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.
What Difference Will the Election Make?
There seems to be a common attitude among surviving bears (which appears, in total, to be me and a grubby fellow named Shotgun that hasn't bathed in a while) that Once The Election Is Past, The Fall Will Come. This is more of that "psychology of tomorrow" stuff I alluded to in my recent video.
I don't understand what difference the election will make. People seem to have an image in their minds of Shalom pressing down hard on a Push Markets Up button, and once next Tuesday is done, Obama will say, "Shew! Glad that's over with! Hey, Ben, you can take your finger off the button now!" Why would he? Why? Tell me that.
Now that the government has found the secret sauce to push assets higher, they're going to keep doing so until disaster strikes. It could be years before that happens. I think the election, QE2, and everything else will pass, and things are just going to keep going the same as they've been going for the past 19 months.
In case you haven't divined it, my frustration with the markets is at an all-time peak, so fade this attitude if you choose.
Not-For-As-Much-Profit Education
I did a post back on October 2nd about how tempting the for-profit education sector looked. This evening's announcement by APOL has sent the stock down over 12% after-hours, and similar stocks are falling in sympathy. I am happily short all of them.
In case you haven't been following the news, it turns out that these for-profit outfits, like University of Phoenix, Devry, and the like, are running into this kind of reality:
(1) Jethro Jobless is watching People's Court on TV, and he sees an ad for Devry which strongly suggests that a better "education" will improve his job prospects;
(2) Jethro undergoes the rigorous entrance examination – which consists of checking for a pulse – and secures federal loans to pay the exorbitant tuition (I read in the Times this weekend that one particular course runs $14,000, and an identical education could be had at a community college for under $500);
(3) Jethro gets his "degree" and enters the job market;
(4) Suppressing snickers at his diploma, hiring managers don't hire Jethro;
(5) J.J. is still unemployed – but now buried in student debt – so he blows off his student loans;
(6) You – the responsible taxpayer – have this debt added to the trillions already owed by the U.S., and J.J. resumes watching People's Court.
The Federal Government made noise about getting a little bit tough on the above, but since they have no backbone whatsoever, they delayed any concrete action until sometime next year (which means never).
These companies, however, are starting to get a little nervous, so they are getting more rigorous about enrollment (perhaps, besides a pulse, you also have to have an IQ greater than your shoe size). Thus enrollments – and profits – are dropping.
For once, I'm looking forward to the opening bell.
Precious Metals (by Springheel Jack)
I've been dusting off some longer term charts over the last few days, and while we wait see see whether silver can break above the upper trendline of the two year rising channel, I've been considering the next upside target if it does. I posted a possible continuation IHS on silver when it broke 20 and suggested 30 as a possible target. In addition to the IHS there is also the longer term resistance trendline on silver indicating to the same area. If we do see a break up I think we could see a fairly fast move to 30 but if so, it should find some formidable resistance there:
A lot of people don't like IHSs as continuation patterns but they do appear and play out every so often. My favorite example is the big IHS on gold that recently made target. If silver breaks up I would expect to see gold make my next upside target in the 1450 area:
Another long term chart that sprang to the eye was USDJPY where the all time low in 1995 at 79.7 is now within striking distance. A test looks more than likely from here now and would seem likely to coincide with USD hitting the multi-year support trendline at 75.75:
Short term I'm still looking for a swing high in this area, though I'm not seeing much to suggest that the pullback will be deep. My bullish EW chum Pug, who has been bearing up well under the burden of being constantly right about market direction for quite a while now, is also looking for a high here. He's looking for that in the current area or slightly higher at 1175. I'm looking at the post flash-crash high at 1173.57 SPX to provide some resistance and I'm seeing a very possible broadening top on ES where I'm thinking we may well see an upper trendline hit in the 1169 ES area today:
That broadening top on ES might also give us the next swing low on the lower trendline of course and I'll be looking for it there. Despite the name, broadening tops are not a bearish pattern as they break up as often as they break down, and I'm thinking that this one may well break upwards after the next retracement. Pug's looking at 1137 SPX and 1120 SPX as the most likely retracement targets and I'd add 1130 SPX to that for the retest of the IHS neckline. Anything lower than 1120 SPX and we might be seeing a much deeper break down, but I'm not expecting to see that happen.
Pug's wrapup post from last Friday is available for anyone to view here, and I would suggest that it is well worth a read.
As an aside some of you will have noticed that Alphahorn has closed his blog after getting some very snarky comments last week. Snark is always a problem on the blogs but I was particularly sorry to see this as Alphahorn is a superb analyst and has been eerily accurate on market direction in recent months. He was writing about a return to the 1170 SPX area in August as I recall, and that makes him one of very few who were. A serious loss to the blogosphere and yet another example of some bloggers making a virtue of bluntness at the expense of good manners. Sad.
