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.

Topping is a Process (by Springheel Jack)

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I posted the SPX chart below in my MarketShadows post at the weekend and I'll post it again this morning. You can see that full post here. It shows the very ambiguous close on Friday at the retest of broken support and at resistance on the declining channel from the high. I sketched in two topping options if we see a break up from there this morning, and they are that SPX has made the first high and valley low of a double or M top, or that SPX has put in the left shoulder of an H&S pattern. Either of those would obviously allow the current high to be tested or exceeded:

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Update on My Favorite Long-Term Short: ODP

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Back in May 2011, I originally posted about shorting Office Depot.  The idea is finding a sector with three competitors, with margin compression, struggling for survival in a crummy economy.

At the time, ODP was at $4.16.  Since then, its only bright spot was during the rising Ctrl+P tide of early 2012; but reality seems to have returned… and as of this writing, the stock sits at $1.63.

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Mousetrap Victims

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They say that if you build a better mousetrap, the world will beat a path to your door.

I suppose that's partly true, but no one really thinks about whoever it was that was in the business of dealing with the mice beforehand. They're going to suffer, because it's their doorway that will suddenly find itself as empty as a hermit's address book.

I present to you below four long-term charts of some companies that were on the losing side of mousetrap creation. They have several things in common:

+ At one time, they had valuable, thriving common stock;
+ They were leaders in at least one technological field;
+ They allowed competitors (like, oh, say, Apple) run off with their market by creating something better;
+ Their stock has since entered a death-spiral

Some true believers of these securities might point to Apple from 1996 as the kind of turnaround they anticipate. My retort would be that there's pretty much only one Apple on the planet, and I can't really think of any other company in the tech field (except, I guess, IBM from the early 90s) that has risen from the ashes.  

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Stock of the Century

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I know I've mentioned WalMart before as a breathtaking stock, but I feel compelled to mention it again as it is pushing to never-before-seen highs in an otherwise boring market.

People point to Apple as the ultimate "gee, if only I'd bought it" stock, but WalMart puts Apple to shame. If you had bought AAPL at the IPO (and held on during the gut-wrenching ups and downs before it finally found its footing about a decade ago), your gain would be 15,000%. Not bad!

WalMart, on the other hand, is up more than 190,000%. There's a reason that Sam Walton's fortune, even when broken up into little pieces among relatives, since puts all of them near the top of the world's richest people.

Even though WalMart is sort of a running joke, it's undeniable that this must be an astonishly well-managed organization. They say you can't argue with success, so I would suggest that any arguments against WalMart would be swiftly snuffed out with just one glance at the chart below. If God himself came down and said this would be a $200 stock in a few years, I wouldn't have any reason to doubt it.

0710-wmt

Fibonacci Fans and the S&P 500

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In my (all-too-lengthy) charting experience, I have found some charts are especially "Fibonacci-friendly" when it comes to fan lines and retracements. One such example is $SPX, the S&P 500, and its fan lines.

After Friday's sickening surge, I was curious to see what was going on with the S&P from a long-term perspective. I took great interest in how the very long-term fan line (dating back – I am not making this up – eighty years) was asserting itself as resistance. Look at the areas I've circled to see how this line has behaved as a magnet for prices.

0702-SPXfib

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