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.

RUT Roh… Small Caps Could Play Catch Up

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'Rut Roh' would be the utterance of stock market bears if the Russell 2000 small cap index breaks the Bull Flag.  In this summer of discontent the RUT has flagged around a support zone while the S&P 500 has jaggedly sawed its way upward. 

If the markets finally gets over the obsession with Bernanke and Draghi and the QE is that is not directly forthcoming they are expected to shake off the noise and finish up the summer rally as USD continues to take a normal but significant counter trend correction.

As NFTRH has been stating since the beginning, this will be counter-trend stuff only to reset sentiment and get people on the wrong side (bearish is and has been the wrong side since May).  But it is also a good trade, with the best part potentially directly ahead.

Small caps could be a 'catch up' play along with many non US markets.  Here is the chart of the Russell 2k showing momentum non existent and yet MACD zero +, RSI at support and CCI having gone above -100.  If the broad rally is to continue, this index (IWM is the tracking ETF) could really get in gear.

http://www.biiwii.blogspot.com
http://www.biiwii.com/analysis.htm

The Repo Man Cometh? (by Bob Kudla)

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The market rose on Friday, and started when Europe opened and continued until an hour after our market opened.  The reason given was the good employment report.  That reason is obviously a deception, as we lost hundreds of thousands of jobs.  So what could it be?  

My contention is the Fed started to add to reserves into the banking system Thursday/Friday (Repos). The last time this happened (Dec 2008) the miners and metals bottomed and then two months later the market rose.

So the market reacted positively to this, gold and miners showed strength, and as these repos continue, you will see a move to hard asset stocks and commodities, a move out of bonds, and then it will pressure non commodity assets as margin pressure will crush earnings.  But first we will make new highs in equities.

The Fed has no choice but to add reserves to the system or risk sovereign and banking collapses.  Reserves have been falling for a year, and the only reason the market is flat and not down is the volatility crush and short squeezes that forces risk on.  Both are done, volatility at lows and short interest down considerably. Jawboning promises of liquidity is done, and we are at peak earnings and margins, so reserve building is the next step.  Plus they must give the banks more cash to leverage up to buy gov't debt and to support the market price and their profitability.

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Boom! (by TnRevolution)

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Good Sunday afternoon Slope.  First off, with all due respect to my good friend BDI, when I say "Boom", I am anticipating an explosive move to the downside.  As you can probably gather from that statement, my flirtation with the bullish side of the market over the past 6 weeks has come to an end.  The great Bearish Rev has returned!  Let's take a look as to why.

To start with, let's look at our old friend EWP vs SPX.  Divergences in this comparison chart have served well over the past couple years to indicate short and medium term turning points in SPX.  As you can see in the chart below, EWP is currently showing a negative divergence.  In my opinion, any further upside in the markets next week, are an opportunity to sell longs, and build short positions.

EWP8512

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Surrender to the Facts………………….(by BDI)

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2012-08-05_1241

Surrender to the Facts

Please take a moment to carefully review the mind jarring tables above. Perhaps the staggering number of casualties inflicted in what was by far the most brutal military conflict in modern history, will make you better appreciate why I may seem a bit defensive when it comes to all the white flag waving jokes about the French on SOH. 


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