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.

Institutional Buying and Selling (by Biffermas)

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I'm a closeted lover of indicators, even though I realize the limitations inherent in something based on little more than price and volume.  I haven't shared many of these with you recently because they simply haven't given any good signals for two months.  Choppy, low-volume movement doesn't trigger the extremes required for a juicy indicator-based position.

This combo from Marty Chenard's Stocktiming.com represents the major reason I signed up for his service. They are both based on institutional accumulation and distribution (although his definitions for each are somewhat cryptic).  These are showing promise for market reversal. but it's too early to draw firm conclusions.  However, looking from a bearish perspective I think the current readings should bolster some cautious optimism.

Chart 1: The Market Algorithm.  Based on institutional selling direction.  Chart description.

Rolling over

Chart 2: Institutional Buying and Selling.  Here is the chart description from Stock Timing.  What is remarkable about this chart is the relative absence of both buying and selling.

Institutional chart 

Review of Risk Appetite in 2010 (by Biffermas)

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Assessing
the general willingness of speculators to exposure themselves to risk is vital,
for obvious reasons.  From March, 2009
through December, speculators tripped over each other exposing themselves.  Since the first two weeks of 2010 are over,
I'll review the slimy tracks that traders have left in bonds, equities, and
gold / silver, and compare this brief period with a longer-term view.

Stocks - Comparing the high-fliers of Google, Apple, and Amazon vs. the stodgy old Coca Cola, Procter and Gamble, and Johnson & Johnson

Longer term speculative names dropping 

 

Ten day leadership 

 

Bonds - A comparison of high-yield (riskier) bonds vs. the boring low-yield (high quality) names.

Longer term risky bonds 


Ten day bonds 


Gold / Silver - A simple comparison of the gold and silver ETFs.

Longer term silver gold 


Ten day silver gold 


To sum, equities are showing a reduction in risk appetite during the first few weeks of 2010, Bonds are essentially neutral, and the silver market is showing continued desire for risk over gold.

Market Goggles (by Biffermas)

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Mustard
seeds aren’t sprouting… 

The banks
are effectively insolvent… 

The job
market continues its plummet…

Housing
is facing further inventory spikes…

The
American consumer has changed habits… 

And
the stock market is enjoying an historic rally…


This_market_is_looking_good 

I
read practically every entry on the Slope forum while trolling for comical
snippets.  One assumption I see
frequently made is the equation of the general macroeconomic reality with the
markets, i.e. one equals the other.  The
economy is not the market, and the market is not the economy.  They are two separate entities that
influence one another but can remain disconnected for long periods of time, as
2009 should clearly demonstrate.  

Tonight, after drinking a few glasses of cheap liquidity, feel free to
take Ms. Market home when the bar closes (or Ms. SRS), but realize she’s not the economy and might look very different tomorrow.  Your trading, and your mornings will be far more enjoyable.

Commiseration vs Collaboration (by Biffermas)

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Collaboration 

Much has been made about the perma-bear nature of the Slope of Hope, which always grinds my nerves.  The point is generally brought up by occasional visitors who make blanket statements that everybody here is shorting their inheritance into each successive rally.  I’m not mentioning anybody in particular…

 

Longtime Sloper and blogger, Leisa, posted some great trading gems last week.  The article is called, 2009 Reflections, and mentioned something that resonated with me. 

Commiseration v. Collaboration: The blogosphere offers unlimited availability of opinions. You'll have no trouble finding opinions uttered by very smart and erudite folks that perfectly align with yours. Best to seek out people that disagree with you and try to understand their arguments so that you can find potential holes in your thinking. I've never seen any business venue where commiseration led to good outcomes. Commiseration and collaboration are not the same. Commiserate less; collaborate more.

 

Collaboration is a recursive process where two or more people work together toward an intersection of common goals.  An intellectual endeavor that is creative in nature, done by sharing knowledge, learning, and building consensus.

The Slope is among the most collaborative message boards already.  People freely share ideas and accept feedback graciously, provided it’s given respectfully.  To stimulate the collaborative process I'd like to solicit trading ideas for this coming week, and anybody who wants to contribute is welcome.  Simply post a chart on the forum, and I'll compile and follow them throughout the week.  Winner gets the everlasting admiration of your friends here and 50 points clicked by me.  I'll post the winner's chart, name, and immortal victory speech (if desired) next weekend.

 

A few simple rules for fairness:  We'll mark the purchase price by Monday's opening, and the selling price on Friday's close.  Either long or short is welcome.  Stocks, 1x ETF's, and non-leveraged instruments only (no options or futures).  I’ll simply measure on a strict % gain.  Entries accepted all weekend, but ensure you submit on this post thread.