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.

Volatility/Risk Revisited

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Phoenix_04 On January 6th, 2011 I posted a blog about volatility in the US equity markets (click to see that blog post).  The short version of that post was that volatility as indicated by the $VIX was cheap on a historical basis.  I suggested that readers get long volatility either through $VIX futures or the VXX ETF.  I know that the VXX is called a "widow-maker" by many and that deserves a separate conversation (I will summarize briefly at the end of this post).



Sky-High Copper

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I don't trade futures, but I thought I'd share a couple of copper charts just to drive home the notion (which apparently no one believes) that this market is overbought. There are two flavors of these charts – one of them adjusted (that is, the price is adjusted for gaps that take place during rollovers), and the other not. Here they are, in that order:




For whatever reason, copper has a very strong correlation to equity markets, and it's pretty evident that the huge run-up in prices over the past two years in awfully long in the tooth.

Salivating Over Miners

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Presently my largest long position is in the miners ETF, symbol GDX. I am typing this post over an hour before the opening bell, so by the time I post it later today, I'm not sure what GDX will be doing, but as of this writing, it's up about 1.4% pre-market.

My belief is that GDX will work its way up above $56, at which point I intend to sell the position. More importantly, I intend to go short GDX above $56, since I anticipate the movement shown with arrows based on the intraday head and shoulders pattern, with a target of about $48. I've tinted in green the area where the GDX could continue pushing higher, since I don't necessarily think it'll stop hard at that line and reverse, but we shall see.

(UPDATE: I've sold my GDX and am short it now, since we're into $56.xx territory. I want to emphasize that it still may push into the tinted zone, but time alone will tell.)