Slope of Hope Blog Posts

This is the heart and soul of the web site. Here we have literally tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. You can also click on any category icon to see posts tagged with that particular category.

Facebook Earnings: Seminal Market Moment? Or, Sideshow?

By -

In the beginning, Facebook connected the world. It brought new hope for humanity and individual, human connections. But the dark, underbelly of the Facebook Beast would be revealed in an unprecedented and extraordinarily jarring manner. A soulless serpent would slither in, unnoticed, and disrupt the otherwise innocent processes, effectively co-opting, undermining and exploiting the intended use of the “gift” Facebook had bestowed upon us, for darker, more nefarious purposes.

Hmmm… that sounds vaguely familiar.

Okay, there’s the requisite melodramatic opening scene that effectively outlines and condenses the evolutionary story and subsequent disruption of the Mother of all Social Media platforms. Fast forward to today, and we have an out of control, unmanageable behemoth of a company, whose right hand still doesn’t know what its left hand is doing. Although, to its credit… it’s trying. But it’s too little, too late. Users are dropping like flies in the haze of a media pest spray discharge. And, distrust of the platform in light of its many convoluted tools and rules, is rampant. Suddenly, the household name of Facebook, has become a household scourge.

However, Facebook continues to espouse the virtues and benefits of its life-changing, relationship-forging platform that started it all. Ah, Facebook… the originator of the great Social Medial Experiment. We were the first. Trust us. We’re trying… really. (more…)

What a Difference Six Years Makes

By -

There was a time, many years ago, that Netflix was this scrawny little small-cap stock of a firm that mailed DVDs to monthly subscribers. I was an early user of Netflix, and I absolutely loved it. (They are based here in the Bay Area). No one dared dream they would have a market cap of over $160 billion, as they do today. If you told someone ten years ago that Netflix would dwarf General Electric in terms of value, they would have laughed you right out of the room.

Although it’s a darling these days, six years ago, Netflix was absolute dog meat. They had introduced a product called Qwikster, which was considered the biggest product debacle since New Coke. By late summer of 2012, the stock had fallen 80%. Now just take a moment and consider that. Try to imagine, say, Amazon falling from 1844 to 377 in the span of a few months. On top of this, it’s not like they were in the throes of an economic meltdown. This was 2012, when the recover and QE fever were all the rage. So NFLX was garbage, and the news media reflected it: (more…)

The Paper Towel Market

By -

Those of us of a certain age will recall a frequent television commercial for paper towels illustrating how much more absorbent they were than the competition. They were described as “the quicker picker-upper“, and their absorbent qualities would be illustrated thusly:

It occurs to me that this is precisely the kind of market we are in right now. If bad news comes, sure, there might be a day or two of rumbling and hand-wringing, but it all gets absorbed, it all gets digested, and everyone moves on. Recent history has been just another example of this resilience. All the horror about a global trade war seems to have been shrugged off in a matter of three days. (more…)

VIX “Normal” Price Range Using TPO Profile Study

By -

TPO stands for Time Price Opportunity. By using a TPO profile chart, you are able to analyze the amount of trading activity, based on time, for each price level that the market traded at for any given time period. The Point of Control (POC) is the price where it spent the most time during that period and in that timeframe.

If you look at the following monthly chart of the VIX with the TPO profile study added to it along the right hand side, you’ll see that its POC (on a monthly basis) since 1986 is 20.53.

Whereas, the TPO POC on a daily timeframe from 1986 is 14.66, as shown on the daily chart below.

This tells me that the average “normal” range of the VIX during the past 33 years is between 14.66 and 20.53, regardless of its trading activity on either a monthly or daily timeframe.

I’d also go a bit further and say that any time it traded outside that range for any length of time, it was “unusual” and, therefore, unsustainable…something to consider when you’re taking longer position trades in equities.

As of Thursday’s close, the VIX was trading in “unusual” territory at 13.23below the “normal” range, where it has spent most of its time since the November 2016 general election.

The last time it spent the majority of its time below the “normal” range was from 2005 to 2007 leading up to the 2008/09 financial crisis. (more…)

The Ceaseless Ascent

By -

Well, I’m glad the site is doing so well, because the markets over the past week have made me feel pretty lousy. It’s nice to at least have Slope humming along to comfort me.

I’d like to offer the following off-the-wall musings as a very different take on the market. It’s a disposition that many, many people share, and perhaps it would help me get in sync with the rest of the planet to actually type what everyone else is thinking. I submit this to be neither facetious nor wry. So here goes.

(1) Just as humanity as made sufficient advancements in technology to, for example, feed everyone on the planet, so, too, have we reached a sophistication in knowledge and financial management rendering bear markets permanently extinct. Yes, there will be occasional dips from time to time (see green tints), but these will swiftly be pushed aside by a new ascent. If a solid decade of evidence isn’t enough, I’m not sure what is.

(more…)

What’s Hot & What’s Not in US Markets

By -

Depicted on the following graphs are percentages gained/lost in Major Indices and Major Sectors over a longer term (1 year), a medium term (year-to-date), and a short term (the past week).

They are presented, simply, to illustrate where they are relative to those three timeframes.

My only comments are as follows:

  • Major Indices: Utilities, Small Caps and Transports continue to underperform, and I’d monitor Small Caps, in particular, as I outlined in yesterday’s article, for further signs of weakness and an indicator of further equity risk-off activity.
  • Major Sectors: Energy, Consumer Staples, Health Care and Utilities continue to underperform, but I’d keep an eye on Financials for any evidence of further weakening, as I recently described here.

(more…)

The Only Bearish Blog Left

By -

Slope, as you might suppose, is my favorite blog on the web. My second favorite, however, is ZeroHedge, and I’ve been an avid and daily reader for its entire existence.

Because ZH has been steadfastly bearish since its creation in January 2009 (which, interestingly, was pretty much the exact almost-to-the-day bottom of equities in general), the standard bromide out there is: “The bear market won’t start until ZeroHedge shuts down.”

Well, look, that’s NEVER going to happen. It’s far too successful a site. I obviously have no clue what their financials are, but they’ve got to be making hundreds of thousands of dollars a year (at least) on ad revenue, so they’re not just going to turn the switch off. (more…)

Sullen Sunday

By -

Given its insane movements, who knows where $BTC will be by the time you read this, but as I’m typing this on Saturday evening, the cryptocurrency has lost a full 25% of its value in the span of just a few days. I remain slack-jawed they are rolling out derivative trading instruments on this thing. I mean, look, I don’t have a dog in this fight, but what if $17,300 was the peak, and this thing just craps itself back down to $1,000? The hype will vanish.

slopechart_$BTC

(more…)