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.

Sitting on the Edge of the Precipice (by Closing Basis)

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Cast your eyes upon these charts showing triple EMA crossovers (5, 10, and 20) of the VIX when below 18 and try not to get joyfully misty-eyed.  Looking back to 2003, it has been fairly consistent, but should be confirmed by a support break on the index.

5% down is 1349
10% down is 1278

Interestingly enough, a few places in that range show a good possibility of putting in a floor.  Looking back, I see a lot of corrections cap out around 7-8%.  I think we've got very decent chances of seeing 1340 SPX.  If that fails, then 1300.

IF we can break 1370, that is…

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These Birds Don’t Flock Together (by Mark St. Cyr)

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These days, no matter where you get your information, you’ll hear metaphors and analogies thrown around with seemingly no concern how they’re really used in describing a given situation. It it sounds good, well then, it therefore must be appropriate.

Not so fast is what I have to say.

Analogies and metaphors help make the complex more understandable in most cases. They can be more than just helpful when trying to get a complex idea or give unknown variables some measure of light. However if used incorrectly by using the wrong one to describe a situation the results can be not only messy, but down right dangerous.

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Risk vs. Reward, AU-Style

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The broad market, supported by the glorified boiler rooms on Wall Street, the glorified infomercials in the mainstream financial media and the glorified monetary clerks at the Fed, operates to its own set of rules and cycles.  For instance, now we have conventional investors who used make cracks about their 401k's becoming 201k's actually becoming hopeful that they will regain all of their lost value.  The wonders of inflationary monetary policy has brought this prospect tantalizingly close to becoming reality.  Close, but…

Over in the gold sector however, where investment is actually a form of revolution (against inflationary fiat monetary systems), it is not so easy.  Investors simply must be mindful of the risk vs. reward setups at all times because the same forces arrayed in support of the stock market are lined up against the barbarous relic.  I am not saying this is a conspiratorial cabal, but I am saying that macro manipulation (like the recent 'reworking' of US Treasury yield curves) is just the way it is, whether it is planned out in the shadows to the most minute details, or just the result of embedded 'business as usual' academic myopia in a fiat system.

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Psychological Tipping Point

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0314-despairYesterday was an odd one here on the ol' blog. First off, I think the best way to keep a pulse on the psyche around here is via the comments section, but due to the demands of my schedule, I only get to read about 2-3% of the comments that are entered in the first place, so oftentimes I – of all people – am somewhat out of touch with the nuances of what's going on with people here (mercifully, seven straight years of blogging have created a self-sustaining community, so this is one of the few places where the blog's owner doesn't have to prod people into saying something!)

But, Slope being by and large a bearish blog, it's not surprising that its readers were in a funk (although, interesting, traffic grew about 25% versus the day prior). What struck me was a handful of people had decided to basically isolate themselves from blogs altogether, since I suppose they felt it was causing them a harmful bias.

I suppose I can see some logic in this. I hang out here and at ZeroHedge most of the time, so I understand that I can be subject to more than a fair bit of confirmation bias.

But I think there are a couple of flaws in putting one's head in the sand.

First off, we as traders know how convenient it is to blame an outside entity for our own problems. If you lost money, perhaps it was the fault of Ben Bernanke, or Goldman Sachs, or Brian Sacks, or some other sacks out there that I've forgotten. It's just as easy to blame a web site or a blog for your bias. So placing the responsibility for any bad trade on anything outside yourself is an error. This is not to say I am above such things; it's something I combat within myself all the time!

Second, I believe that there is much more benefit from the learning that goes on here than any detrimental effect of group-think. Indeed, there is a healthy number of very outspoken bulls that are perpetually on the comments board, and I think they do a very good job not only of offering excellent ideas but also tempering some of the tin-foil-hat nature that would be apt to running rampant were it not for their presence.

In short, I hope we see some of these lapsed Slopers return to the fold. Judging from some of the emails I got from people directly, as well as some of the comments, it seems a lot of folks "snapped" yesterday. Here's hoping they heal and return.