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.

Unabated Lunacy

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One of the most important touchstones of the equity madness which has gripped our nation since early 2020 is Reddit’s own wallstreetbets, which is predominantly populated by middle class young men with budding (or flourishing) gambling addictions.

It’s a good place to glance at on a regular basis, since WSB goes manic during strong periods (like now) and absolutely suicidal when the market has crashed, let’s say, by 1%. The degenerates on the site have no compunction about not just gambling, but gambling with borrowed funds, such as this example right here.

This fellow took out a $300,000 loan to gobble up almost 20,000 shares of a company whose symbol is VSTE.

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Possible Path For Crypto into October

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I’ve been having a good look at the longer term correlation between Crypto & equity indices and it is a strong one that has been impressively consistent over the last 8 years. The chart below just covers the last five years of SPX vs BTUSD (Bitcoin) but you can see that the upswings and downswings tend to be correlated, and going back to 2016 the big highs on both are decently matched, with a strong tendency for Crypto to turn down before equities do.

I was asked a couple of weeks ago whether this might be happening again, with Crypto having topped a few months ago and SPX, NDX and Dow all looking as though a significant high might be close. I’ve looked at that and would say that it would be more typical for the two highs to be within a month of each other, though there is a possibly comparable period as BTCUSD was forming a bull flag for ten months or so in 2019-20 with the C wave down during the 2020 COVID crash.

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Triple Pain

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Until about twenty-seven hours ago, I couldn’t get enough of this market. As it is now – – yuck! My only salvation is my 40% cash position and the fact my options are all 2025/2026 expirations.

This week has had three rallies. The first (red arrow) I completely expected and was prepared for. The second, is blue, was the Jensen Huang rally, was a shocker and completely wiped out the relief from the CPI release. The third, in magenta, is what we’ve seen just over the past couple of hours. The market is back into “ramp and camp” mode, and I am not a fan.

King of the Midlines

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Let’s take a look at the biggest, oldest, and most important ETF on the planet: the SPY. In particular, there is an ascending channel on the SPY that goes back a full sixteen years (!!!) whose midline is, I believe, quite potent.

Over the course of 2024, the SPY has spent the majority of its time beneath the midline, with a couple of brief exceptions (in the ovals). The relationship of the SPY to the midline is more in the form of resistance, as I’ve emphasized with the arrows below.

Zoomed in this close, one cannot appreciate the longevity of the channel and its midline, but I believe these otherwise invisible levels have power.

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