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.

December Payrolls: ‘Back End’ Still Strong, Let’s Look Closer

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It is important to distinguish the ‘back end’ from the ‘front end’ of the economy or else all you end up with hype emanating from the financial sphere every time an economic data release comes out. For example, I was critical of Martin Armstrong’s post, Is the recession Starting? in a rebuttal post, Armstrong 3+ Decades Late on Manufacturing because Marty’s post not only brought back some jaw droppingly old fashioned concepts about US manufacturing (JiT and automation replacing labor) but it focused only on the ‘front end’ of the economy, affirming the “ECM” in a short info-blurb.

While we caught the downturn in manufacturing ahead of time (July) and also have been on the sharp deceleration in Semiconductor bookings and billings (a two month trend now), these Canaries in the Economic Coal Mine are just front end clues. Meanwhile, as we have been noting for months in NFTRH, the back end, with a strong US dollar at its back, has been doing just fine.

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Armstrong 3+ Decades Late on Manufacturing

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By Biiwii

As you may know, certain things get stuck in my craw from time to time because I came from industry, not from the abstract world of stock markets, finance and Keynesian economics. In short, I made stuff and sold stuff. The pressure was always there to get better, more efficient, more employee friendly, more modern. We did well in those regards, starting in the early 80’s.

Along comes a post by Martin Armstrong, the detailed merits of whom I will not debate because I don’t study him closely enough. Suffice it to say that I do not care for the cult-like following that seems to hold he and his computer, Socrates aloft in much the same way I did not care for the cult-like following (of “Comrades in Golden Arms”) that held aloft James Sinclair, by way of whom many people came to know Mr. Armstrong.

Indeed, too many smart people seem to put great weight on Martin Armstrong for the non-guru likes of me to criticize him in general. But I will go by what I read when the material is on a subject that I know about. US Manufacturing is a subject that I know about intimately; politics and associated biases are not. Yesterday, from Armstrong in response to another poor ISM release…

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I Spy the US Stock Market

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We have been following gentle downtrend channels like this one in SPY on the SPX and Dow for weeks now, along with a sideways channel on NDX. Subscribers were well prepared for yesterday’s drop to the channel bottoms and what I think could be a bounce attempt per support noted on this chart.

MACD and RSI are weak, the trend is down, STO has probably not bottomed after crossing below 80 and OBV is very weak. I think we bounce, but those with bearish conviction will be looking at the moving average cluster (which would fill the gap) or as an extreme, the channel top as limiters.

spy daily chart

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Semi Bearish?

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By Biiwii

A technical look at Semi stocks and the Semiconductor index

I must be bearish the Semi Equipment sector because I am short both LRCX and AMAT; the former a successful NFTRH+ long position that hit target and found resistance as anticipated by this chart originally included with the update. I am not so worried about the gap because it changed the trend and gaps that alter the trend of a stock can take a long while to fill.

amat weekly chart

I went through all the reasons I am bearish the Semi Equipment sector in this post at NFTRH.com, so we don’t need to cover that ground again. The Equipment sector is decelerating, period. But the Semis are more than the Equipment guys, they are the chip makers too, or even especially.

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Semi Book-to-Bill Ratio Decelerates

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I see analysis out there discussing the Semiconductor sector as a whole as being under valued relative to other stock market sectors. This seems to be based on the fact that the SOX chart has not made nearly the catch up move that for example, the NDX has in its post 2000 recovery.

While charts can provide many helpful views to probabilities, they cannot get inside an industry and divine the importance of a sub-sector (Semi Equipment; AMAT, LRCX, etc.) within a sector as a whole. The equipment companies (which I am short) are the Canary’s Canary, with the Semi sector in general being an economic Canary in a Coal Mine.

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