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.

Big Picture Comment-Cleaner

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Well, it's early Sunday morning, my entire family is still asleep, and I'm more interested in making a fruit crisp for breakfast than I am going through charts right now (after all, something has to be done with all these pears). So I'm going to do a quick, lazy post and recap where I think things are heading for the next year and a half……..going backwards:

 

+ I believe the equity markets will bottom (for a while, at least) in early February 2013 after a worldwide and devastating financial meltdown. My target is for the Dow to reach its nadir at about 5,750 – – a greater-than 50% drop from present levels. Obviously many individual stocks will be hit much harder than that in such a scenario.

+ As a predicate, 2012 will be an historic year on many dimensions – – financial, political, and social. As of this writing, there doesn't appear to be any candidate that has a chance at beating Obama, and frankly it really doesn't matter to my charts, but I wouldn't be surprised if someone that isn't even on the political radar right now wins the election. Again, it is immaterial to my financial projections, but it would make sense for Obama to be a one-termer in the face of what I believe will be a calamitous 2012.

+ Before such a gigantic plunge begins, I think there will be one last desperate and massive measure by the world's bankers and central planners. It would need to be measured in the trillions of dollars, and it would, in my opinion, lay the final groundwork for what will, in the end, be a catastrophic failure of the worldwide markets as well as a complete restructuring of nations and their form.

+ Shorter-term, I believe we could be positioned for a "mini-crash" in October, taking us to a target of about 1030 or so on the S&P 500. This event, I believe, will give the Powers That Be just the excuse they need to shove a multi-trillion dollar "solution" down the world's throat. At that time, I think it will make sense to cover my short positions and, for a while, work with a bullish bias (except for Treasury Bonds) and wait for the aforementioned apocalyptic fall.

So, in sum – – – a fall to about 1030, a rise to as high as 1300, and then a fall into oblivion. Of course, real-time conditions may compel me to utterly change my mind about all this, but my belief in the above scenario is fairly deeply-rooted. If this plays out roughly as I've described, I think early 2013 will provide bargains that haven't been seen since the early 1980s.

For now, I can say that I'm positioned entirely short with a 60% commitment, and I have a mountain of interesting short candidates waiting in the wings. If we are breaking beneath the range established over the past six weeks, the bears are going to do great, and I want to be fully on board for that. The key, though, is to break that range.

It is entirely possible I could be in over 100 positions and fully committed early this week, but I'm going to let the direction of the Euro and ES guide me.

 

The Big Picture (by Springheel Jack)

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Well I'm back from holiday now and my normal posting schedule will resume, though I was busy with post-return stuff this morning so today's post is late. That's not altogether a bad thing as I'd like to have a wide-angle look at the markets today to see what looks important across the various markets I follow. I do have one shorter term thing to mention though and that is that the ES low yesterday established a rising channel from the low last week. Until that breaks down there is a real risk that ES may move up sharply to the upper channel trendline, currently in the 1236 area:

Looking across the various related markets the general picture is coming over as pretty bearish. Copper has now broken rising (broadening wedge) support from 2008 with confidence on the daily chart and next decent support is at 365. Once that breaks, as seems likely, a test of 305 support is on the cards. A break up of this kind on copper would have been seeing as very bullish for equities. It's therefore hard to see how this major break down can be anything other than bearish for equities over the next few months:

EURUSD also looks bearish on the daily chart. Rising (channel) support from the 2010 low broke and was retested last week. I'm expecting a break of the last low at 1.35 too long and further declines after that:

The oil futures daily chart also looks bearish here The rising wedge that I posted a couple of times as it was forming has now broken down and the wedge target is at the August lows at strong 77.4 support (Dec futures). I'd be happier about that playing out soon though if CL has hit declining support from the high and it could be that we will see oil trade sideways for a few days until that is hit:

30 year treasury futures are more mixed here, but there are two rapidly closing trendlines that should deliver the next big move. The first is strong resistance at 142 which has been tested three times and could be a triple top. The second is rising support taken from the July high that is now in the 139'13 area. Rising support will meeting current resistance at the end of September so we will see a break up on down before then:

My last chart today is the AAPL monthly chart, which I've been posting on various timescales for the last eighteen months. I was wondering before the summer top whether AAPL hitting my upside target could mark the bull market top, but I think we've seen that already, though neither SPX or NDX has yet reached the technical bear market confirmation level of a 20 fall from the highs. I am now thinking that AAPL hitting target in the 430 area may signal the NDX high for the current move up and am watching with interest to see when that is hit:

I don't think we've seen a really major low on equities yet and after the current move up ends I think we may see new lows on SPX shortly afterwards. I'll be watching for a break of the rising channel on ES from the last low to signal that the current move is ending. Over the next few days we have a lot of things that could move the market a long way in either direction, with FOMC tomorrow, and seemingly almost daily crises and interventions in the Euro area as Greece and other PIIGS slide towards default. What I'm not expecting to see is an announcement of QE3, as rising inflation in the US would seem to rule that out, though we might see a smaller scale operation announced by the Fed this week that could lift the markets for a few more days.

Removing Human Emotion (by Consistently Incredulous)

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This past Labor Day weekend, I had an extra day off with some good drinks, an OpusX and some brats from the grill (and if you don’t know to pre-boil in onions and Lienes– shame on you).  If my mother-in-law hadn’t come to town – life would have been good.  But she did, and as always- she never leaves.  Maybe not “never,” but two weeks of pain & anguish is a damn long time.  So while my wife takes the self-inflicted hit (as well she should… I didn’t invite the harpy), the kids I have time to hide behind monitors… and I can author a post. 

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A Sloper’s Analog

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A Sloper by the avatar name of phantomcapital sent me his view of the market's future. I really, really like this analog he put together, and he kindly gave me permission to share it with all of you. It lines up nicely with my own thinking.

As we all know, it's dangerous to get married to analogs, but if you follow the mantra that "it works until it stops working", you'll be better off. Thank you, phantomcapital, for your hard work on this and allowing me to let the group see your chart.

0907-spx-analog