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.

The January Effect (by phantomcapital)

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The January Effect, like its equally annoying cousin, the
Santa Claus Effect, is another delightful phrase to remind us all to continue
buying every equity that isn't nailed down. 
So let's look at this current January to see how things are
progressing.  First, buyers are supposed
to take advantage of lower December prices. 
Check.  Second, small cap stocks
are supposed to outperform in this environment. 
Check.  Third, the effect is
supposed to be strongest in the third year of a President's term (2011).  Check. 
I'd like to examine the last two Januaries to try and give some guidance
as to how this winter season will play out. 
As usual, I'll be presenting charts with numbers, and as always, the
numbers are just markers for my points, not waves.

2011

The third year of the President's term gave us a January
Effect that was already well underway. 
1.  The November high just
slightly exceeded the high for the year. 
2.  Consolidation to give bears
hope for an end of the year selloff. 
3.  Break to new highs.  4.  An uninterrupted,
three month grind straight higher that absolutely blew the doors off the prior
high. 

SPX January 2011


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Lame Burritos Meet their Maker

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I consider myself a relatively "pure" chartist, not allowing fundamentals or folklore to influence my decisions. But with Chipotle, it was more than just the chart that compelled me to short it (as well as buy puts, which is an act I take upon myself literally once or twice a year, versus the thousands of equity trades I do).

As I have often cited here on Slope, I think Chipotle food sucks out loud. The offerings are completely middle-of-the-road, and the pledge on their menu that some (some!) of their ingredients are probably organic doesn't impress me. Nor does the fact that they charge 50% more for the same food that I can get at any given Redwood City joint (all hail Los Gallos!) Setting aside the fact that mom 'n' pop burrito joints have much tastier offerings.

Anyway, before the open, I was delighted to see their stock down about 10% pre-market, so I dumped the put and covered the stock right at the open. I think much, much lower prices are ahead, but I'm going to wait for a decent re-entry point before I refry these beans once more.

0116-CMG

Upside Opening Up (by Springheel Jack)

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I posted a chart of the daily SPX early last week with the observation that of the last twenty times that SPX closed more than ten points below the daily upper bollinger band, support at the middle bollinger band was hit sixteen times before the upper band was hit again. To that extent the odds are still with the bears for the moment. Middle bollinger band support is now at 1447 and still rising, and it therefore isn't far now to reach it either. While we watch this sideways action however, the potential upside within the SPX rising channel and below the upper bollinger band is opening up, and resistance on those is now in the middle to high 1480s. That needs to be borne in mind from a risk/reward perspective:

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CCI-Gold Ratio Will Tell the Story

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The story referenced in the title being whether or not global policy
makers can cook up an inflationary up phase in the global economy.  I
had used the term ‘i2k12′ early last year referring to the prospects for
what might ultimately be an inflationary 2012.  Well, they came with
the QE at year-end and now the theme shifts forward to the prospects for
i2k13.

A subscriber forwarded to me an audio of Don Coxe talking
about the changes coming out of Global Policy Central in “Basel
Greenlights Banks Big Time” and it turned out to be a good starter for a
post in which I would like to try to delineate some things.

You may have heard me belly ache in the past about the raving
inflation bulls who lump gold and gold stocks in with the entire
inflation trade?  Gold is copper is oil is hogs?

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