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I haven’t done many real estate posts lately, although, as an update to this one (in which an empty dirt lot was being offered for $10 million) I’ll mention that although the For Sale sign seemed to linger longer than usual, it was supplemented with a SOLD sign yesterday. So I guess the Chinese are still buying.
I’ve become quite inured to the lunacy of Silicon Valley real estate, so not much surprises me anymore, but I saw a full page color ad this morning in Gentry magazine (which is a free magazine they distribute around here, packed with a combination of real estate ads, for the tech zillionaires, and plastic surgery ads, for their vain spouses) that demands a post. So I’m writing it, you lucky so-and-so.
The color photographs of this nearly $5 million property featured the most blase, ordinary, McMansion style place you could imagine, but the headline was……. (more…)
I realize how emboldened our bullish friends are probably feeling based on the past two days, but the $XBD is key, and the size and clarity of this top suggests to me that the bounce we’re seeing is just that: a bounce, and nothing more.
I said on twitter last night that the obvious next target on SPX was a retest of the 2050 area, and we have seen that at the open. That area is broken support at 2050, with the 50% fib retrace of the decline at 2052, and both are a match with the ES weekly pivot at 2045.5. SPX has gone a bit over there this morning. If that can be converted to support then that would open up a test of the 61.8% fib retrace target at 2067, which is a decent match with the ES monthly pivot at 2063. If 2063/4 ES is converted to support that opens up a test of the daily middle band on SPX, which closed at 2083 last night, but at that point doing any lower lows under 1991 will be looking doubtful.
What about the fundamentals and the Brexit shock? What about them? I don’t think the Brexit news is that important in itself, and that being the case, it only remains important as long as the market thinks it is. That could end at any time and may already have done so. What might be bigger news, and this could happen at any time, is if a Eurozone country, or more than one, announces their own referendum. That would be potentially very important news indeed, as the contagion from the Euro breaking up, which seems likely at some point in the next few years, could force many of the Eurozone countries to default on their sovereign debt, and that could make a significant part of the international financial system insolvent. No such referendums are planned yet though and it may still be a year or two before we see the first one. As and when we do see one then the vote is likely to be influenced significantly by the almost certain sovereign default that would follow for the majority of Eurozone countries if they were to leave the zone.