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.

Distant Voices, Altered Lives

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“What was I like when I was little?”

I knew the answer to the question already. After all, I had asked it plenty of times before, and the response was comfortingly consistent.

“Oh, you were a gentle baby.”

As a child, I found great reassurance knowing that even during the phase of life that infantile amnesia prevented me from remembering, I was a gentle person. I’m not sure why it was so important, but all my life I have embraced gentleness as a crucial part of my identity, and I wanted to know from my mother that I had always been sweet-natured. I wished it for myself, and for her. (more…)

On Sale, Huh?

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There’s a precious metals dealer in my town that has, in recent years, been paying for very big ads in the local paper. Until recently, their headline read “Record gold prices? It is only the beginning!”

For obvious reasons, they’ve moved away from that headline, since it stopped being true, oh, about two freaking years ago. Now they’ve got a much smaller ad with a much different headline:

0430-mish (more…)

Emotional Indicators

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As traders we are told to check our emotions at the door and just trade what we see.  The faster we conquer fear, greed, and all the other destructive emotions that befall our fragile human condition the better traders we will be.  And normally I fully agree with that sentiment.  However, there are the very rare instances where emotion is the best indicator above all other market signals.

I’d like to tell a personal story.  Two years ago to the month I went to war with silver.  I had been watching silver go up EVERY SINGLE DAY and it was driving me nuts.  To make matters worse my neighbor at the time ran a precious metal business and was borderline unbearable as shiny things marched higher and higher.  The concept of precious metals ever going down again was unfathomable.  I nibbled short and got hit several times.  Come the end of April 2011, I was absolutely FURIOUS with the silver market.  Shorting silver now became personal on many levels.  I remember very few specific trading days of my career but I vividly remember April 29th, 2011.

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A Contrarian Stroll Through Recent History

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Opening disclaimer:  I am not trotting out the past to show what a
great contrarian I am.  Truth is, I have not come close to fully taking
advantage of the bull calls last spring and summer.  Given what has gone
on in the precious metals, it has been all I could do to manage risk to
a break even.

That out of the way, this article was posted last May when it was very hard to be a bull:

Dumb Money Sold in May and Went Away

“Led by near suicidal
sentiment among the gold ‘community’, the broad markets recently
embarked on a southerly course as well, culminating with ‘dumb money’
sentiment at very bearish levels in technology, energy, financials,
industrials and on out to commodities.  The last time sentiment was in
such a compelling (contrarian) bullish structure was after the damage
inflicted upon markets by last summer’s acute phase of the euro crisis.”

Flipping the above on its head today…

Led by near pervasive and still-growing
bullish sentiment, the broad market is continuing upward on its course
and is culminating with ‘dumb money’ sentiment and momentum being set to
over bullish levels.  The last time there was such consensus on the
economy and the stock market may well have been in 2000.

“Think about the
election year pattern, think about how wildly bearish sentiment has
become, think about the market’s need to shake out the dumb money prior
to rising and most of all think about how policy makers need to be
perceived as doers of good; as part of a solution, as opposed to chronic
purveyors of an inflationary regime that has been in force most
intensely since 2000.”

Policy makers are not only thought of as part of the solution, they
are revered far and wide in a reverential and growing rabid manner. 
This is the ultimate bull rationalization and it is the underpinning of
confidence (great word) in today’s market.

In July this was written:

Dumb Money Sold in May?

“There are still articles showing up in the MSM
talking about what a good idea it was to ‘sell in May and go away’. 
But the truth of the S&P 500 chart begs to differ.  Yes, it has been
a nerve wracking couple of months, but as of Friday the SPX is above
where all but the most astute of the ‘sell in May’ contingent got out.”

There are now articles showing up in the MSM talking about the Great
Rotation, the Dow’s all-time highs and a new era for the US economy,
which has weathered the Euro crisis and myriad domestic issues as it
continues to strengthen.  All the talk of inflationary policy makers has
gone the way of Goldilocks.

“I do not love this market
by any means.  But I am still long (and profitable) several positions
that were bought down near the lows (Lithium, Rare Earths, a tactical
global fund, a global bond fund) and others in technology and energy
added since.”

Well do you remember how hard it was to be bullish last summer?  Now it is easy to be bullish.  Too damned easy.

“Last week as SPX tested
but did not fail support at the EMA 200, I held, white knuckles and
all.  This market may yet prove that the dumb money sold in May;
especially if the rally ends up going on long enough to drag them back
in again before any coming change to bearish again.”

The dumb money is holding without a care in the world.  

Another post from August:

“Dumb Money Sold in May and Went Away”

“But even if the market
tanks tomorrow and stays tanked, the dumb money sold in May.  Sentiment
structures said so then and ‘price’ says so now.  The big question is
whether or not the dumb money will buy back in setting up the opposite
scenario to May.”

One opposite scenario, comin’ up?  [edit] No comment on timing, see new post.

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