Category Archives: Indicators

ES Short from Retracement Levels

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Yesterday the market tried some recovery, amidst a flurry of news coming from Athens, Brussels and Berlin, regarding the risk of Greece defaulting on its debt. The bounce had retracted completely by the end of the day, but overnight the market is trying again the same rebound, so today the Close may be positive.

In the ESU15 DAILY chart below we can see the next valid support and resistance levels and we have highlighted the fact that the market will reach 100% odds to go SHORT DAILY at the 2091 level. This means that based on our DAILY model reading, the market is already OVERBOUGHT and marching towards a 100% OVERBOUGHT DAILY condition. A new pullback is nearly sure to happen before then. It is hard to say if it will be another sharp pullback or just a small one followed by higher prices. We can only say that when the odds are good, LONG or SHORT, you must take action to profit from the upcoming reversal.

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Retracement Levels FTW

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One of the nice things about Slope is that we have a variety of contributors, so you aren’t subjected to my Johnny One-Note ramblings all the time. An old timer here is 2sweeties, more professionally known as Retracement Levels. He’s been with Slope almost from the beginning.

On June 9th, he did a post to go long the market, and I’ve got to say, he totally nailed it (indicated below with the green arrow). Even better, this was a follow-up to his “short the market” idea, marked with the red arrow. The “short” idea missed the top by a little, but who cares – – it was awfully close. Suffice it to say I’m glad there are other voices here on Slope to give the place some balance!

0617-es

Gold’s Ratio Signals

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A brief snapshot of counter-cyclical gold’s macro signals vs. other metals (and broad commodities) that are more positively correlated to economies, using weekly charts…

Each week NFTRH updates many charts of nominal US and global stock markets, commodities, precious metals and currencies over multiple time frames. But we also cover economic data and indicators, with the first macro chart below (Palladium vs. Gold) still barely holding its economic ‘UP’ signal from January, 2013. At that time a coming economic up phase did not seem likely, but PALL-Gold and fundamental information gleaned from a personal source in the Semiconductor Equipment sector gave us a good risk vs. reward on that stance.

While it can be argued that using an indicator like Palladium (positive economic correlation) to Gold (counter cyclical) is subject to the discrete supply/demand fundamentals of the two assets, it has worked to signal up and down economic phases, with the most recent shown in Q1 2013 (green arrow). This indicator has been whipsawing since topping out a year ago and the moving averages are near a trigger point.

pall.gold

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ES Long Signal

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If you have been following our advice on May 15, 2015, you may have made some good profits on the latest correction (see chart below).

Here is what we wrote on SOH, that date:

Now a good, new going-SHORT opportunity is coming up in these days […]. The ESM15 has almost reached a DAILY area where the odds to go SHORT are quite good: 2127.25, 63.82% overbought. WEEKLY and MONTHLY time periods are not supporting the trade, meaning that this is probably only a quick swing trading opportunity, however things may change if/when the market reaches the ~2140 price area. From there also the WEEKLY and MONTHLY overbought gauges will go above 50% in value and thus create a better-than-a-coin flip edge for the SHORT trader. (more…)

SPX:VIX Ratio: The Next Hurdle

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170 is the next major resistance level to be overcome on the following Daily ratio chart of the SPX:VIX. This appears to be “make or break” time for SPX Bulls. 180 and 192 represent the next and final major hurdles (set in 2014) that will need to be overcome before Bulls can comfortably feel that volatility has been quashed while (if) the SPX resumes any kind of sustainable uptrend.

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ES Short

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It looks like it is time to go SHORT E-mini S&P500 Futures…

Our PRICE EXTENSION ANALYSIS model below shows how far a price retracement (uptrend) can go on each time period, based on the statistical analysis of all the historical retracement patterns that share similarities with the current retracement pattern.

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