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.

These Birds Don’t Flock Together (by Mark St. Cyr)

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These days, no matter where you get your information, you’ll hear metaphors and analogies thrown around with seemingly no concern how they’re really used in describing a given situation. It it sounds good, well then, it therefore must be appropriate.

Not so fast is what I have to say.

Analogies and metaphors help make the complex more understandable in most cases. They can be more than just helpful when trying to get a complex idea or give unknown variables some measure of light. However if used incorrectly by using the wrong one to describe a situation the results can be not only messy, but down right dangerous.

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Inspiration from Rudy

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Well, I've probably raised a few eyebrows with my obsession with Broadway musicals, but now I'm going to up the ante and hold up Rudy Galindo, the men's figure-skating champion from 1996, as another model of human triumph.

This young man had endured horrible tragedy in his life. Having grown up in poverty, and barely able to make ends meet, he also lost his father and a brother within a year of the National championship, and his former pairs partner, Kristi Yamaguchi, had dumped him.

The 1996 tournament was pretty much his last chance to shine. At 26 years old, he was ancient by ice skating standards. He had taken third place after the shorts program, and as the final competitor in the longs program – – in his home-town arena – – the pressure couldn't have been more tremendous.

Watch the clip below and witness someone who takes an excruciating, risk-filled situation and turns it into something magical. Tears still well up every time I watch this clip. Maybe you can learn something about it that can inform your life as a trader, especially during difficult times.

Psychological Tipping Point

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0314-despairYesterday was an odd one here on the ol' blog. First off, I think the best way to keep a pulse on the psyche around here is via the comments section, but due to the demands of my schedule, I only get to read about 2-3% of the comments that are entered in the first place, so oftentimes I – of all people – am somewhat out of touch with the nuances of what's going on with people here (mercifully, seven straight years of blogging have created a self-sustaining community, so this is one of the few places where the blog's owner doesn't have to prod people into saying something!)

But, Slope being by and large a bearish blog, it's not surprising that its readers were in a funk (although, interesting, traffic grew about 25% versus the day prior). What struck me was a handful of people had decided to basically isolate themselves from blogs altogether, since I suppose they felt it was causing them a harmful bias.

I suppose I can see some logic in this. I hang out here and at ZeroHedge most of the time, so I understand that I can be subject to more than a fair bit of confirmation bias.

But I think there are a couple of flaws in putting one's head in the sand.

First off, we as traders know how convenient it is to blame an outside entity for our own problems. If you lost money, perhaps it was the fault of Ben Bernanke, or Goldman Sachs, or Brian Sacks, or some other sacks out there that I've forgotten. It's just as easy to blame a web site or a blog for your bias. So placing the responsibility for any bad trade on anything outside yourself is an error. This is not to say I am above such things; it's something I combat within myself all the time!

Second, I believe that there is much more benefit from the learning that goes on here than any detrimental effect of group-think. Indeed, there is a healthy number of very outspoken bulls that are perpetually on the comments board, and I think they do a very good job not only of offering excellent ideas but also tempering some of the tin-foil-hat nature that would be apt to running rampant were it not for their presence.

In short, I hope we see some of these lapsed Slopers return to the fold. Judging from some of the emails I got from people directly, as well as some of the comments, it seems a lot of folks "snapped" yesterday. Here's hoping they heal and return.

GATA Communication Received (by Gary Tanashian)

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[GATA, for those Slopers who may not already know stands for Gold Anti-Trust Action Commitee, AKA a Tin Foil Hat factory –GT]

I received something yesterday by way of a friend, from GATA, talking about "frustrated precious metals investors" and "bankster ambushes on the gold and silver markets".  The article talks about market participants' "sense of hopelessness" about change with regard to the "Western financial crime syndicate" and the "Empire of the Wall Street Vampires".

I then stopped reading.

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A Closer Look at the HUI vs. SPX

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Let's dial in the ratio of the HUI Gold Bugs index vs. the S&P 500 that we have been reviewing from a monthly 'big picture' perspective.  This weekly chart is also a big picture, but it adds the 250 week moving average and weekly MACD, along with its slower brother, TRIX, for more definition.

People should realize that while there is significant reason for fundamental optimism about quality companies within the gold stock sector this is, on a pound for pound basis, one of the most aggressively hyped stock sectors on the planet.  The same can be said for gold itself.

Why is this?  I believe it stems from a core and righteous belief by many gold bugs that things are not right with the system (thanks Captain Obvious :-)), gold should be money again (or at least it should anchor the paper of the modern realm) and it is simply a matter of time before destiny is achieved.

Gold, while in a predictable phase of under performance due to the Euro relief and US earnings and temporary 'jobs' pumps, has been beaten back from its impulsive highs during the acute phase of the Euro crisis.  Hype took gold up, and hype is taking it down or more accurately, is causing it to under perform what is now being hyped; namely the salvation of the system as we know it and the ever present tout of conventional stocks.

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