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.

Stock Market Melt Up Continues

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As Anticipated, Gold Lurks, Changes to Come in 2024. The macro market backdrop is not likely to go the way trend following market watchers currently anticipate.

In fact, with patience it could turn out to be like shooting contrary fish in a barrel. The stock market rally – which NFTRH had anticipated a year ago on a larger basis and since October of this year for its next leg on a more compact time frame – is doing a wonderful job of holding to its seasonal pattern (see below). The rally is sucking in the holdout FOMOs who, one by one are falling for the dual pleasantries of a softening Fed and by extension, a Goldilocks-like “soft landing” scenario for the economy.

Goldilocks was eventually caught by the 3 bears
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The Case for a Bullish 2024

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After such a strong year for equities in 2023, it may seem odd to think that 2024 could pad those already healthy gains. There are, however, a couple of reasons (besides the government’s persistent aid of the stock market) to consider this might be the case.

  1. The Presidential election year cycle tends to favor it. According to Merrill Lynch’s research, the strongest year is the third (which we’ve just had) at an average of +13.46%, whereas the second strongest is the fourth (which will be 2024) that clocks in with an average of 7% gains. The second year, at 4.49%, and the first, at 3.96%, are the laggards.
  2. Lifetime highs tend to beget more lifetime highs. As the ancient saying goes, trees do not grow to the sky, but until they stop growing……….they do. Below are seven major U.S. indexes which are presently at lifetime highs, having soared particularly strongly in recent weeks.

Regarding that second point, the reason highs tend to lead to new highs is fairly simple: everyone participating in that financial instrument is already a winner and, thus, optimistic. There is no overhead supply to contend with. In other words, there are no prior buyers in a losing position who are eager to get out. Added to this, the media (and featured tables in financial sections) draw attention toward new highs, which only adds to the excitement around a particular security or sector.

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