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.

The Last Chunk is the Biggest

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Well, for a holiday weekend, Slope has been pretty busy!

I've got about 100 shorts on, and – unfortunately – about 161 potential shorts just sitting in a watch list. Having 250 shorts would be a better feeling right now, but my time machine is still not complete.

As I'm typing this, the equity, crude oil, and Euro markets are all getting mauled, and the gold and bond markets are pushing to never-seen-in-human-history highs. Silver, strangely, is left out in the cold.

Late in July, I was thrilled to see the profits on my shorts climbing, and I happily took those profits. Unfortunately, the stocks just kept falling, and it became clear to me that, for shorts, the biggest profits are actually in the very last stages of the plunge.

In other words – – and I'm just making up these numbers for illustrative purposes – – if a stock peaked on day "1" and bottomed on day "10", then you might see 30% of your profit by day "7" and then the remaining 70% of the profit on those final three days when everyone completely freaks out. My problem has been covering on day 7, patting myself firmly on the back for getting a profit, and then watching the real juice happen in the final stages.

You can see the problem with this, however. You never know when the bottom is in, and oftentimes – especially these days – you get these V-bottoms which permit almost no time to scramble out of a position (particularly if there is some bullish news in the middle of the night).

My intention this time, however, is to try to be more patient with these shorts. Unless something huge happens between now and Tuesday's open, I am expecting to see very handsome profits within seconds of the opening bell. But those may only be 30% of the potential profits of these positions.

Sorry for the rambling, but I've been thinking a lot about this lately, and I wanted to share the thoughts about the value of the "final plunge."

Slope of Hope – LIVE!

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Since only the die-hards are going to be here on Labor Day, I've got a question for you folks.

If Slope of Hope was a daily, 30-minute webcast (that is, a video show; kinda like TV) during each market day, what would you want to see on it?

And, seriously, I'm after valuable input, not silly antics – – so leave the suggestion of me discussing market direction completely nude out of the discussion (not that, errrr, it would be suggested anyway). I'd be interested in knowing what regular features or information would be appealing to you.

Thanks for any input! And if you don't have a suggestion, please up-vote any suggestions that you like so I can sort of see what the best and most popular ideas are; thanks again!

0905-tv

Labor Flavor Saver

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Well, I've been watching the ES chip, chip, chip away all through Sunday evening and Monday morning, and it is a good, happy thing. It is 6:55 in the morning in Palo Alto as I am typing this, and a few minutes ago, I took a screen shot showing that the ES was at its last support level before breaking beneath an important trendline.

Well, I took a fresh look at it, and the ES had dropped another 6 points, and that trendline I mentioned was shattered. So the focus is no longer on support but instead on how far this thing could drop.

Let's take a look at what happened last time important support was violated.

0905-es

I think the likelihood of the ES making its way to my target of 1050 this month just went much higher. The most likely market to lead the way there is our new friend the Euro. Again, by the time you are reading this, these charts could be incredibly stale, but here's what I'm looking at now:

0905-EURO

This is a huge, huge month for news. Shalom's big announcement on September 21st might be what pivots the market to its last hurrah before the ferocious bear market I've been dreaming about kicks in. The monster event closest to us is the German high court's decision on Wednesday which could drop a nuclear bomb on the Euro. Then both Shalom and the POTUS are yacking it up on Thursday with their usual crap that won't make any difference to anyone.

Look, the market is doomed. The bulls are going to be completely mauled, and this market isn't going to bottom until February 5, 2013. We have to deal with the crap that the politicians are going to hurl our way in order to "save" the market, so my main goal is to not get badly hurt during those instances when the Washington wackos try to muck the natural cycle up (which they did in a horrendous way from September 2010 until July 2011). This bear market is natural and necessary. The politicians trying to get in its way are heretics against the forces of what is right and proper.

You can't stop what's coming.

The tricky thing is that profit opportunities are swift and usually hard to predict. I consider myself well-positioned right now, with about 100 shorts and 0 longs, although I wish my commitment level was 200% instead of 70% (naturally), but risk management is an important part of the equation as well. Who knows – by Tuesday morning the ES might be in the green, although I think it's about as likely as Oprah trimming down to an attractive waist size and keeping it there indefinitely.

As I type my last paragraph, the Euro seems to be steadfastly refusing to crack 1.4053, which is the oh-my-God level on my chart. There are a lot of fun posts from this weekend, so I'm sorry to jump in like this and stomp on them, but I wanted to share my thoughts on the latest drop. I personally think Tuesday is going to be terrific for the bears, but my don't-get-too-greedy level is 1050 on the ES.