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.

ACHN Pick of the Day (by TraderHR)

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Achillion Pharmaceuticals, Inc. (ACHN) jumped $1.25, or 20.80%, Wednesday after the company announced plans to sell 9 million shares of stock in a public offering, expected to net proceeds of about $52.1 million. After testing its all-time high and key resistance in the 7.50 area during the day, the stock fell back to the 7.20 area where it closed. If momentum continues in the next few days and breaks resistance at 7.60, we could see the stock reach the 8.40 to 8.80 area next. Preferred entry (buy stop) price is at 7.65, with a stop at 6.70.

Originally published on

Shorting China (by Mike Paulenoff)

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A look at the chart of the inverse China Stock Index ETF — the ProShares UltraShort FTSE/XINHUA 25 Stock Index (FXP) — suggests strongly that slowing Chinese growth and climbing inflation remain part of the problem, not part of the solution — at least, not yet.

As we noted for subscribers last night, Wednesday's sharp afternoon advance in the FXP after the morning's weakness positions the inverse China ETF to accelerate to the upside towards a test of multi-month resistance between 32.00 and 33.00. If hurdled, this will confirm the upside breakout from a major base formation that has the potential to propel the FXP to 39.00-41.00 in the weeks ahead.

Let's notice that the price structure has carved out a significant "W" pattern, which represents accumulation of the FXP — or price distribution within the iShares FTSE China 25 Index Fund (FXI). In either case, the pattern forewarns us to expect potentially serious negativity and equity liquidation in the China equity markets in the weeks immediately ahead.

While I have no idea what the fundamental story will be, I strongly suspect the global stock markets are entering a period of vulnerability to the China headline risk.

Unless the FXP reverses sharply and breaks below 28.30, today's upside breakout represents the initiation of the thrust towards 32.00-33.00.

Originally published on

About That Last Hour

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Well, today didn't turn out exactly as planned, eh? And for anyone out there who claims they saw the whole "Greece pop" coming…..errr, I don't think so. It was about as foreseeable as the silver crash back in early May. Sometimes something wild happens. If you were long and made money, congratulations. But let's recognize an element of chance was at play here.

For myself, a fairly fat profit turned into a small loss. Thank God for stop prices, because I was removed from a number of positions before the big pop. And – just to be clear that my bearishness wasn't all bluster – I want to note that I doubled the quantity of my short positions after the pop. There was one ETF, symbol SMH, that looked like a decent hedge, so I am long a large quantity of that (it is the ETF for semiconductors).

Let's take a quick look at the pop; here's what the Euro did:


Here's how the ES responded (note how it was starting to soften for the day before the news):


And – the most interesting chart for me – here's a daily candlestick of the miners:


Check out that red line I've drawn. That is the battleline, my friends. For the past three days, the GDX has had a huge range, and that line at about $54 has been the shoving delineator.

Of course, this whole Greece obsession has become a bit of a farce. One day there's a deal; the next, there isn't. To my way of thinking, I used the pop as an opportunity to get better prices.

But I have one closing thought, and that is in praise of the slow, plodding way I am forced to trade because of the large quantity of positions I'm in. If I were trading just, say, the SPY, I'd probably get chopped to pieces. Days like today can make mincemeat out of a person.

The way I trade, I am in a large quantity of individual positions, and I cannot flip from bull to bear (or vice versa) on a whim. Instead, the cumbersome nature of my portfolio's makeup – – its unwieldiness – – is actually a blessing. Each stock stands on its own merit, and each stock has its own customized stop. It helps remove some of the emotions and arbitrariness out of my own trading.

Of course, these individual positions are subject to the broad direction of the market. My point is that the nature of my portfolio helps foreclose me from being rash (which, as a human, I am prone to being from time to time). An explosive move like this afternoon's, which was a bolt from the blue, can trigger panic and unwise choices. I am happy that my positions simply have their stops in place and have to live and die on their own merits.

That'll be it from me today. I hope you guys survived – – and some of you, I imagine, had a surprisingly strong finish! – – and I'll be putting up posts from others over the course of the evening.