Slope of Hope with Tim Knight

The Tightening Coil

I really lucked out today. At about 10:40 my time (1:40 EST), I decided to bail on my big index positions - three of them - $SPX, $RUT, and $NDX. The reason was partly technical - - - it looked like an intraday base was starting to form - - but also partly practical - - I had to get on the road, and I really didn't want to be stressing over my positions. So I sold all my big index positions where the arrow is pointing, and given the push higher that took place over the balance of the day, I'm glad I got out.

Not to say that I am not still wild-eyed bearish. I've got 88 put positions - - which must be something like a record for me - - across all variety of equity issues. I only dread the day when I decide to exit the market, because it's going to take a team of traders to dump me out of all this stuff. It's ridiculous.

I am optimistic about the upcoming week. I think we're in a tightening formation that is going to break to the downside (much like it did before, circled in red below).

I am only trading options these days, but for you short sellers out there, I wanted to offer a few charts I found intriguing as straight-up short plays.

Enjoy the long three-day weekend. I'll see you back here on Tuesday!

Naive Melody

Twenty-five Valentine Days ago, I showed up at the house of a girl with whom I was completely smitten. She is now Mrs. Bear, and since we started going out when we were both kids, I'm not as ancient as you might guess.

In any case, I'm going to be traveling for most of the day, so I'm going to go dark until tonight. I'm delighted with what the market's doing at the moment (Dow down 70 as of now), but I'll let my stops do their work the rest of the day. Until then, since Valentine's Day is behind us (and a very special one for me), I'll leave you with some Talking Heads lyrics that I think make a damned fine love song. See you tonight.........

Home is where I want to be
Pick me up and turn me round
I feel numb - born with a weak heart
I guess I must be having fun
The less we say about it the better
Make it up as we go along
Feet on the ground
Head in the sky
It's ok I know nothing's wrong . . nothing

Hi yo I got plenty of time
Hi yo you got light in your eyes
And you're standing here beside me
I love the passing of time
Never for money
Always for love
Cover up and say goodnight . . . say goodnight

Home - is where I want to be
But I guess I'm already there
I come home - she lifted up her wings
Guess that this must be the place
I can't tell one from another
Did I find you, or you find me?
There was a time Before we were born
If someone asks, this is where I'll be . . . where I'll be

Hi yo We drift in and out
Hi yo sing into my mouth
Out of all those kinds of people
You got a face with a view
I'm just an animal looking for a home
Share the same space for a minute or two
And you love me till my heart stops
Love me till I'm dead
Eyes that light up, eyes look through you
Cover up the blank spots
Hit me on the head Ah ooh

That Schwarzman Magic!

Advantage: Bears

We've got three advantages going into this final day of the week.

1. The latest economic indicators came out from the Empire State Manufacturing Index, and it nicked a pre-market that was already weak down another notch.
2. The rally that lasted from January 23 to February 12 was quick and powerful but, from a technical vantage point, changed nothing mid- or long-term.
3. We are closing out the week before a 3-day weekend (err, remember what happened during the last one of those?) So psychologically, fear is on our side (plus any index expiration manipulation is past us now).

Omaha Beach

Loss of Interest

I think it's exciting to observe that, given the "new market" that we here at Slope understand, Bernanke's pledge to drop interest rates does nothing positive for the bulls. Just a couple of months back, such a mention would have sent the market up 300 points in a few minutes.

As it is now, Ben's not only bald, but toothless.

Oh, also, I want to thank the bulls again for the huge run-up recently. It allowed for some superb entries.

No Fear

It's easy to be a bear when the market is plunging. It's easy to whoop it up during times like most of January 2008. But when the market is pushing up a couple hundred points a day, that's when it gets tough. It's tempting to run for cover and wrap yourself in a bullish coat.

I have not done so. The reason is simple: the charts tell me that, in a macro sense, we're in a bear market. And, looking at the index charts over the past year, it strikes me as virtually impossible that we would find ourselves in a bull market again anytime soon. So my positioning is based on that. Added to which, the "fear factor" has, for the umpteenth time, been squeezed out of the market, making options prices reasonable once more.

These index charts I offer with only one comment for all of them - - each of them, in there own way, expresses a surge upward which is nothing more than a small counter-trend in the midst of a very large downward moving that is just starting to unfold.

And my one last comment is for the Necco. Ever as a child, I thought your candies tasted horrible. And so it goes, from generation to generation.

ProphetCharts Videos

Sorry, there won't be any market commentary today. I've spent a huge amount of time putting together twenty-five short videos on using ProphetCharts. For those that use this product, I hope you find these useful. You can find these clips in the normal Slope video section here.

Saturday Morning

I'm neck deep in a project right now. Grab a bowl of sugary cereal, sit in front of your computer, and entertain yourself with the adventures of Stedman. Right now, I've got some work to do.

Hot or Not?

A day this bullish needs a little comic relief.