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.

A Very Long Week Later

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I sure feel a lot more calm right now than I did precisely one week ago. Last Thursday morning, of course, was the pre-CPI heart palpitations, and we were all facing an important fork in the road. Would the CPI be weak, sending the market ripping higher? Or would it be hot, sending the market on its way toward the direction of my 3200 target? As it turns out, it was the worst possible combination, which was white-hot inflation, sending bear hopes soaring, only to see the market move higher in what must be one of the most disappointing days of my entire life.

This morning, in sharp contrast, is no white knuckle moment. I’m heavily short, yes, but I’m very satisfied with my positions, and there’s no looming binary event. After a nice tumble yesterday, equity futures have just meandered all night long, going absolutely nowhere.

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Range-Locked

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Netflix isn’t going to save you.

Over the past few trading days, the entire investing world has flipped completely bullish, so much so that even my beloved Slope has become infested with its own version of yellow jackets, which are the $0-paying freeloaders who declare that the bear market is dead and it’s going to be straight up, at the very least, through the end of the year. These people, to me, are as complicit as the criminals they got us here in the first place. They are Fed cheerleaders, and it’s clear to me just how few true bears there are here. Probably something like five, grand total. So it isn’t just me. There are four others. Tops.

Given the NFLX, ISRG, and UAL fodder these closet permabulls were given last night, I’m sure they were expecting the /ES to be up another triple digits this morning, but things seem to be sputtering already. “Up through end of December” my ass.

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Surveying the Scene

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I’m an early riser, but I’m still on North Carolina time, so today I’m a super-early riser, so I might as well compose a post.

As you might guess, I feed myself a nice, healthy diet of confirmation bias in the form of various websites. Some sites, like CNBC, are naturally cheerleading the bulls nonstop, whereas the sites I tend to read, like ZeroHedge and Elliott Wave International, used to be more of the perma-bear stripe. Even those latter sites, however, have jumped fully on the bull wagon of late, with ZeroHedge in particular hawking 4100 as the S&P’s destiny.

I’m a dumb old bear, but I’m not a financial masochist, so I don’t just put my hands on my hips and take the abuse, which is why I raised cash early yesterday to about 25% of my account. I endeavor, however, to only eliminate positions that seem particularly vulnerable or whose patterns have failed. I do not think, not for one second, that 3500 was THE bottom for this bear market, and I am content to keep my bearish positions in place even in the face of a temporarily hostile environment and wait for yet another idiotic rally to blow over.

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No Such Thing As A Sure Thing

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On Friday morning I was writing that SPX went back onto my Three Day Rule on the break back over the 5dma at the close on Thursday night. Under that rule, if either of the next two closes delivers a clear break back below the 5dma, then the prior low, in this case 3491.58, will be retested before the prior high, in this case 3806.91. There was a clear close back below the 5dma on Friday, so that is a fix on the rule.

Now this is the most impressive performing market stat that I have ever seen anywhere about anything. There have been nine previous fixes so far in 2022, all of which made target and I’d estimate somewhere in the region of 100 – 200 fixes since the start of 2007, which is as far back as I looked when I first investigated this in 2011/2. With a minor rule fix in 2019 requiring a clear close below the 5dma for a fix, every one of those has made target barring a couple of very near misses when a triangle has been forming at the low.

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The Scales of Justice

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The insane ping-pong of this market continues on, and it’s getting really tiresome. The reason for this morning’s strength? Liz Truss this. British Gilt that. Apparently the Charles Dickens economy has taken complete hold of all global markets, and the making-it-up-as-we-go-along government in the UK keeps toggling whether markets are roaring higher or plunging lower.

Because of all this recent volatility, it really screws up intraday charts. If you look at this minute bar chart, the insane action on Friday makes this morning look like a pancake.

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