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.

Time to BRF

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This may well be my last post until the close. I hate to keep apologizing for my lack of posts in a world where some bloggers do a single post each week, but that's just me.

Anyway, the Brazilian small-cap ETF, which I've mentioned before, looks like a great short, and it's got such a marvelous ticker – BRF. I was already short this but increased my position this morning after the run-up.

1230-brf

Treasury Bond Short

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With the exception of a couple of days ago, I typically have had good success trading Treasury-bond fund symbol TLT. In spite of getting stung badly on Tuesday, I went long TLT early on Wednesday and enjoyed a good portion of the run-up in price.

As the day neared the close, I decided to reverse my position and short TLT based on a couple of things. First, the surge upward was pushing it back up to an appropriate level for a "lower high" based on the past few weeks of trading, and two, I believe the longer-term prospects for interest rates is higher (and bonds, thus, lower).

As I'm typing this, the bond futures are down nearly half a percent and TLT is down even more. Below is the @ZB chart (which I'm using since TLT isn't open yet), and I've marked with an arrow my short entry point.

1229-shortbonds

What is particularly intriguing to me is that the bonds are down in spite of the Euro being strong. Recently, the correlation between dollar's weakness (and thus the Euro's strength) has been very tight with bonds. But look at how they're parting ways this morning:

1229-eurospread

This suggests to me that bonds are so weak that even a surging Euro isn't helping them, thus amplifying my bearish disposition toward bonds.

As a closing note, Slope is going to continue to be very quiet until January 3rd. I'm on "vacation" (inasmuch as that means for me), trading has gone from light to almost non-existence, and New Year's is upon us. Suffice it to say posts will continue to be few and far between until next Monday, so thank you for understanding.

Chart on Shanghai Composite (by Mike Paulenoff)

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After making new corrective lows in a press towards a possible 6th consecutive down day, the China Shanghai Composite reversed to close higher today.

So far today the iShares China Equity Index ETF (FXI) is up 70 cents, or 1.6%, from yesterday's close at 42.19, and even more from yesterday's intraday low (and violation of its 200 DMA) at 41.91.

The ability of both these China indices to hold today's gains is imperative to their near AND intermediate term outlooks. The SH Comp must exhibit follow-through strength that sustains back above the declining 200 DMA, now at 2780, to trigger initial confirmation that the corrective process is complete.

So far the Nov-Dec correction has held above the Sept upside breakout plateau at 2705-2690, which represents very important support. As long as 2705-2690 contains any additional weakness, my overall technical work in the SH Comp will remain positive.

EnPVUiOJe

Originally published on MPTrader.com.