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.

HUI Gold Bugs Index – Big Picture Monthly View

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NFTRH175 took an extensive look at the HUI, ranging from a 15 minute (in-day, in-week) short-term management chart to a daily chart, a weekly chart and finally on out to the biggest – and most compelling of pictures – a this monthly chart.

The nearer time frames generally look okay, with some caveats; notably including the over bought, over loved state for the broad US market.  These time frames must be managed on an ongoing basis, but throughout all of the ups and downs, euphoria and agony, there is and has been the monthly chart and its Cup & Handle target of 1000, which has been active since 2010.

Here is an excerpt of the final segment of the precious metals analysis:

Time again for the HUI monthly chart with Cup & Handle and measured upside target.  To this point we have followed the ‘3 Snowmen (888)’ because I think it is a cute way to keep HUI’s huge upside potential on radar. But the target is actually more like 1000. If you are a gold stock bull – and please don’t take my word for it, NFTRH is just one publication with its own viewpoints, among many and disciplined research should consider many different angles – then you probably find this big picture compelling. You view the Handle consolidation (if that is indeed what this is) as an opportunity to be
positioned for that unknowable time in the future that it may break upward.

An easy way to look at this is to put a mental ‘STOP’ just below the confluence of the Handle, the moving averages and the visual shaded support area. So how about this for a range of perspective on the HUI? 15 minutes all the way up to monthly.

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One More Preparation Made (by Gary Tanashian)

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Since becoming concerned by the unnatural imbalances being placed upon the financial system in 2002 and becoming outright alarmed by 2004, I have done all I can do to get my house in order, so to speak.  This, as a normal citizen and business owner has included normal things like paying off debt and seeking out the safest cash vehicles (and for this I'll always thank Robert Prechter, no matter what criticism is launched his way from casino patrons), and some abnormal things like becoming a gold bug and a financial market writer.

Today, the requested change (to revoke margin 'privilege') has gone through on our brokerage account, which doubles as the NFTRH 'capital preservation' portfolio.  I mean, in the wake of MF Global and years of knowledge that the modern financial system is ultimately sitting on a foundation built of Balsa Wood and Duct Tape, who needs the convenience of margin anyway?  Routinely shorting the stock market is a fool's game anyway.  I'll use options or those inefficient short funds if I feel a need to hedge.  But this account is for 'preservation' after all, as it is balanced by actual things of value in real life, so going high cash and T bills – as it is now, along with a very few investments – is by far the preferred route.

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A Closer Look at the HUI vs. SPX

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Let's dial in the ratio of the HUI Gold Bugs index vs. the S&P 500 that we have been reviewing from a monthly 'big picture' perspective.  This weekly chart is also a big picture, but it adds the 250 week moving average and weekly MACD, along with its slower brother, TRIX, for more definition.

People should realize that while there is significant reason for fundamental optimism about quality companies within the gold stock sector this is, on a pound for pound basis, one of the most aggressively hyped stock sectors on the planet.  The same can be said for gold itself.

Why is this?  I believe it stems from a core and righteous belief by many gold bugs that things are not right with the system (thanks Captain Obvious :-)), gold should be money again (or at least it should anchor the paper of the modern realm) and it is simply a matter of time before destiny is achieved.

Gold, while in a predictable phase of under performance due to the Euro relief and US earnings and temporary 'jobs' pumps, has been beaten back from its impulsive highs during the acute phase of the Euro crisis.  Hype took gold up, and hype is taking it down or more accurately, is causing it to under perform what is now being hyped; namely the salvation of the system as we know it and the ever present tout of conventional stocks.

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Gold Stocks (NFTRH172 Excerpt)

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Gold Stocks

This is a snippet from NFTRH172 focusing on the writer's methods of viewing markets from a visual and psychological perspective.  I just want readers to continually think about herds and about what it takes to be able to get contrary these herds at the appropriate times.  NFTRH172 then proceeds on to actual intensive analysis of the precious metals sector and the macro market backdrop.

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Deflation or Just a Point on the Continuum?

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Excerpted from the January 15 edition of Notes From the Rabbit Hole, NFTRH170

From Bloomberg on Friday [13th]: “Stocks fell, trimming a weekly gain, while the euro and commodities slid after reports that several European nations will have credit ratings cut by Standard & Poor’s. U.S. Treasuries rose…”

This is the news of one failing major currency benefiting the exchange rate of another, along with the Treasury bonds it denominates. Deflation is not global hot money hysterically running from one intrinsically worthless currency to another any more than the 2005-2008 “death of the US dollar cult” represented hyperinflation.

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