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.

Long IFSIA, Short USG

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Below is a market neutral trade I opened Tuesday morning, but first I wanted to thank those of you who have downloaded and rated the Portfolio Armor iOS app. When I checked at the end of last week, I saw the screen cap below, which showed that, among the top 200 paid finance iOS apps, Portfolio Armor had the highest customer rating. Thanks again for that.

Also, quick follow up on my last post ("Speculative Options Buy Update"): In that post, I mentioned that COHR would be releasing its Q after the close Tuesday. It reported EPS and revenues that beat estimates( EPS of $0.83 vs. estimate of $0.78; revenues of $200.9M vs. estimate of $192.68M), so we got a little lucky there. The underlying is up about 3% afterhours as I type this, reversing today's decline, but we'll see how this pans out going forward. On to Tuesday's market neutral pair. 

On Tuesday morning, I shorted USG at $15.09 and bought an equivalent dollar amount of IFSIA at $18.55. I e-mailed the trade idea to those on the market neutral trade notification list before market hours Tuesday.

USG Corporation (NYSE: USG) manufactures Sheetrock and other times of wallboard. I shorted this one last year, and got stopped out for a single-digit loss. I plan on using a double-digit trailing stop this time, on both the long and short side of this trade. I’ll probably use slightly tighter stops initially this time than I did initially on the last market neutral trade (long IMO, short TRGL) though. Charts below courtesy of

Short Screen shows an Altman Z-Score of 0.59 for USG. Scores below 1.81 are considered an indication of financial distress, according to the model.

USG is currently rated as having Average Accounting & Governance Risk (AGR®), receiving an AGR Score of 70 percentile among the approximately 8,000 companies in North America rated by Audit Integrity, indicating higher accounting and governance risk than 30% of the other companies.

USG had negative earnings over the trailing twelve months and has an PEG ratio of -0.19 (based on analysts’ estimates of its earnings over the next five years).

Interface, Inc. (NASDAQ: IFSIA) manufactures modular and broadloom carpets, and other floor covering products.

IFSIA has an Altman Z-Score of 3.37. Scores above 3 are considered indications of financial strength.

IFSIA is currently rated as having Conservative Accounting & Governance Risk (AGR®), receiving an AGR Score of 98 percentile among the approximately 8,000 companies in North America rated by Audit Integrity, indicating higher accounting and governance risk than 2% of the other companies.

IFSIA looks pricey based on trailing earnings, but it has a PEG ratio of 1.44 (based on analysts’ estimates of its earnings over the next five years), which looks a little more reasonable.

Goldman Sachs (GS) … (by Leaf_West)

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I was hawking GS near the end of the day yesterday and had a plan in place based on how it opened this morning … I tweeted about opening a position at $151.30 and the plan to take a scalp profit at the next GANN target at $152.70.

GS_May3, 2011_Daily

GS_May3, 2011_30min

I like the GS potential up to that resistance line around $154.80 and then we will have to see what everything looks like.

Cheers … Leaf_West

SPY Update/Outlook (by Leaf_West)

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Sitting here pre-market on Tuesday I thought I should update my market outlook.  The following chart lays out my current reading of the market/SPY … I do think we are going to pull-back/consolidate here for 2-3 days. Traders have to remember that pull-backs from Ascending Triangle Patterns in bull markets happen 57% of the time and take between 9 and 11 days to complete (from Bulkowski's studies). Also note that Ascending Triangles hit their pattern targets 75% of the time.

I think that $135 round number will be a nice pull-back target and $140 a nice upside target. Looking at time fibonacci targets, the low and pattern break-outs fit nicely so I am looking at the 1.382 mark as the upside target date … that would take us out to Friday May 20th as a possible topping date.

SPY_May3, 2011_Daily
Cheers … Leaf_West

MOS Breaking Down (by Goatmug)

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Mosaic is making a run for the bottom a very long term channel bottom (3YR Weekly Chart at the bottom).  This presents several options for those that are more focused as traders. 

15 MIN – 20 Day Chart on MOS – NASTY

As I started watching this play out over the last couple of days, the 15 minute chart was a pretty good guide for me.  The breakdown over the last hour has been significant.



Where one sees blood, other see a purchasing opportunity, and it is always a good idea to look for the trade that would be on the opposite side of yours.  Obviously one that has a bias toward going long can attempt to go long near the $71.55 area, setting a stop just below that around $69.00 at most.  This provides an opportunity to catch a bounce with little risk.  Personally, with all commodities looking pretty weak and entering into May (historically one of the crummiest months for stocks), I am not in this camp at all.


The good trade has been to be short MOS, and I have enjoyed that position for several days.  As we near this significant area of support, I am on high alert because I do not want to give up my gains.  As I examine this trade I have now entered in stops at $73.50 to prevent me from giving up a large portion of these great profits.  On the flipside, if the $71.55 area breaks down I am looking for a potential move to $65.00

Long term 3 Yr Weekly Channel is Close to Breaking. –

Daily View – 200 Day

As always, be careful.  I'm not sure if MOS has suffered weakness as it has become known that Bin Laden is dead, therefore resulting in one less major buyer on the world market for fertilizer.