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.

This Isn’t 1995

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As most of you know, my home is in the heart of the Silicon Valley, and I am thus in the center of the current lunacy (last enjoyed back in 1999).

Since most residents in a ten mile radius of my house feel they are entitled by divine law to be multi-millionaires (if not billionaires) before they turn 30, they have to have in mind some kind of narrative that will lead them to their fortunes. The current one goes like this:

(a) LinkedIn's IPO was analogous to the Netscape IPO in 1995;

(b) Since the Valley is crammed with real companies that have real products and real revenues, they will all be going to the public markets real soon;

(c) The timespan 1995-1999 will be re-deployed as 2011-2015. This year will include Pandora, Groupon, Zynga, and then the big Kahuna……..

(d) Facebook! Then the entire world will be going mad for tech IPOs, which, gosh darn it, aren't in a bubble - honest!;

(e) By the time 2015 rolls around, we'll all be Much Wiser than the poor saps in 1999 and will cash in at the peak (NASDAQ 7500, I'd guess)

The reality will be much simpler:

(a) LinkedIn will analogous to TheGlobe and is already down nearly 50% from its first day's high;

(b) Pandora, Groupon, and Zynga will indeed go public (or have already done so), and they'll all be in single digits by next year. Some of the most watched IPOs this year and next will be delisted by 2013;

(c) Facebook will indeed come out, and fall instantly, and the most ferocious bear market of the past century can finally begin in earnest. The lawsuits and recriminations will begin, and drinking it all in will be the most fun you can have with your clothes on. I'll bring the popcorn.

In the meantime, keeping smoking that Silicon Valley weed, my friends and neighbors. Slope of Hope is going to be where it's at. I've got two turntables and a microphone.

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0617-p
0617-renn

Having said all that, companies like LinkedIn and Facebook will obviously still be around – – just like Yahoo is – – but will have found their true value in the public markets. There is no doubt that web sites like these are permanently popular, but a few of this organizations are doing to realize that Going Public Sucks, and even though they couldn't imagine it, they'll really regret it in the end.

Fool’s Fractal

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Notice anything similar about these two charts?

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0615-lnkd

Just about identical, right?

Well, one of them is LinkedIn (LNKD), which went public a month ago. The other is Pandora (P), which went public just hours ago. So one of the charts is made up of a month's worth of data and the other is just a few hours' worth.

Yet they both appear just about identical – – suckers buying at the top on IPO day and then just getting hammered.

People never learn. Ever.

I can't wait until Facebook finally comes out with its IPO and we can start a sustained, devastating, worldwide bear market with cataclysmic consequences for all the global economic powers. It's going to be like nonstop sex with an all-you-can-eat buffet. Then life will finally be worth living.

Dusting Off An Old Context Model

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Back in February we published a context model shortly after ES made new highs.  The good Dr. Knight kept playing the Chocolate Rain video and sure enough, the market tanked shortly thereafter.  Let's see if we can get this to work again.

It's time to dust this puppy off and see where we are.  The break above prior ES highs at 1343 makes us wonder just how far the S&Ps can go with QE2 and the debt ceiling.  Back then, we declared ES 1310s as our line in the sand, which was crossed and broken several times before hitting new highs.  Believe it or not, they shall remain our LIS.  A break below 1326s can serve as a potential early warning signal.  Upside targets remain in the 1445-1450 zone.

ES Context Model Circa February 18, 2011
Originally published on www.tradeflight.com

ES

We keep an eye on ES, but our primary trading vehicle continues to be volatile, liquid, light, sweet crude.  As an aside for those interested, we are planning an upcoming gratis educational series on how to trade CL by asking only 4 key questions each day.  The questions, and the answers, may surprise you – they are a combo of herd psychology and price levels deemed important by professional money.  All those interested, say ay.

A Fresh Look at the Analog

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It's been a long time since I've taken a look at my 1937-1942 analog. Part of the reason is that the big POMO push seemed to have made the analog to longer relevant. I'm not entirely convinced.

For what it's worth, here is a view of the 1937-1942 market, with colored markers showing various turning points.

0312-past

Here, for contrast, is the 2007-present market with similar markers. Note that the y-axis is scaled differently, so they don't line up, but by following the colored markers, you should get a sense as to what I'm suggesting.

0312-present