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.
One More Time – Bulls Look Ripe
NEW YORK (AP) — Stocks had their worst day of the year Friday after Greece hit a roadblock on its way to a critical bailout.
Seriously, with a headline like Stocks fall sharply as Greek deal is held up you would think that the Dow just lost 300-500 points. Nope, just a paltry 0.71%. Yes, let me repeat 0.73%.
The worst day over the past 2 ½ months has been 0.73%. Okay, so with that being said, in which direction do you suppose the market will move over the short to intermediate-term move? Would you say the risk is now to the upside? Do you think probability lies with the bulls or bears after an average years worth of market gains in just 28 trading days?
An Ongoing Balloon Ride
Weather balloons may reach stratospheric altitudes of 40 km; well-over double the standard altitude of most commercial jets. Diminishing pressures at these altitudes cause the balloon to expand to such a degree (typically by a 100:1 factor) that it disintegrates- leaving the remains to fall back to earth.
For those of you who can recall middle/primary school science class, the Earth has five principle layers in the atmosphere. The two closest to the ground are the troposphere (up to 20km) and stratosphere (20-50km). Most of the phenomena we associate with day-to-day weather occur in the troposphere, including clouds; which stop at the tropopause- the border between the troposphere and stratosphere.
Since the October breakout, and subsequent retest, the SPX has remained well-above the clouds and the 400day MAs since November.
The question is – has price broken the tropopause? Or is there more room overhead as, much like the troposphere, it is variable depending on latitude (which in this metaphor is a bull/bear market)?
Just eyeballing the SPX altitude since 2007, we have had 3 instances of a significant post-altitude drop (purple boxes) and 4 instances [or 2 long ones…] with only minor pullbacks (orange). Notice the rising Senkou parallels such a price rise, and is doing so again today:
I don’t think anyone questions if this debt-filled balloon will disintegrate, but when. Given that we’re probably approaching the stratosphere- I closed all longs today. I would be more comfortable entering long again on a small pullback, but would hesitate to short until the full cloud is breached.
“One minute you're up half a million in soybeans and the next, boom, your kids don't go to college and they've repossessed your Bentley.”
Since I'm kind of tied up for the trading day, I figured I'd write a post about Facebook's headquarters as an interesting anecdote post. After all, FB's founder lives just a few blocks from me, and the headquarters of his firm is just a short bike ride from here. What lies between here and there is kind of interesting.
Look at the map below. The blue arrow denotes where Mark lives. It's a nice house, but I imagine many of you reading this live in something nicer (here in the Silicon Valley, we try to be understated – – even 27-year old zillionaires). Crescent Park is one of the two "rich" neighborhoods in Palo Alto (the other being Old Palo Alto, not shown here). Another nice zone is Lindenwood, marked with the purple arrow (it's kind of obviously a nice part of town – in this case, Menlo Park – because the distance between the streets is much greater).
Not This Time
There is hardly anything different about the experience we're going through right now than what we went thorugh late last June - – – the tear gas, the pledges that this austerity would solve everything, the declarations that everything was fixed – – it's all exactly the same.
But there's one thing that's going to be different. I'm not getting sucked into believing it. Last summer, I spent almost all my free time at Stanford Sierra Camp – – the time I should have been hiking, exploring, and enjoying myself – – – plopped in front of a laptop and sweating out the Greek vote drama. It was a complete and total waste of time. I was stupid to worry; I was stupid to think anything would get solved with another band-aid; and I was stupid to spend my time watcing politicians instead of enjoying life.