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.
I’ve been trading the stock market for nearly thirty years, virtually non-stop. Today (that is, Monday, August 24) easily ranks in the top five strangest, craziest days in the thousands upon thousands of trading days I’ve ever witnessed. I felt like I was entering a cage of gorillas that had just ingested a large quantity of PCP. It felt dangerous and really, really unpredictable.
As I mentioned on my lengthy Saturday post:
I expect (and, again, hope – – because, God forgive me, I’m actually long five ETFs in size right now) we get a meaningful relief rally, carrying us up to the psychologically-important 17,000 level. At that point, please don’t be anywhere between me and my keyboard, because I am going to be shorting anything with a ticker symbol in size.
Where do we go from here?
If the long forecasted sell-off has finally arrived, where does the chart tell us we go from here?
First a note of caution. While the /es broke beneath its prior support 1961.50 (Week of December 15, 2014), it has not closed a weekly candle beneath it yet. A close beneath would be a stronger price action clue. Also, it would be stronger for the bears if we would rally back up to re-test that 1961.50, then fail to hold trade at or above it.
Our Highest-Ranked ETF is a Bet Against Oil – And The Global Economy
Each trading day, Portfolio Armor calculates potential returns for every security with options traded on it in the U.S. Potential returns are high-end estimates of how the security might perform over the next six months, and they’re based on an analysis of price history and on option market sentiment. On Friday, the security with the 5th highest potential return in our universe (which consists of all securities with options traded on them in the U.S.) was the ProShares Ultra Short Bloomberg Crude Oil ETF (SCO), which is 2x short oil.
SCO had a potential return of 19%, which was 5th overall, but the highest of any ETF in our system. Here’s a way an investor who wants to bet against oil (and, by extension, much of the global economy) can own SCO while limiting his downside risk to a decline of no more than 15% if SCO moves against him. The best part is, the cost of this hedge is negative, so our investor would essentially be getting paid to hedge.
Getting Paid To Hedge SCO (more…)
Once upon a time there was a big bad bear who lived deep inside an ancient forest. Very few had ever seen him and many decades had past since the last time the bear had emerged from the sanctity of the forest to satisfy his eternal lust for blood. In fact so much time had past, most of the people living in the villages surrounding the forest started to doubt the very existence of the bear. When reminded by their elders to heed their warnings and to not enter the forest, many youngsters laughed at them and openly professed that the big bad bear was just an old folktale and that there simply was no such thing. For one they had never seen such a beast in their entire life and surely a creature with such wanton lust for blood could not possibly exist without anyone taking notice.