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.

Favorable Near-Term Set-Up for China ETF (Paulenoff)

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This morning's announcement by the Bank of China to allow U.S. trading firms and individuals to open accounts (in its NY branch) to buy and sell yuan might have signaled a significant move by Chinese authorities to let the currency both freely trade and to allow market forces to push its value higher — to avert criticism prior to the China Premier's visit to Washington next week.

A higher yuan has self-serving interests as well, with China battling inflationary concerns, all of which likely has contributed to today's up-gap strength that has propelled the iShares FTSE China 25 Index Fund (FXI) towards a test of its prior rally peak at 45.18 (from Dec 2).

Can the China market decline into a state visit? Possible, but unlikely, don't you think… especially in the highly interventionist world in which we find ourselves. That aside, the near-term technical set-up remains very favorable for higher prices that hurdle 45.18 on the way to 47.00-48.00.

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Originally published on MPTrader.com.

Rumblings of a Correction (by David Kern)

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I've been quiet on my blog for a good week or so now, just watching the markets. I don't feel the need to post every day if the action doesn't warrant extended commentary. To be quite honest, I've been preparing to write a big "Repent Bulls, for the end is nigh" post… but it's not time for that yet. Not to say that we're not getting closer. There's been a couple fast moving signals that have caught my attention – most notably the McClellan oscillators for a number of the sectors and indexes have shown sell signals. I put a lot of confidence in sector and market breadth indicators, which the McClellan oscillator certainly is. The thing is, Mr. McClellan can say "SELL" when the result is just that the market goes sideways for a while and then explodes up again. I think you have to balance that out against the direction of the overall market's bullish percents – "see the forest for the trees."


Currently, the overall market bullish percents are continuing upward. More and more stocks are being overcome by buying pressure outvoting sellers. That's a situation that can actually last for an extended period of time, and can be a frustrating one to fight. Doubly frustrating if you're trying to call a top. Reference this next chart, showing the relative S&P 500 bullish percentage compared to the underlying index's performance. As you can see, the bullish percent remained "on offense" (that is, above about 30% and increasing – or anything above about 70%) for about a year with only one defensive period at the beginning of 2010. That whole time, the S&P 500 moved up strongly.

Don't you think you would have liked to stay invested the whole time that bullish percent was "on offense"? Me too.

So, for the time being I remain fully invested. I'm watching closely to see whether more breadth indicators will tumble, and especially how the bullish percents will fare.

My investment portfolio has rotated a bit, so if you haven't checked on my pick's performance lately give it a look.

David Kern (@AbjectAvarice on Twitter)

Moly Crunch (by BKudla)

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In five business days, the insiders for MolyCorp are allowed to sell their shares to the public, and having a company with no near term earnings prospects, a pricing model controlled by your competitors, selling for over 6 times book value, and a stock that is 300% of the IPO price, if you were an insider hedge fund, or executive, would you sell?

Now that the fever has broken on this stock, I am expecting at least a move back to the bottom of the channel.  I am short via Feb 55 puts, and I am also short REE Feb 16 puts.  I acquired and completed my purchases last week.  Why REE?  Well when folks start bailing out of MolyCorp, they are going to bail out of the ETF for Rare Earths, and REE will fall in simpatico.

Enjoy, and join me on the wild side  🙂

Moly_2011-01-11_1928 

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