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.

Pick of the Day – MON (by TraderHR)

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Monsanto Co. (MON), after breaking above its descending trend line and reaching the 74 area in late June, has been consolidating in the last two weeks in a bullish flag formation. This flag was broken today as the stock jumped toward the highs for the year, thus suggesting a new up-wave has started.

If MON breaks its 52-week high at 76.69 in the coming days, we could see the stock reach the 78-79 range next. Preferred entry (buy stop) price is at 76.80, with a stop at 74.30.

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Originally published on TraderHR.com.

Mosaic on the Move (by Mike Paulenoff)

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With some help from a Goldman Sachs research upgrade to conviction buy of Monsanto (MON) this morning, the chemical-fertilizer section, in general, and Mosaic (MOS), in particular, have attracted some sympathetic buying, as the stock claws its way back up towards a retest of Monday evening's earnings reaction high at 69.97.

I expect that to happen in the upcoming hours, but it is what happens thereafter that intrigues me. Let's notice that a three-month resistance line at 70.30 as well as the July high at 70.69 represent a formidable resistance band, which if hurdled and sustained should trigger upside continuation and acceleration towards 74.00-75.00.

At this juncture, only a decline that breaks yesterday's low at 67.55 will delay the initiation of a new upleg in MOS.

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Originally published on MPTrader.com.

JPM & TBT Poised for Upside Reversal (Paulenoff)

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If the directional overlay of the big money center banks — i.e., JP Morgan (JPM) — on the ProShares UltraShort 20+ Year Treasury (TBT) is any gauge, then the mature downtrend in both JPM and the TBT is poised for a powerful upside reversal.

The TBT hit its low on July 12 at 31.87 and has climbed to 33.25, while JPM hit a new multi-month low today at 38.93, but has recovered to 39.50 so far.

This chart is "warning" us that higher rates matter to a major lender like JPM, especially in a likely new regulatory environment that seeks to redefine banks in a more traditional business role (not as speculative hedge funds). The key to such a successful transition for a JPM, for instance, is an ability to make money by borrowing near term, and lending longer term. Higher longer term rates will accomplish that, which just might be what this comparison chart is telling us.

Of course, it also could be telling us that no matter what Congress and the President decide to do about the debt ceiling and the deficit, credibility and trust in the efficacy of the U.S. Government has taken a serious hit in confidence, which is why longer term rates (and the TBT's) are headed higher.

Nonetheless, regardless of the reason for higher longer-term rates, JPM should benefit.

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Originally published on MPTrader.com.

Gold Getting Crowded (Mike Paulenoff)

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About six sessions ago when spot gold was climbing towards its May-July resistance line ($1551) and EUR/USD was pressing lower towards its May-July support line (1.4170/80), I made a judgement call: I decided to buy the euro into its support line, looking for the end of its 9-week bullish consolidation pattern, ahead of a powerful thrust that projected to new highs above 1.5000.

At the same time, I decided to forgo entering the long side of gold — the SPDR Gold Shares (GLD) — into strength, which usually is a mistake, and instead looked for gold prices to pull back before entry.

Well, that turned out to be exactly the wrong decision, didn't it? EUR/USD plunged 4 BIG figures and sliced beneath all key support points between 1.4170 down through 1.3970 — into and below its rising 200 DMA at 1.3910. Meanwhile, spot gold prices never did pull back at all and just continued to climb from $1545 above its resistance line at $1551 towards its May (all-time) high at $1577.60, which was hurdled today!

In other words, gold turned out to be a "no-brainer, no-stress" position, while long EUR/USD turned out to be a nerve-racking, highly stressful, and unprofitable long position. What now?

From my technical perspective, the psychology underlying long euro versus long gold has changed significantly in the last couple of sessions. Right now, EUR/USD remains a very discredited, almost hated, currency, especially after it wiped out lots of longs in the recent plunge. No one wants euros … and everyone wants gold, which is an "upside-down" psychology that warns me that long gold has become an exceedingly dangerous and crowded space, which will require a significant bullish catalyst to continue higher.

The euro, on the other hand, looks to me like it ended a correction yesterday morning at 1.3835, where it managed to recover to, and accelerate from, its rising 200 DMA. If my work proves accurate, albeit a week too early, EUR/USD has started a new upleg — as difficult as that is to believe given the issues facing the PIIGS.

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Originally published on MPTrader.com.