I am a big movie buff (some of you may remember I’ve even written a screenplay – – so, umm, any movie producers out there, drop me a line). When I love a movie, I’ll watch it a dozen times or more. Here on Slope, we’ve had some lively discussions about great movies, but one of the classics I never got around to watching was The Shawshank Redemption, even though it is consistently near the top of any list of great films.
Today I watched it, and I enjoyed it. I now understand why people like it so much. However, I was struck by the similarities between the movie and one of my favorites from my childhood, Escape From Alcatraz, which came out about fifteen years before Shawshank.
In my 2017 Market Wrap-Up post, I referenced major support (200) and resistance (280) as levels worth monitoring on the SPX:VIX ratio, on a monthly timeframe.
The following updated monthly chart of the SPX:VIX ratio reveals a few interesting things:
- All of the monthly closes since July 2017 have been above 225.
- December ’17 and January ’18 have spiked above the 280 resistance level, but not yet held above.
- A long-term uptrend line (heavy blue arrow) indicates near-term support around 225, at the moment.
- 225 is confluent with a major external Fibonacci retracement level at 228, as well as the bottom of the original long-term uptrending (green) channel.
- In my post of February 24, 2017, I identified 200 as a new level to be held above, in order to support a new bull market in equities.
- In April, 2017 we started to see closes above 200 (the next monthly chart shows the SPX in the upper half and the monthly closes (in histogram format) of the SPX:VIX ratio in the lower half, for a different perspective).
- Monthly momentum on the SPX:VIX ratio began to weaken last November, which hasn’t supported the price breakout on the SPX above 2600.
I had an interesting question on my twitter that I answered this morning, and it was in response to my tweet at the open on Friday saying that both ES and NQ had formed clear bullish triangles and that I was expecting ATH retests on both. The question was from later in the day when the ATH retests had been done and both indices continued up in a trend day. The question was why the outlook had changed, and my reply this morning was to point out that I had tweeted that I was expecting the retests, but that I had never added that ES and NQ would reverse there. The outlook had not therefore changed. I had expanded on that in Friday’s intraday video before the main move up, but there’s only so much you can put into a tweet. What was interesting about the question is how people read beyond what is actually said. Something I see regularly. (more…)
I last wrote about WTIC Crude Oil on December 26, 2017.
The following monthly chart shows that /CL has since rallied to retest its bearish moving average Death Cross apex at $65.00 and is hovering above that price, as well as its 50-month moving average.
If $72.00 is, indeed, in the cards, as I described in the aforementioned post (or even higher to retest $75.00 price resistance), it’s very important for /CL to hold above $65.00, now major support. A drop and hold below could send it tumbling back to $55.00, or lower.
As I keep saying, if there is one theme for me in 2018, it is “bonds are screwed.” I’ve been harping on this to my beloved PLUS subscribers for a while. Finally I think we’ve got a situation that’ll bludgeon Yellen (although, wisely, she is in the happy opportunity of fleeing her post before the proverbial SHTF). Here’s where we are at: