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.

Bad Friday

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Allow me to express my warm feelings toward last Friday, a time in which the equity markets exploded higher for absolutely no reason at all (note the limit-up on the Russell, tinted in green) and terrified bears like your humble narrator into vastly reducing risk. Thus, instead of 165% exposure, I’m at 95%.

Here we are on pre-market Monday, and a good deal of that baseless gain has vanished.

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Sand Castles and Fed Waves

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The past two months have had the equivalent of about two years of news and market activity compressed into an incredibly tight and vivacious space. This is an incredibly difficult market to trade. Now that the weekend is upon us, allow me to reflect on an important personal anecdote and how it is informing my current approach.

The time leading up to the February 19th was a total and utter grind. It was an era of a VIX in the sub-teens and a relentless notch higher every single day for the bulls. It was horrific. And then, out of the clear blue sky (and many weeks after the virus was widely reported on the news), we got our first good, hard dip. For me, it was like a tall glass of cool water in the desert.

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OK, So Now What?

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Misplaced optimism really rubs me the wrong way. And after Thursday’s close, the world was absolutely drenched in the stuff. If you watched the coronavirus briefing, as I do each afternoon, you would have rightly assumed it was the last one. There was an enormous “good work, everyone, we’ve learned a lot, take care!” vibe to it, and it seemed clear that the mood was much very one of victory and completion.

This was reflected in the after-hours market as well. Since the ES successfully managed not to crack 2750, it took a rocket ship higher, and it tagged the line I put in place from early in March.

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Kids Today

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Back when I was a lad, I subscribed to Investors Business Daily (umm, that didn’t last). There was a full page ad that appeared just about every day for something called The Better Software People, and it basically showed how, using their software, you could have turned $10,000 into $43 million, or something like that.

I don’t think I ever subscribed to their product, but the ad had the same effect on me as I suspect it had on a lot of other people, which was to put stars in our eyes about how easy it would be to just print money by participating in the equity and index options market (and this was back in 1985, so you can imagine how horrible the options markets were, to say nothing of the bid/ask spreads, which were probably wider than Kim Kardashian’s backside).

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