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.

The Stock Market Is Not Looking Healthy

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Back in the 1930s, an accountant named Ralph Nelson Elliott discovered that financial markets are fractal in nature. This means that they are variably self-similar at different degrees of trend.

To that end, he explained that when a market is trending, it will most often display a rather predictable 5-wave structure. As an example, this structure is what allowed us to predict the rally from the 1800 region on the S&P 500 (SPX) to over 2600 back in 2016, along with our expectation for a “global melt-up,” which we reiterated at election time “no matter who won.” It is what also allowed us to predict the bottoming to the bond market in late 2018, wherein we bought TLT in the 112-113 region, as well as the rally in metals in 2019.

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Can The Metals Break Out Again?

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Originally published on Sat Aug 24 for members of ElliottWaveTrader.net: Personally, I love trading metals and have been doing so for quite some time. In fact, the best trade of my entire career was in silver many years ago.

But, the one thing that we commonly see in the complex is that when the market strikes a top, it most often spikes into and then strongly reverses at that top as a culmination signal. Thus far, I have not seen that in the metals.

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The Top Is In, But What Top Is It?

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The Fed gave us exactly what the market expected in a .25% rate cut, and even gave us a “gift” with the early cessation of Quantitative Tightening. Normally, most would view this as a bullish catalyst. However, with market sentiment topping out in a bullish extreme, market participants interpreted the Fed action as bearish (despite its positive substance), and the market sold off this past week.

Based upon my analysis, we now have a top in place, as I have been warning to expect. The question is what will that top represent?

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Will The Fed Awaken The Bears Again?

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With the market at all-time highs, we are now approaching another Fed meeting. But, this one will likely provide us with a change in direction for rates, if you believe what most pundits are saying. In fact, there seems to be 100% certainty that the Fed will lower rates. Imagine that . . . the Fed is going to lower rates when the market is at its all-time highs. When was the last time this happened?

While many view a rate cut as being akin to the Fed “blessing” this market rally, history tells us a different story. What is most interesting is that the last time the Fed changed direction in rates near all-time highs was in 2007. And, when the Fed began to lower rates in 2007, it was just before the major stock market melt-down. 

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My Biggest ‘Fear’ For Silver

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While we were prepared for last week’s run in silver in our service on ElliottWaveTrader.net, many are only now suggesting to buy into the metals after missing the last 10%+ move up in silver. Yes, that is what happens so often in financial markets. Markets go higher and people want to buy more the higher it goes. Yet I was getting a lot of pushback when I was suggesting people use price levels below 15 to accumulate silver holdings.

What strikes me as odd is that in every other aspect of your life, you are in search of “the deal.” If you want to make any other type of purchase, you invest a lot of time in finding the best or lowest price you can find out there in the market. Yet, that is not what happens with most investors in the financial markets.

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