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.

Mid-Day Thoughts

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Just a few thoughts, now that I've gone through all contents of my Bear Pen watch list.

+ I am very lightly committed – 20% in positions, all of them short, and 80% in cash. I am concerned there might not be a heck of a lot of blood left to squeeze out of the current drop, and, let's face it, nobody knows what kind of insanity might happen over the weekend (either good or bad).

+ I do, in fact, see dozens of fantastic, tantalizing, gorgeous bounce plays, but the thing is that these very oversold stocks could simply get more oversold. Still, I might enter some of them to balance things out, because if the market gets any strength, these could go up 10%, 20%, or more in just a couple of days.

+ There are some stocks, such as Devry (symbol DV, shown below) that could either go up a lot or down a lot. How's that for a Captain Obvious analysis? What I mean is that, if they break, they could go into full-blown crash mode, whereas if they simply want to recover from the low end of a range, they could rally for weeks. So I'm feeling somewhat stuck right now, since there are dozens of stocks that look just like this.

0923-stupidZHchick

Fidelity Confirms, The Fed Is Done (by Goatmug)

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MAINSTREAM GIANT GETS PESSIMISTIC

Here is an article from the Telegraph this morning that highlights comments from mainstream investment giant Fidelity who just be came my new favorite fund company because they actually have someone on staff that will speak the truth to the public.  I can only imagine what is really being said at all of these investment shops, but I'm sure they are now smart enough not to state their true feelings about market environments, stocks, and other things in email like our old friend Henry Blodgett.

Telegraph Article by Dominic Rossi of Fidelity (CIO of European Equities at Fidelity) -

"Markets have reacted badly to the Fed's policy statement and European sovereign debt issues continue to rumble on.

At times like these, it can be difficult for investors to know what to do.

We should expect news over the next few weeks to deteriorate further. As we go into the earnings season shortly, there will be more missed forecasts and guidance from companies will be uncertain and gloomy. For investors, valuations will come in to play at some stage. Yields will be well covered because balance sheets are strong.

It is clear now that the Fed cannot bail equity markets out any more and any interest rate cuts by the ECB may not have much of an impact on markets. The solution on the fiscal front will be either Greek default or Germany accepting that it has to fund debt restructuring and so reduce the quantity of debt in Greece. This will be a prototype for other European countries.

At times like these, investors should remember the strong get stronger. We will see M&A pick up in Europe. There is little capital around and so the threat for companies from new competition is disappearing.

Markets will have to consolidate so that oligopolies or duopolies are created and the remaining companies have strong cash flow and don’t have to rely on the debt markets. This is a carbon copy of what happened in emerging markets 15 years ago. Equity will shrink as well-financed companies grow by acquiring others and buy back their own equity. In time, this will stabilise equities. "

No argument here.  We seem to have a little stabilization today with a few rumors that the G20 would ensure stability and that everything would be just fine.  Hopefully we get some more confidence here and we move up to my targets that I outlined yesterday in CLOSED FOREVER. 

Let's go back to my chart on GLD.  If you desire to look back at the August 31st post where I suggested that $162.50 on GLD would be the target for a retest. http://goatmug.blogspot.com/2011/08/charts-to-watch.html.  I've updated that same chart with the recent day's action and you'll see that we are right there.  Personally, I am willing to take a shot here and go long, but those with bearish leanings might press their bets and hold out for a possible $153 to either cover or begin buying. 

I've been an advocate of physical gold for some time and one of my SOH mentors, Market Sniper, has conditioned me to know that drops in gold are opportunities for purchases as the final result of this fiat scheme will highly benefit the shiny stuff.  I've called my gold guy and he sounds very depressed and I am adding a few ounces today.  Those physical positions get bought and never see the light of day, so as much as I trade around GLD and SLV know that I really have two different perspectives regarding timing and purchases, plus selling physical gold and silver is a total hassle so it tends to stay in the portfolio forever.

 

(Wow!  That TA stuff works!)

 As of 9:45 CST gold is getting smacked around and SLV is getting smashed.  I am buying GLD here with a short term target of $170.  My stop will be $160.

Be Careful cause the weekend will be full of emergency meetings for the financial heavy hitters as they attempt to save the world (again.).

GOATMUG

Goatmug is an investor that cares about you and your family. Goatmug's Blog – Financial Perspectives From The Mountain Top is a collection of thoughts on our economy and how it impacts the lives of investors and average people. While several specific investments are named in many of his posts, these articles are simply invitations for you to do your own research and reference to these securities does not constitute financial advice. Your situation is complex and unique and you should seek professional assistance with your trading and investing. Please visit Goatmug and share your comments at http://www.goatmug.blogspot.com/

United We Fall (by Springheel Jack)

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I'm a member of Pug's excellent subscription site and find his counts a very useful reference to use with my take on the markets, with my take almost entirely derived from trendlines and patterns so the comparison is a very useful cross-check.

Pug tends to lean slightly bullish while I tend to lean slightly bearish but Pug eliminated his last alternative bullish count last night, and we stand united in the strong expectation that we are going to see more downside.

Pug's main count for a while now has leaned more bearish than my expectation, as I'm seeing likely support in the 1000-1020 area, and Pug's looking at the same area as his highside expectation, but thinking we might go somewhat lower. Both of us are assuming that the world financial system won't collapse, which seems a decent assumption for another year or two at least at the moment. If you include Tim Knight, targeting the 1040-50 area, you have an odd reversal of the usual arrangement, with Tim being the most bullish, Pug being the most bearish, and myself, as before, between the two. Whoever is right we should see a number of decent signals as we approach the low, with likely positive divergence from Dr Copper and EEM when we reach it, and we'll all be watching for those signals.

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Eye on AVL (by Mike Paulenoff)

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For those of us who think that the rare-earth space is actually worth something, then we have to take another peak at Avalon Rare Metals (AVL), which is at or very near to its intermediate-term corrective swing target zone of 2.77 off of its April high at 10.11.

Today's low is 2.81, from where AVL has since bounced a bit to 2.90-.95. This is not to say that AVL must hold at or above 2.77, because one look my enclosed channel work suggests that if the overall market continues to head due south, AVL potentially could press into the area of its lower channel support lines between 2.45 and 2.15.

From there, though, I would be expecting a significant technical reversal signal to emerge, assuming AVL remains a viable, real company. With these levels in mind, let's once again keep AVL on our radar screens.

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Originally published on MPTrader.com.