Slope Of Hope with Tim Knight

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:

A Bullish Love Affair (by Ryan Mallory)

To best depict what we are currently experiencing in today's market, with the bullish euphoria that exists, the belief that European woes have passed, and that somehow it's different this time, let me point you to the movie clip below that comes from "Meet Joe Black". Here you have Good 'ole Joe and his lovely lady friend, being swept away by one another in a coffee shop. But like the market bulls, both parties are completely oblivious to what lies around the corner...

Is it any surprise that Mr. Market, Joe comes back as death himself?

All kidding aside, let me point you to the chart below, which is the basis for my belief showing extreme long-term resistance at today's highs. Notice that this is a five-year chart of the S&P and we are at a resistance level that in years past has been met with extreme selling.

Now, if we can break this level, which I am very skeptical that we will, then there is legitimate reason to believe we would be entering a new bull phase, but considering how overbought we are, how all reversal indicators point to a down turn in this market, I'm confident that we move lower from here, and that we have seen the market's highs already put in. 

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David Einhorn Captures Europe Beautifully

Apple Investors Have Jumped the Shark

OK, if there ever was a sign to short the living daylights out of AAPL, this is it:

An entire conference has been put together (which you can attend for $395) whose sole purpose is to talk about trading AAPL. Featuring Dancing-with-the-Stars celebrity Steve Wozniak, who will spin old yarns about his experience in the 1970s when he actually worked there.

Stick a fork in it, folks. We have reached complete cultural saturation. I'll say what no one else will dare say: not only will AAPL not reach the trillion-dollar market cap which seems to be a universal given, but it will lose half its value within the next three years.

This "summit" is just about the dumbest thing I've ever seen since the late-90s bubble. And I say this as a former Apple employee, 1984-Macintosh buyer, first-day iPhone buyer, first-day iPad buyer, and all-around Steve Jobs worshipper.

Danger, Will Robinson (by BKudlaQA)

I will let these three set of charts speak for themselves.  I already have sell signals on SPY, Risk and SLW.  This market is flat topping to boot.  Per my cycle guy @polytrade on Twitter we are due for a pullback, as well.  Enjoy and follow the actionable signals.  Hat tip to Mcclellan Oscillators, Kitco, and Market Montage respectively.

 

 

Market Lessons (Re)Learned in 2011 (by Market Sniper)

In this last day of reflection prior to the resumption of trading tomorrow, I thought I would share this with you. Here are the top lessons the market handed out to us in the year just passed. Most are old lessons that just need to be reinforced. In the heat of the "battle" some are difficult to keep foremost in our thinking.

Lesson #1: Price patterns work.

I, personally, have difficulty trading classical chart patterns as I note they tend to fail to deliver the next technical expectation as often as they deliver. That being said, there is no denying that, for the broad markets in 2011, they did deliver on two notable occasions. 1) The summer of 2011 with the head and shoulders off the May high and 2) The double bottom off the August and October lows. One of my personal goals this year is to attempt to do better in this area. To that end, I will be using Tim Knight's and Tom Bulkowski's works predominately. 

Au Ready?

Held captive by the low volume holiday week, gold sector investors look as if they will get dunked again upon the US market open today.  There are a few different potential scenarios in play with regard to the gold stocks, but gold itself has been pretty clear since the momentum-fueled 'channel buster up' last summer.

The Bulls Have Nothing to Fear.........Do They?

A Wise Sloper Writes

Prompted by my post about my worst trading day ever a year ago, one Slope of Hope reader wrote to me the email below. I found it thoughtful and helpful, and the writer gave his kind permission to publish it here. Thank you.

I enjoy reading your commentaries. More importantly, I admire your commercial success. To begin, expand, and ultimately sell a business reflects enormous skill and talent. And a willingness to take chances at every step.

I am a semi-retired Wall St. pro. With a 40 year history of retail broker, analyst, institutional desk manager, etc. I am most proud of the fact that I left the street financially and intellectually intact. And still earn my living today as a trader. For myself.

Having set the table, here is my observation: I read your post regarding last year being the worst day of your trading life. With follow on comment(s) about Bernanke this and that. All well and fine, except for one thing. Something I learned a long time ago: January 1980 to be precise. I had a client, a brilliant economist, writer, analyst. Who was long gold. Very long. For all the "right" reasons (yeah, you know: the weakening dollar, trade deficit, blah, blah). And when the market started to sell off, he did not budge. You see, he was long gold for all the "right" reasons. He had acted precisely as his strategy dictated.

Problem was, Gold did not care. It continued to go down, and my client was sold out (actually, he was taken away from me. In the old day's, you were not allowed to keep clients who were in margin trouble).

Anyway, know what I learned? It was my first - and best- lesson ever: When it comes to trading, there is no right or wrong. Only profit and loss. You want to maximize the former, and minimize the latter. Rest of the time, enjoy your family and friends. If you want to play at being right and wrong, become a contestant on a game show.

You are a very clever analyst, and a far cleverer (is that a word?) observer of market dynamics. I am not saying anything you don't instinctively understand. Merely commenting on what the market taught me. Repeatedly over many years, as with a 2 x 4 over the forehead. But that first lesson stood me in good graces with the trading god's.

Whatever is said this week, by whoever says it, the market will react. It always does. Our duty is to spot the opportunity, and profit from it. Not debate it.

I hope you accept this letter in the spirit it was written. I greatly admire what you have achieved. But I do have a few years head start over you in trading.

Marc Top-Ticks the Market. Bubble? Nawwwwww........

From the New York Times a month ago. The guy looks like a bit of a pinhead in retrospect.