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.

Please Don’t Shoot The Messenger

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By Avi Gilburt, ElliottWaveTrader.net

In many of my articles, I have been attempting to enlighten those with open minds as to the true nature of the stock market. While most market participants have been trained to believe that the market is mechanically driven by exogenous causation, I have been providing historical and recent examples of why this simply is a market fallacy.

We have had some resounding real world examples over the last two years to poke some significant holes into the mechanical exogenous causation perspective. Remember back to the Charlie Hebdo attack in France, the Fed rate hike in December of 2015, the certain “crash” calls in February 2016, Brexit, Trump, the Fed rate hike in December 2016, etc. We have experienced many news “shocks” which were supposed to cause serious damage to the market over the last several years. Yet, the market was still able to provide us with a 600 point rally up to 2400SPX from February of last year, and this is all AFTER the Fed stopped QE.

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Do Stock Market Fundamentals Matter Yet – Or Ever?

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by Avi Gilburt, ElliottWaveTrader.net

The market has finally followed through on the pullback we were expecting to the 2335SPX region from 2400SPX, as we have outlined. The structure of the market over the coming week will likely tell us when the next 200-point rally to 2500SPX takes hold.

This past week, I read an article by a writer that has been decidedly bearish the stock market for quite some time. In his latest missive, he reiterated his position that the stock market is disconnected from the fundamentals of real world dynamics. And, then I read another article stating outright that this market is dangerously overpriced.

They seem to be no different than most analysts today claiming that the market is not being driven by fundamentals at this time. And, yes, I simply love that statement. It just makes me chuckle every time I hear it. It is no different than saying that the steering wheel is not driving a remote-control car. Well, of course it isn’t. It never has.

As Jeff Miller appropriately summed it up in his recent update:  “Most pundits, media, “smart money,” experts on valuation have been completely wrong for many years.”

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Don’t Feed the Bears

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by Avi Gilburt

In a recent update, I pointed towards the 2,335 SPX region as the next likely target in the market. This week, the market has finally obliged, and taken us to our next waypoint.

As I have been noting for several weeks, the market has been much more bearish than I had expected with only a slight drop off the all-time highs. Moreover, my ideal expectations had us dropping even lower towards the 2,335 SPX region before setting up another rally attempt.

But, the fact that the market has become so bearish of late, even though we have not dropped much off the highs, tells me that the market may only be setting up the bears for a whipsaw they may not soon forget.

When I look across the web and read what many are “feeling” right now, most seem to still believe the market has gone farther than it should. Many are now calling this the end to the “Trump Rally.” Many even believe that the market has hit its high for 2017. Week after week, we see one top caller after another coming out with reason after reason as to why the market is just “too high.” The market has supposedly so far surpassed its fundamental valuation that many are absolutely convinced we have seen a blow-off top.

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The Metals Rally Has Been Delayed, But Not Cancelled

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by Avi Gilburt, ElliottWaveTrader.net

First published Sat Mar 4 for members of ElliottWaveTrader.net:  Three weeks ago, as the GDX was consolidating just below its .764 extension, the market had a clear set up to break out.  However, when it did not do so over the following week, I noted in our trading room at Elliottwavetrader.net that I was hedging my portfolio because when a market has an opportunity to break out, and chooses not to do so, the market is often signaling it wants to pullback before the actual break out.  This seems to be the path the market has now taken.

My Perspective

In the past, I have noted that when the metals complex is in a larger bullish posture, I will always look towards the more bullish of the patterns as my primary, because experience has taught me this market often leaves people behind with shallow retracements:

“. . . based upon the larger degree perspective, with seeing 5 waves up from the 2015 lows, and then another 5 waves up from the December 2016 lows, I am on the hunt for the heart of a 3rd wave in this complex.  When we are looking for a heart of a 3rd wave to take hold, they OFTEN do not provide much in the way of pullbacks.  For that reason, I have always defaulted to a more immediate break-out scenario potential, since, otherwise, you can be left in the “dust” (pun intended), wondering where your pullback went.

Along those lines, the market has been consolidating near the highs for quite some time now.  And, as I noted last week, when the market has made a number of attempts to break out, and is unable, it often falls back into more of a correction, in order to take another running start at the heart of the 3rd wave.  So, with the inability to break out when it had a break out set up last week, I noted towards the end of the week that I would be hedging my account in consideration of that potential, and while we were still right at the highs.

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Wasn’t The Dollar Supposed To RISE On A Rate Hike?

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The dollar has been one of the biggest contrarian trades I have seen in years.  Every time the market is so certain about the direction it will run, it does the exact opposite and often in extreme fashion.  In my last weekend update, I noted how we called the multi-year rally off the 2011 lows when the market was expecting the dollar to crash due to all the QE.  And, I also noted how the dollar has been moving down after the Fed has raised rates, despite the common expectations that the dollar should rise.

Some days, if you listen really closely, you can almost hear the dollar laughing as it moves “unexpectedly.”

The same has happened with the Chinese Yuan. Recently, China spent 1 trillion US Dollars (a quarter of their FX reserves) over the past 3 years in an attempt to prop up the Yuan. However, the Yuan still lost close to 14% of its value against the USD over this time period.  Moreover, our lead analyst of our Forex Service at Elliottwavetrader.net, Michael Golembesky, appropriately advised a short in this market despite the Chinese “intervention.”  In fact, Mike and I wrote several public articles on this potential trade.  And, as you know, he has been quite successful in that trade, even though most others in the market would not consider such a trade in the face of the unprecedented action by the Chinese government.

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