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.

Still Range-Bound

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It seems the new reality of the "market" (ha!) is as follows:

(1) Prices move down based on concrete, firm, real, economic data showing things are going to hell in a handbasket;

(2) Prices move up based on politicians offering ceaseless reassurances that things are going to be juuuuuuuuuuust fine, so don't you worry your pretty little head about it, m'kay?

Call me cynical, but I'd trust data before a politician any day. We got both of the above within the span of minutes this morning. The economic reports came out showing the economy is worsening, and the equity markets – sensibly – went quickly down. Then, with eerie timing (cue spooky music!), we got the latest announcement of yet another program to Save The Euro, and both the Euro and equities went ape-shit vertical.

I don't trade the FXE very often, but I entered a short position in it after that big pop. I remain lightly committed (30%) but totally short. Someone is lying to you, and I don't think it's the data.

0915-es

Euro Positioned for Major Plummet

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Last week, I mentioned key support levels on the Euro, and once those were broken, the Euro fell hard. 

This week, thanks to the non-stop "everything is fine!" string of announcements from European leaders, the currency has sprung back strong. But take a look at this very interesting little chart I've put together:

0915-euro

So we have, in both 2009 and 2011:

(1) A steadily rising trend;

(2) A break in the trendline (red arrow);

(3) A swift fall;

(4) A recovery back to the last major support level (green arrow)

Beginning in January 2010, this is the exact sequence which presaged a huge, huge fall in the Euro. It'll be interesting, to say the least, to see if history repeats itself.