Slope of Hope Blog Posts
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Over the weekend I had the opportunity to do some hedge fund research
on Bloomberg. I was surprised to see Jim Chanos's fund do rather poor
over the 10 year period. More surprising was that the noted short seller
whom I deeply respect, had a negative return even in 2008. Anyways as I
looked into Hugh Hendry's fund, he has had a 300%+ return over the
years which is remarkable for a fund with so much in assets. What was
most interesting though is that most of his positions consisted of
strong technicals on long term ranges.
As of now, his main holdings consist of :
As suspected the surge in USD/JPY and Nikkei is causing global
markets to factor in an inflationary boom. World bond markets and
interest rates are showing a change in trend. Banks and housing remain
very strong while most commodities are making all time highs.
the S&P 500 has started to stall at resistance levels the past few days (Editor's Note: this was written Thursday), I
am out of the VIX calls because I only suspect it will be a pullback
and nothing more. I am thinking it will be the last pullback before the
market truly takes off.
While I hate to be so sure of
the future, every single market that factors in inflation is looking
very strong while bond markets in my eyes have started topping out. Now
the only thing left in a huge inflationary boom is the fall of the US
dollar and the rise in silver and gold. You can take your bets now if
you want, but I need to see the chart's confirmation before I place my
bets on those.
The title speaks for itself.
Let's cross our fingers that the Gasoline futures do not break resistance…..
The Housing market hits resistance from its peak in 2005 coinciding with a 23.6% Fib retracement level.
Long time no see Slopers! Coming into 2012, I thought I had 2 trades for donators that were great for long-term investments and thus stopped checking the markets everyday. Unfortunately one of those trades got stopped out in May and thus had to come out of retirement.
The trade that failed was shorting the 30yr Treasuries…which went BUST as of May 2012 as it broke a 30yr resistance line which coincided with a resistance hit of the NYSE Composite(note:I am long bonds now instead of short)
Happy New Year, everyone! Hope everyone had a safe and fun NYE. I am sorry I haven't been updating as much over winter break. Unlike other investors/traders, I have no target for the S&P 500 by the end of 2012. I am not even going to waste my time guessing.
After reviewing 1500+ charts (no life) ,there are cases for both bull and bear and that is why I think the Sp500 ended with the yearly Doji candlestick as well. I will still be referring to deflation/inflation scenarios as opposed to risk on/risk off as I think the markets still haven't decided what will be the real outcome.
For example usually bonds and stocks move in the same direction…but when there is a deflation spiral, bonds and stocks start moving the inverse of each other…. Some guys who have been spot on in 2011, like Hugh Hendry and Jerry Lou from Morgan Stanley called the commodity spike as a "head fake" and only time will tell if they were right.
"History doesn't repeat itself, but it does rhyme." – Mark Twain
A little fun chart based on the 187(gangster code for murder) exponential monthly moving average.
The 70s were a period of stagflation similar to what we have now…. which also led to a gold spike in the 80s as well as interest rates spiking.
First the market tops out in 1968(2000) and we pull back to the 187 monthly EMA but never close below it and then start the next cyclical bull.