Slope of Hope Blog Posts
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I'm going to save everyone the obvious joke about Netflix
releasing a show called House of Cards as their stock price defies gravity and
continues to float on a cloud of hopes, dreams, and Carl Icahn's influence. But seriously, how sweet an irony it would be
if a show titled House of Cards marks the top of Netflix? I'd have to rank it amongst one of the
funnier things to happen on Wall
St. in quite a while. I will make my argument for shorting NFLX on
several fronts; fundamental, technical, and "seriously, its trading at
what and I can short it?!?!" common sense.
(Editor’s note – Gary Tanashian gives us the post below, which is timely given my newfound love of gold. Just to be clear, particularly for the miners, I am long precious metals as a bounce play; I am as bearish on miners as ever – – I don’t feel nearly as strongly about the metals themselves – – and have every intention of shorting the bejesus out of miners once they’ve bounced; however, some of the battered miners might spring 50% higher from current levels, so it pays to wait – Tim)
The noise of the day includes much hand-wringing about gold
manipulation, gold’s precarious technical situation, the end of gold as a
useful tool for protection against inflation and even the end of its
bull market. But maybe a simple look at the facts works better.
Central Banks’ Balance Sheets vs. Gold. Source: DoubleLine Funds
I wrote about the Commodities Sector ratio of DBC:SPX here on January 20th. DBC had been underperforming the SPX, essentially, since mid-2011 and was in a large triangle formation on the Weekly timeframe.
Since then, it has weakened further to make a lower low and has broken below triangle support, as shown below on the Weekly ratio chart of DBC:SPX. There is a slight positive divergence on the Momentum indicator, but it has not hooked up yet.
Slope isn't exactly the go-to place for long ideas most of the time, but I wanted to at least show a little balance and offer up some bullish-looking charts. More particularly, I wanted to show some that weren't so completely over-the-top in price that they might actually still be good prices (unlike, say, Campbell's Soup – CPB – which has vaulted to heights most folks would never associated with cream of mushroom soup). Anyway, here they are:
Have you ever seen a fight, where round after round a boxer seems to be landing blow after blow with no effect? But late in the fight, the boxer lands a simple body blow, and his opponent collapses. What happened? The boxer was beaten from the inside out.
The surface of things is not always as it appears. You must look inside to see the damage that is being done.
ES broke up with confidence yesterday morning. Overnight ES has made a marginal new high on strongly negative 60min RSI divergence, so some retracement soon looks likely. Strong support levels in the 1530 and 1520 areas and this would be a dip to buy: