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.

Flying PI(I)GS (by cantabnomad)

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Contrary to their Northern brethren, Portugal, Italy, Ireland, Greece and Spain peaked in October 2009. What followed is now history, and it is widely claimed that Greek problems will be contained.

Below is a GDP-weighted composite index of stock markets of countries listed above. Combined, their GDP is 90% that of China (in nominal USD) – so this is no small fish. I present my favoured scenario in this daily chart. The declines so far have been impulsive; rallies corrective. Of further note is the fact that 55 and 85 day moving averages are falling, and the 55 day one is about to cross the 200 day one from above (bearish).

An alternative scenario for this funky group is presented below. While it is certainly possible that PI(I)GS will fly in what would be a massive "C" wave higher, I consider the outcome unlikely. This will change should we get closes above January 2010 levels, which would confirm the move since October 2009 as an ABC correction lower, pending further upside.

Originally published at http://observemarkets.blogspot.com/

Correction Is Likely Finished (by cantabnomad)

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How poor is the outlook for equities? Very, very poor. It is a disaster waiting to happen. While in the short-term marginal new highs are possible for most indices, in the medium-term risk and related assets are likely to face substantial difficulties moving higher, and will most likely move lower swiftly.

Below is a daily chart of the German DAX with my projections from 15 January 2010. So far, everything has been unfolding according to plan. If this continues to be the case, for which there is ample evidence, I believe we will see this index about 20% lower in the next 5 or so weeks.


This is an hourly chart of the Hang Seng Index in Hong Kong. It is currently trading at levels first achieved in August 2009 – fully eight months ago. As you can see, the index is firmly parked in a range (highlighted by the black box) that acted as support and resistance during those last eight months. From Elliott Wave perspective, the rally from February lows has been corrective and is very likely over at current levels. This index is putting in a massive, massive top.

This is an hourly chart shares of mainland Chinese large caps traded in Hong Kong (the H-shares index). This index (also shown on a daily time frame on the last chart in today's post) is weaker than the Hang Seng, currently trading below the price range, highlighted by the black box, that acted as support or resistance since August 2009. From Elliott Wave perspective, the rally from February lows has been corrective and is very likely over at current levels. This index is also putting in a massive, massive top. All this for the companies that cater to the market that will save the world in 2010???

H-shares index in Hong Kong is about to put in a "death cross" of 55 day moving average moving below the 200 day moving average for the first time since March 2008.

Originally published on http://observemarkets.blogspot.com/

Plane Crash and FXI

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It's sad to say, but one of my great pleasures in life is reading the comments on Slope. It's great to pick up ideas, learn new methods, and feel the "vibe" of the market via Slopers. My week-long ski vacation has made it impractical to read any comments, let alone be part of the stream. (This has led to moments of mayhem, I realize, such as when people decided to change their avatars to twisted versions of your bedraggled host).

I imagine that within comments people mentioned the plane crash in Palo Alto, which killed three Tesla executives (one of whom was piloting the plane) and shut down power to all 28,000 residents and businesses of my fair city. The pilot was actually a decade-long employee of Ideo before Telsla; Ideo has been the next-door neighbor of Prophet for many years.

It really goes to show you how fragile life can be. One day you're an executive for one of the coolest companies in America, about to get rich off a pending IPO, and in a split second, your life is over. It also reinforces my refusal to go on small planes (let alone doing so in fog). It's especially ironic that, had I been in Palo Alto, the epicenter of technology of the planet, I would have been out of commission for the entire day, whereas up here in the mountains, I've got reliable power and connectivity.

I remain entirely short, which means the run from February 7th to today has alternately either stunk or been neutral, depending on the day. Today is one of the more neutral days, although we're edging down a skosh. I'm heartened that FXI is shaping up as I had hoped, as it is one of my bigger shorts.

0218-fxi 

I want to once again fall to my knees and thank my guest writers for stepping up to the plate and creating content for the blog. This little corner of the Internet means a lot to me, and I want to keep it lively. Thank you, everyone.