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.

The Current Message of Yield Curves: Inflation or Deflation?

By -

With the state of post-Op/Twist systemic dysfunction, there are no absolutes, but…

Generally, a rising yield curve (after years of Goldilocks and her favored declining curve) would signal changes in financial markets.  But it is not as simple as stating ‘the curve is rising… it’s bearish!’ or ‘the curve is rising… it’s bullish!’.  It is potentially both of those things and it will have different implications for different markets and asset classes.

First, here is the state of yields and the yield curve currently, on the big picture view.  Trends are down in the deflationary continuum on the biggest picture for all items, but have been neutral on the 5yr and somewhat up on the 2yr ever since Goldilocks gulped the bears’ porridge in 2013.  The yield curve is in a downtrend.

us treasury yields and yield curve

(more…)

Groundhog Daze

By -

The tape on ES/SPX has been really dull for a few months now. Usually when this kind of volatility compression happens we get a proportionate expansion in one direction or the other afterwards which restores the balance, but we haven’t seen that yet and I’m considering the possibility that may not have happened so far because it’s not going to happen at all. If I struggled with insomnia I’m sure I would appreciate the tape we’ve been seeing in the afternoons lately, but I don’t, so these have been wasted on me.

In order to flip the trend back to bullish the bulls need to wake up enough buyers to deliver a definite close over the daily middle band. They failed to manage that yesterday, and at the time of writing I’m not optimistic about their chances of managing it today. If they do manage a close back above the middle band in coming days they will then need a confirming close above on the following day. SPX daily chart:

161025-I SPX Daily

(more…)

AAPL Poised for Positive Earnings Reaction

By -

Apple reports Q3 earnings after the close of trading on Tuesday. Wall Street always gets excited when AAPL reports, because investors and detractors are extremely passionate about the potential of the company — positive or negative.

All eyes will be on the “line items:”

+ iPhone 7 sales
+ Units shipped… Macs shipped… iPads shipped
+ iPhone selling prices
+ Gross Margins
+ Will a new laptop be released?
+ The China factor
+ Guidance
+ And Tim Cook’s spin on business

There are lots of “known unknowns” to assess before Tuesday evening, which is why I undertake a ritualistic chart-based exercise to see if my technical set-up work in AAPL provides clues about the likely reaction to the earnings release. The chart work enables me to strip away the fundamental pre-EPS hype to determine if AAPL is positioned either for a disappointment, an upside surge, or a neutral reaction?

(more…)

Crude Entrapment

By -

Hey, everyone, just two weeks until we elect President Pandering Pantsuit! Are you excited as I am? Yeah, that’s what I thought.

Anyway, my largest concentration of shorts remains in the energy sector. Crude has been in a tight little jail cell ranging from 49.62 to 52.22 for weeks now. We’ve got a shot of breaking this range, but even if we do, there’s strong support at around $48 where that blue trendline is. All the same, the energy short charts look a lot better than this one, so I’m sticking with them.

1026-cl