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.
I find this fascinating: examine the symbol FR:T10Y2Y, the 10 year rate minus the 2 year rate. This concoction has done a crackerjack job of predicting every single recession, and the most recent is no exception. I have tinted each instance when this data point went negative, and then reversed, to highlight the “V” bounce in this spread.
Long-time readers know how fond I am of metaphors and analogs. I have one to offer today, and it has to do with permafrost.
OK, I finally figured it out. It took me long enough, but now I get it.
For years, I’ve had a fascination with stand-up comics. I’m not just talking about their comedy, which I certainly appreciate on its own. Indeed, George Carlin has been Slope’s patron saint for years. I mean my ceaseless interest in their work. What they do. How they do it. What their life as a comic is like. What it really means to be a comic day after day.
I’ve never tried stand-up before. It isn’t out of shyness. I enjoy public performances. I’ve been on stages many, many times. Usually talking. Believe it or not, sometimes even singing. Yes, me, singing on stage. For an audience. Honest. But I’ve never tried comedy, even though I’m known to occasionally write funny stuff.
But it finally did click: I’m already doing it! I’m a stand-up. Or at least something extremely close.
(more…)As I look forward into 2021, I want to paint a broad picture of what to look for directionally, as well as key turning points to be aware of. I will focus on the two main trades I am most excited about, SPX and crude oil. As we examine the below charts and analogs, consider them as a rough guide, using crayon not pencil.
SPX Forecast
Let’s begin by taking a look at the broader market via SPX. To gain a big picture forecast view of SPX I prefer to utilize the 10 year crude oil to SPX analog. This analog was discovered by Tom McClellan, and looks back to see what crude oil was doing ten years ago to give us a glimpse of what to expect with the broader market now. A note on this analog, and the other analogs I will discuss in this post; they will look to show you direction and key turning points to be on the lookout for. They do not reflect the magnitude of the move to expect.
You have a next-door neighbor. His name is Sam. He seems like a decent guy and seems to do all right for himself. And, for the purposes of this allegory, you happen to know a lot about Sam’s financial situation.
First off, he makes a good living. He pulls down $200,000 a year. Impressive! So he is able to sell whatever goods and services he has available and is willing to provide for that sum each year. Well done, Sam. It’s a good income.
Oh, he’s also $250,000 in debt. But big deal, right? After all, plenty of people have debt. Mortgages, for one thing. Debt is part of life. he’s on time with his payments. So lay off. His “debt to annual production” is 125%.
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