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.

Peering Over The Cliff (by Springheel Jack)

By -

I was writing a few weeks ago that it was all too easy to see a situation where the fiscal cliff was allowed to happen. The republicans could avoid agreeing to politically difficult tax rises, the democrats could blame the republicans for being too inflexible to compromise. An agreement early in the New Year could mitigate the effects with spending and tax cuts that eliminated most of the cliff and those tax cuts would henceforth be known as the Obama tax cuts. 

Over the last couple of weeks it seemed that nonetheless an agreement was likely, but this wasn't the case, as it seems that Boehner couldn't muster the votes yesterday for an agreement that included any tax increases at all. It seems equally unlikely that the democrats and Obama would allow any agreement that doesn't include tax increases, so it seems likely now that the fiscal cliff will be allowed to happen, and that negotiations in early 2013 will be about what will replace the fiscal cliff agreement. 

What does this mean for markets? A lot of uncertainty over the next couple of months, and it seems doubtful that the bullish looking setups here will survive that, but we'll see. (Editor's Note: I sure hope not).

(more…)

Q: What’s Wrong With Gold?!?!

By -

A:  Nothing.  It’s what’s wrong with peoples’ expectations and perceptions that is the problem.

Once again I’ll quote NFTRH 208 from October 14 (that edition and a sample interim update can be reviewed here:  Samples), not to be an ‘I told you so’
wise guy (I didn’t definitively tell anybody anything), but rather to
highlight how important sentiment is to this sector and also I suppose
to toot the horn a little with respect to good risk management.

“Sentiment is over bullish in the precious metals. 
Public opinion is over bullish, Hulbert’s HGNSI is over bullish and the
CoT data show that the little and big speculators are over bullish. 
This should be cleared out before we renew our bullish enthusiasm on a
risk vs. reward basis.  Broad stock sentiment is in a better state than
in the precious metals.  It is mostly neutral.”

The over bullish sentiment in the precious metals has been ground
down to a current state of numbness at best, and full out despair at
worst.  Actually, it is the reverse; a state of despair is best for a
contrarian opportunist.

(more…)

Breaking Up (by Springheel Jack)

By -

This has been a very impulsive move up from the low last Friday. Statistically yesterday should have been a retracement or consolidation day but instead we saw a strong move up and SPX punched through the daily upper bollinger band and closed well above it. So where does that leave us this morning?

These strong punches above the daily bollinger band are relatively rare, but they still happen fairly regularly. Since July 2011 there have been five previous instances where this happened as I have marked on the chart below. Of these five , three were close to significant highs but not one was immediately followed by a retracement of any significance. Three saw flat closes the next day with the other two closing significantly in the green. Historically there is therefore no reason to think that we saw any kind of significant high yesterday. Here's how that looks on the SPX daily chart:

(more…)

Kook Fury

By -

Our precious metals friends must be quite frustrated (I learned quickly with my posts at ZeroHedge to never question their religion; kooks are a passionate bunch). In any case, if there is any time that precious metals should be zooming to heaven, it is now. The US dollar is becoming a steaming pile of poo; trillions of dollars of new fiat money are pledged; the United States can't get its fiscal act together. Gold should be $2,500 per ounce by now.

But……..it's dropping. In fact, except for bonds, precious metals are just about the only thing dropping. The yawning divergence between the Euro and gold is breathtaking:

1218-kook

Short Term Weakness (by Springheel Jack)

By -

The main charts I am watching at the moment are the NDX and NQ charts, to see whether and when the fully formed IHS there breaks the 2700 area neckline to confirm the bullish scenario from there. We didn't see that yesterday on FOMC and Bernanke's press conference, but then he had little new to say, as the talk of QE being open ended until a significant reduction in unemployment has been seen sounded similar to what he was saying in September. Here is the setup on the NDX 60min chart where resistance is in the 2700 area, first support is at broken resistance in the 2660 area, and key support is at 2623, as a move lower than that would trigger a double-top target in the 2550 area:

(more…)