Slope of Hope Blog Posts
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I’ve mentioned a few times over the past few months that the equity indices are likely in a topping process, and a few days ago that the setups on NDX and RUT had reached a stage that I would expect to see at a major top. The same is true of SPX. Do I think these patterns will play out? Most likely yes.
I’m not expecting them to play out right now, but that’s mainly because big declines are a rarity in December. These tops have formed, but I’m expecting the markets to limp along through December until the winds turn more bearish in the January to March timeframe,
I may be mistaken however, and if I am then these topping patterns may have already started what will likely be a strong retracement of the huge move up from the March 2009 low. That decline could be triggered, as hard as a I find it to believe it, by the Fed increasing interest rates from almost nothing to slightly more than almost nothing next week.
I am typing this hours before GLOBEX opens on Sunday, so I continue to have no clue what kind of follow-through (if any) will exist from Friday’s selling. My dumb guess for this week (or hope, at least) is to wrap up the selling Monday/Tuesday, get the Fed announcement, rally firmly until the year is almost over, and then start slipping again to begin what promises to be a really amazing 2016. I remain only in short positions, but half as committed as I was Friday morning, and I intend to trim with gusto before Yellen and her bizarre voice commences Wednesday.
The word play in the title is in reference to the ridiculous fuss over COMEX gold inventory and other promotions masquerading as fundamentals put out by cartoons masquerading as analysis.
30 year divided by, and 30 year minus 5 year are neutral at best. Yield spreads would be rising in a gold-positive environment. As a side note, this spread also tends to bring trouble for the stock market during its initial stages of rising.