good comedians runs very deep. Some of my favorites include George Carlin (patron saint of Slope), Richard Pryor, Patton Oswalt, David Cross, and Emo Phillips. As with most things in life, 90% of everything is crap, and it's the same with comics. For every George Carlin, there's going to be nine comedians I can't stand, like Jeff Foxworthy or Larry the Cable Guy.

I also love it when people follow their dreams. Greg Giraldo was given a full scholarship to Harvard Law School. He graduated and was hired by the huge firm Skadden, Arps. He worked for a year and decided he hated being a lawyer. He wanted to be a comedian. So – – corny as it sounds – – he followed his bliss.

Today Greg died of a drug overdose. When I heard the news, I immediately remembered on a recent roast that Lisa Lampanelli (who was at a roast, as she often was, with Giraldo) kept citing the fact that Larry the Cable Guy made $250,000 per show. She said it three times and then said, "I just wanted to see how many times I had to say it before Greg Giraldo killed himself."

I'm afraid that now we have the answer. It's sad.

You’ll Never Take Me Alive, Copper!

By -

I've often heard it said how one commodity – copper – mirrors the equity market very closely. I took a look at this tonight, and since 2002, this has indeed been the case. Here is some recent history comparing copper, shown in black (on an adjusted continuous contract basis) with SPY, shown in blue.

0929-COPPERcompare

One interesting thing I circled in the picture above is that copper called the market's bottom nearly three months in advance, by bottoming out on Christmas 2008. Equities made their final bottom on March 9 of the next near.

It's interesting to note the Fibonacci retracement levels of copper as well. I've circled the four major instances where copper seemed to head south after hitting the Fib level at about 3.75. Food for thought.

0929-coppertop