Slope of Hope Blog Posts
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This segment is excerpted from this week’s Notes From the Rabbit Hole, NFTRH 329, and was originally titled…
Does the US Economy and Stock Market Need Manufacturing?
The ISM PMI reports for December and January showed deceleration in line with our view that a persistently strong US dollar would begin to eat away at US manufacturing, exporters and other companies that depend on significant foreign business. But in an age where investors will bid up Twitter* (with its forward P/E of 141 and 30B market cap to 1.2B revenue) by 16% in a day, are we returning to the old days of ‘PE’s don’t matter’ with the hook or tout being ‘it’s all about ad revenue’?
This weekend, I was thumbing through my highlighted copy of David Stockman’s The Great Deformation (about which I wrote a lengthy and over-the-top laudatory review last September here) when this passage caught my eye:
Here’s today’s swing-trading watch-list:
Long Qihoo 360 Technology (QIHU)
The first thing to say today is that though Friday had much to please the bears, the weekly candle did some serious technical damage to the bear case for the next couple of weeks at least. That’s because the candle reversed the break below the weekly middle band of the week before, and while it’s possible that might be reversed again this week, that would be rare, and the odds strongly favor a flat to up week this week and a move significantly higher than Friday’s high by the end of next week. While I’m looking for some downside early this week, that may be very short-lived. SPX weekly chart: