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.
Supply and DMAN
Just to even things out a bit, here's a long idea (which I own). DemandTec:
Gold Uptrend Broken
I fasten on my suit of armor as I dare speak anything against Everyone's Favorite Long – gold.
This is particularly timely, considering the good-natured tongue-lashing Gary Savage gave me in the comments section last night (which 13 of you up-voted……..I think that's a record). My biggest loser today? My long position in GLD! My biggest winner? My short position in GDX! (I would note I dumped gold even before the opening bell, but I still deeply resent the yellow metal).
Anyway, the intermediate-term uptrend is broken, and I remain short GDX. As for crowded trades, I think the bulls in early 2000 NASDAQ had nothing on the gold bugs these days. $5,000/ounce is a foregone conclusion, yes?
Down Move Not Finished Yet (by Springheel Jack)
After yesterday's recovery and gap fill there was more more weakness on ES and EURUSD overnight. It seems likely that there is more downside coming because EURUSD is still well short of the channel target in the 1.36 area. I had drawn a trendline for a likely interim bounce from EURUSD overnight and so far it has bounced 55 pips from the hit there so I'm expecting EURUSD to bounce a bit more before the decline resumes. I'd normally expect to see a small declining channel on a move like this and if so, the short term target will be in the 1.39 area if hit today:
On the basis that the current EURUSD move doesn't look finished, I'm also expecting to see further weakness in ES this week, though with EURUSD bouncing in the very short term, it's possible we may not see much more downside today. On the ES 5min chart I'm looking for a bounce that could reach the 1182-4 area in the short term and then another move down, possibly towards 1167, to complete the head on a possible head and shoulders pattern:
That 1167 target isn't quite as speculative as it might seem from the ES chart. A natural support level for a retracement is the SPX daily 20 SMA and that was at 1167 SPX at the close yesterday and is rising of course so it will be a little higher today and more so tomorrow so if we hit it tomorrow the ES and SPX targets will be close to each other. On the SPX 60min chart I'm seeing support for the current (green) rising channel in the 1175 SPX area and that is the minimum target that I'm expecting to see hit:
One thing that we've not been seeing on any weakness in recent days is a flight to treasuries. Just the opposite and it is very clear now that we're seeing a significant correction on long treasuries:
Why have treasuries not been boosted by any weakness in ES? Well bonds tend to trend down as equities trend up and equities really have been trending up for a couple of months now. I've been saying for months that any substantial QE2 push would be likely to send bonds trending sideways to down while equities trend up and the direct effect of QE2 on bonds, if any, will be only to cushion any fall.
There's also the fact that the technical position for equities looks so strong here that people are viewing any dip as a buying opportunity rather than a cause for alarm. Even the bears are mostly just looking for a dip towards 1130 SPX here, and there's every reason to think that might happen, with USD having bounced off strong support and commodities looking ripe for a correction. I was looking at the CRB chart yesterday and it is looking very toppy. It has also tracked EURUSD closely over the last few months so a correction in EURUSD should deliver the same in commodities:
Coping
What's a Tim to do?
What does a bearish swing trader do in an environment that feels about as hostile to him as a panel of Harvard Law School constitution professors would be against Christine O'Donnell? How does one cope when the environment is utterly different than one's style?
The pat answer, of course, is "adapt", and I'm certainly doing that as best I can. But let me be clear about this mutation.
What I Am Doing
+ Paying far more attention to the Euro than I ever have in my life;
+ Balancing my shorts with long positions (I have about 25% of my portfolio in longs);
+ Staying relatively "light" and away from margin (I'm about 75% committed right now);
+ Keeping my stops fresh;
+ Making good use of GLD and GDX as day-trading or overnight trade tools (funny enough, I'm short GDX and long GLD at the moment);
+ Keeping my ears tuned to the Slope comment section for ideas, insight, and information
What I Am Not Doing
+ Buying momentum stocks simply because they are going higher (PCLN, AAPL, BIDU, CMG, and so forth); it's tempting to want to buy, for instance, PCLN, since it seems to go up very day, but no, I refuse. I'm not going to get sucked into a March 2000 environment. No, thank you.
What I Have Ceased Doing
+ Paying attention to mass media Elliott Wave predictions. Absolutely worthless.
I am in "get through this" mode, and I will remain so until the coast is clear. This has not been an easy time for me – far from me – but I'm still very much in the battle, and I am managing my risk and – – on the whole! – – my emotions so they do not get the better of me.
I'd be interested in hearing how everyone else is doing, both good and bad.
