Slope Of Hope with Tim Knight

Happy Valentine's Day, Slopers!

Apple at $1000/share? Oh, at LEAST!

Most of you have probably already seen the bullgasm happening over at Barron's. Here's their cover for the week:

Jealousy, Perspective, and Peace

I am a middle-aged man, but in the years I have lived, I have at least amassed enough wisdom to know intuitively that I am still naive. We're always learning and, hopefully, getting wiser, so in an absolute sense, I'll die a naive man.

But I'm not as dim as I was as a teenaged-Tim, so allow me to start this essay with a couple of background facts.

Euro Chicken Scratch

As a companion to my posting yesterday of the GDX chicken-scratch, here's another poultry-created masterpiece: a trio of Euro drawings with my best attempt at marking the "matched" points of this analog. The charts speak for themselves. Whether or not this pans out a third time remains to be seen. So far, so good, though.....

Tim's Chicken Scratch Returns

Even occasional readers are acquainted with my near-obsession over the gold miners ETF symbol GDX. I have been closely following an analog I discovered for GDX, and last week I printed it out, took pencil in hand, and clumsily scratched out what seems to be the turning points of the analog.

Below is the 2007-2008 timeframe. Please note these letters have no special meaning, except to order and identify the turning points. For the love of God, don't mistake this for some kind of attempt at Elliott Wave (cough, cough).

Inspiration from Admiral Stockdale

If you're like most Americans, you hadn't heard of James Stockdale until he showed up for the 1992 Vice Presidential debates and made this famous line:

Afterwards, he became the butt of jokes and was basically portrayed as a dottering old man. He and Ross Perot captured nearly 20% of the vote, in spite of being a third party ticket, and the nation soon stopped talking about Admiral Stockdale.

I hadn't thought of him for years, but last night I happened to trip across an article about the man, and I was amazed. He suffered through unspeakable horrors as a prisoner of war and, in all that time, he showed strength, resolve, and character that I imagine 99.9999% of the population lack. The guy had brass balls, pure and simple, and he was awarded the Medal of Honor for his courage.

Read on:

Stockdale was held as a prisoner of war in the Hoa Lo prison for the next seven years. Locked in leg irons in a bath stall, he was routinely tortured and beaten. When told by his captors that he was to be paraded in public, Stockdale slit his scalp with a razor to purposely disfigure himself so that his captors could not use him as propaganda. When they covered his head with a hat, he beat himself with a stool until his face was swollen beyond recognition. When Stockdale was discovered with information that could implicate his friends' "black activities", he slit his wrists so they could not torture him into confession.

One can only imagine fellow VP-debate-participant Dan Quayle's behavior in such a circumstance. Once they mussed his hair, it would probably be all over. To continue:

Stockdale was part of a group of about eleven prisoners known as the "Alcatraz Gang": George Thomas Coker, George McKnight, Jeremiah Denton, Harry Jenkins, Sam Johnson, James Mulligan, Howard Rutledge, Robert Shumaker, Ronald Storz and Nels Tanner; which was separated from other captives and placed in solitary confinement for their leadership in resisting their captors. "Alcatraz" was a special facility in a courtyard behind the North Vietnamese Ministry of National Defense, located about one mile away from Hoa Lo Prison. In Alcatraz, each of the eleven men were kept in solitary confinement in cells measuring 3 feet by 9 feet with a light bulb which was kept on around the clock. The men were locked in leg irons each night

What amazed me the most is what Stockdale said in reflection:

"I never lost faith in the end of the story, I never doubted not only that I would get out, but also that I would prevail in the end and turn the experience into the defining event of my life, which, in retrospect, I would not trade."

Now here's the important part......when asked about who died during captivity, he replied:

"Oh, that's easy, the optimists. Oh, they were the ones who said, 'We're going to be out by Christmas.' And Christmas would come, and Christmas would go. Then they'd say, 'We're going to be out by Easter.' And Easter would come, and Easter would go. And then Thanksgiving, and then it would be Christmas again. And they died of a broken heart."

And then, finally, the most important part of all, which you might want to read ten times to yourself:

"This is a very important lesson. You must never confuse faith that you will prevail in the end—which you can never afford to lose—with the discipline to confront the most brutal facts of your current reality, whatever they might be."

I hope the departed Admiral will forgive me for using his words as an inspiration for traders - - or anyone undergoing a challenge - - but these are some of the most inspiring words I've ever read.

Thank you, Admiral Stockdale, for everything you did. I promise that those old jokes tossed around in the 1990s about you are no longer funny anymore. You were a great man.

Oh, and just to add icing to the cake. His name was James Bond Stockdale.

What a bad-ass.

An Interesting Spreadsheet

In prior posts, I've mentioned the interesting comparison of the $HUI gold index between 2006-2008 and the past couple of years. Below is the grid chart showing the past behavior on top and the recent behavior on the bottom. The analog speaks for itself.

Instead of just eyeballing the charts, I entered the dates into a spreadsheet of the difference in time between the major turning points. The length of time is quite similar, although the present instance is just a little shorter (95.5% of the length) that the prior one.

The interesting thing is calculating what this adjusted delta yields in terms of a "start date" for a breakdown in the pattern. The date turns out to be January 21st (a Saturday, but hey, it's just an estimate).

Can we count on some kind of hard fall starting then? Of course not. But at least it pinpoints a day for this analog to see if some kind of breakdown does indeed occur around then.

Who Do I Think I Am?

This year will be the 8th year I’ve been writing this blog. I never imagined when I started writing what would become Slope of Hope in 2005 that I would have this many readers and that the blog would be such a big part of my life, but I have been feeling the urge to tell people just who you are dealing with, since this blog is still very much a personal expression.

You are going to find a lot of dichotomy and contradiction in this post, because that’s what I’m like. I spend half my days wishing someone would sneak up behind me and shoot me in the head, and the other half of my days feeling just OK. I'm never really happy - - - it’s been years since I’ve been anything close to that - - - but at part of my life I can spend not wishing to be wiped away.

The darkness of my mindset is pervasive; I have written countless private notes to myself to try to sort out my feelings; one snippet reads like this:

• No good deed goes unpunished. So hang on to everything you’ve got. Giving always backfires.

• Most of “success” is dumb luck – being in the right place at the right time. Lots of good, smart people don’t get shit, and lots of mindless, stupid people make fortunes.

• The way you live and what you get aren’t correlated. Evil, obnoxious people can get all they want, and decent, hard-working people can live with deprivation.

• The human desire to consume useless shit is almost insatiable, since most people are devoid of any real soul or understanding.

I sound like a barrel of laughs, don’t I? But I have to be honest with you. I can feel very bitter at times, and if nothing else, I owe my readers some honesty.

Real Fakeness and the Hanging Man

Those of you who have read my work for a while know that I have a paradoxical attitude which is not unique among Slopers; that is: loving America and really disliking Americans. Or at least disliking a lot of what constitutes American culture.

I came face to face with this not long ago when I did something I hardly ever do, which is fire up the television (ever since the series 24 went off the air, there's really nothing in particular I watch, although I dutifully pay my cable bill month after month). The show that was on was The Real Housewives of Beverly Hills.

The Analog Unfolds Gloriously

Way back on September 7th, a Sloper by the screen name of Phantom Capital thoughtfully sent me an analog, richly detailed, as to what he believed the market would do. I published this analog on the blog, and since that time, it has performed astonishingly well.

I have been exchanging emails with Phantom, and he and I see eye-to-eye on the market's future. I submit to you my belief that:

(a) we will indeed see a "from 13 to 14" drop, irrespective of what that traitorous douchebag Bernanke says tomorrow;

(b) once we approach 1000 (let's call it 1030 or so), The Powers That Be will issue forth their final, desperate attempt to save the world. Everyone will buy into it again, lifting the market somewhat. Because, Slopers notwithstanding, people are pinheads and always think it's different this time;

(c) Around March or so next year, TPTB will have lifted the market high enough to permit Facebook to IPO. This will be the last major IPO for a long time to come. The Facebook IPO, in my opinion, will almost pinpoint the top of 2012.

(d) After that point, all holy hell will break loose, and Slope will ascend to heaven in a blaze of chart-filled glory amidst wailing and gnashing of teeth. Yea, verily so.

And that's all I've got to say about that.