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.

Fed Rate Hikes, Fiscal vs. Monetary Policy and Why Again the Case for Gold?

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I’ve been thinking about the current Fed Funds rate hike cycle, which is logically gaining forward momentum now that the Fed can stand down from its 8-year, ultra-lenient monetary policy cycle.  That is because the Obama administration’s goals required a compliant Federal Reserve to continually re-liquefy the economy as its fiscal policies drained it.

With the coming of Trump mania and its very different fiscal policy goals, we will witness the end of much of what I considered to be the “evil genius” employed by the Federal Reserve, mostly under Ben Bernanke.  When he oversaw the brilliant and completely maniacal painting of the macro known as Operation Twist in 2011, I knew we were not in Kansas anymore.  We’d gone off the charts and off the balance sheet into a Wonderland of financial and monetary possibilities.

What else would you call a plan to sell the government’s short-term debt and buy its long-term debt in the stated effort to “sanitize” (the Fed’s word, not mine) inflationary signals on the macro?  It was evil, it was genius, and it worked.  So too did various other financial manipulations that took place before and after Op/Twist.  And here we are.

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The U.S. Economy, Post-Payrolls & Pre-FOMC

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This week’s Notes From the Rabbit Hole included a little Payrolls/Wages related economic discussion before moving on to the usual coverage of stock markets, commodities, precious metals, bonds, currencies and related indicators and market internals.  With FOMC on tap there will be more data noise directly ahead, but then I expect markets to smooth out into what is looking like a sensible short and intermediate-term plan.

U.S. Economy

Graphic sources:  St. Louis Fed, BLS, TradingEconomics, Macrotrends & Bespoke Premium

So Payrolls came in a little firmer than expected and interestingly, the manufacturing sectors did some solid hiring. This is an area that is sensitive to coming fiscal policy because it is subject to regulations likely to be repealed (especially environmental, a real fundamental underpinning) and high paying jobs repatriation to U.S. shores (a phony baloney fundamental, at least in large part, in my opinion). In this graph we see that manufacturing job losses had been easing into the election, but job gains have ramped up after the election. All of this on anticipated policy changes? (more…)

Peak Trump

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The following is the opening segment of this week’s edition of Notes From the Rabbit Hole, NFTRH 437.  While I think several proposed Trump administration policies would have positive down the road effects for corporate America and the asset ownership class, the administration will have to survive intact in order to implement them.  This is one erratic and shall we say, fluid, situation and this is not a leader who inspires confidence, speaking personally at least.

Peak Trump

Last week we reduced the charting in favor of increased talking. That was because I had some things to say about the at-risk gold sector and its incomplete macro fundamentals.

There was also a lot to say about stock market sectors that would be favored or avoided if the long-term bond yield environment continued to shift to declining (bonds bouncing). Last week dealt a blow (in the form of Trump’s triumphant speech to congress and unusually aggressive Fed jawboning) to bonds, but did not break the play.

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SPX 30 & 12 Month Cycles

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  1. With the disclaimer being that as an intuitive and more artful TA using inter-market ratio measuring tools and the like, I am the furthest thing from an accomplished cycles analyst.  Indeed, I am probably less adept at it than you are.

That behind us, I was fooling around with Stockcharts.com’s cycles tool and came up with this monthly view of the S&P 500, with the thick black lines being a 30 month cycle and the thin green lines being a 12 month cycle, each starting from the 2000 market top.

Each cycle has caught some pretty significant turning points with the 30 mo. having caught the 2000 and 2007 tops along with the 2002 bottom and the pre-corrective 2015 top.  The 12 mo. cycle seems to have been more adept at spotting interim turning points but it did catch the 2009 bottom.

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Silver 2011, Dow 2017

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This is not a top call.  My target was Dow 21,000 and this pig blew through it and flew to 21,115.  This is a comparison of one bubble to another a potential other.

In 2011 silver put on an amazing run.  First, it dropped and crashed the SMA 50 at the beginning of the year.  Then it rebounded, became over bought by RSI (and distance from the SMA 50), tested the short-term EMA 20 and then went all Sky Lab, making a 2nd strenuously overbought reading on RSI.  Then… kerplunk.

silver 2011

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