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.

China’s Shanghai Index at Variance with CB Leading Index

By -

Data released Monday night shows that China's CB
Leading Index spiked up to its highest reading in two years, as shown
on the graph below. "This index is designed to predict the direction of the
economy." It's a "combined reading of six economic indicators related to total
loans issued, raw material supplies index, new orders, consumer expectations,
export orders, and housing."

As I outlined in my post of September 20th, the Shanghai Index
tells a different story as it trades at three-year lows and threatens to fall
off a cliff, but China's Financials Sector has been trading in
an opposite direction.

The question is, "Do we believe that the data is
actually reflective of China's economy, or is its Index?"

The
Shanghai Index has trended in diametric opposition to the
S&P 500 Index over the past three years. Which one
accurately reflects its country's economy, if either?

No wonder people
are confused and are in the dark as to the real fundamentals of both the economy
and the companies listed in the stock exchanges (and their actual values)!
Hence, they are reluctant to commit any excess cash to the markets, particularly, it
would seem, in China.

Day of Reckoning

By -

Good morning, beloved Slopers.

I remain short the market (surprise!) with a eye-watering 71 positions, none of them large. These constitute a 58.21% commitment, with the rest of my portfolio in cash. If we can chip away some market strength today, I'm happy to goose things up to about two-thirds committed with maybe a large ETF or two.

I was just glancing at the VIX, and it struck me how the Fed's suppression of market realities might have its days numbered. Checking SocialTrade last night, I noticed this really cool chart illustrating that the amount of the Fed's market fakery is measurable – – 220 S&P points (or over 2,000 points on the Dow).

It's impossible to tell when the turn will take place, but if the past few years are any guide, an explosive move higher in the VIX (indicating a plunge in equity prices simultaneously) doesn't seem far off.

0925-vix

Oh, one final note - When I read that the police force of Camden, NJ was being disbanded, I was reminded of this review of Days of Destruction, Days of Revolt  I wrote this summer. Things are unraveling faster than I anticipated.

Resistance Tests (by Springheel Jack)

By -

I was explaining yesterday morning that the setups and statistics for this week meant that the ball was with the bears at the start of this week, and it's starting to look as though they immediately dropped it. This might just be another pre-retracement bounce but the odds have definitely been shifting in the bulls' favor into this morning:

I was saying yesterday morning on twitter that if we were to see a bounce on TRAN then the obvious target would be at declining resistance from the high, which would be the resistance trendline on a 55% bullish broadening descending wedge. If we see that hit today, and at the moment that looks more likely than not, then we would probably see some resistance there regardless, but the larger move would be either to break up or to reverse back down into wedge support. A break over followed by a strong reversal down would look like a bearish overthrow that might well then precede a larger break downwards. This is an important chart to watch today:

(more…)