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.
At the outset, I want to make plain I respect the rights of others to their work, and I offer this post (and its second part, for premium readers) based on Fair Use principles. This post I am composing is an overall critique of the financial prediction industry, and I am including excerpts from various works, most than a decade old in most cases, to make a point.
I would also make very clear my familiarity with “Those who live in glass houses……….’ The purpose of these two posts isn’t to laugh at predictions that never transpired. But I definitely want to make plain that respected, well-funded, and widely-read pundits can create some breathtakingly bad prognostications, and we can only realize that in hindsight.
Let us begin with this page, which was part of a very, very lengthy report from Longwave Group. (As with all these images, click it for better readability; those of you with big screens will have no trouble being able to read the copy). The thrust of this report was that the Dow was heading to 1,000. The chart offers a conjectural path, which was basically similar to a lead sphere being dropped from a skyscraper.
You can hardly turn around these days without seeing a headline which, in some form or another, says that the entire world is rotating into Small Cap Stocks, and that’s what 2021 is going to be all about. It’s hard to argue with this when the ultrashort against the Russell (symbol TWM) looks like this train wreck, having lost 80% of its value in seven months!
First off, thanks to The Lone Ranger for inspiring this post in the first place.
And now let’s begin…
Starting with the bird’s eye view, the chart below shows all available data on the FOMC’s operations going back to 2007 (for a more detailed explanation with chart of all the FOMC operations current to Apr 2020, check out this excellent post I found here).
Except for the period between 2015 and the end of 2019, virtually all of the market gains were concurrent with FOMC operations. I will focus in this post on the periods of high complacency as identified by extremely high levels of the 100SMA (20wk SMA) of the Equity Put/Call ratio. If you want to read those posts, the first is here and the second is here.
It’s an odd thing. Many people write to me. A surprising number of them tell me of their troubles, some of which are sweeping. Trading troubles. Spouse troubles. Do I seem empathic? Perhaps. I should take it as a compliment. Or maybe on bad hair days, I resemble Ann Landers, which compels strangers to write Anyway, I am reminded of this quote we have all heard:
OK, confession time. I’ll admit it. I finally bought crypto last week. Never did it before until then. I bought Ethereum ($ETH).
Why didn’t I say anything? I suppose a superstitious belief that the millisecond after I said anything, it was go plunging to $0. But a bullish base is a bullish base, and it’s not accident that I’ve been marveling at the quality of the pattern. But there’s more to it than that.