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.

Bull vs. Bear Death Match: Why Q1 Operating Earnings are “Make or Break”

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Contributed by Hedge Fund Tips: In the past 30 years, we have had 7 instances of sequential S&P operating earnings drops of 6% or greater (data table below highlights sequential drops in yellow/red). In each case, it was not a positive – and a stock market correction reflected the downturn in economic activity.

There is a KEY distinction when referring to sequential operating earnings declines:

In 5 out of the 7 times, the sequential drop was limited to 1 quarter (SEE Blue Vertical Lines Above) – meaning the following quarter came in above the previous quarter where there was a precipitous operating earnings drop of more than 6% sequentially.

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Twenty Eight Twenty Five

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Before I went on my pre-opening walk with my two larger dogs, I took a couple of snapshots (I am typing this nearly an hour later, well after the opening bell). My observation was, and continues to be, that the line at 2825 – – which for half a year represented the iron wall containing the bulls – – was where the battles were continuing to be fought.

Even to a haggard chartist like me, I am stunned at the power of this line. Take note, on the left, of the clear repulsion at this level. Further take note of how much pushing and shoving is taking place at the exact same spot over the past two weeks, as the bulls and bears try to wrest control from each other. Fascinating.

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