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 Remarkable IWM/Fib Relationship

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One of the reasons I decided to "back off" my bearishness yesterday was this graph of IWM:


In the span of just over a week, the IWM (which is the Russell 2000 ETF) traversed from its 61.8% Fibonacci retracement down to the 50% level.

This is remarkable to me for two reasons – – one, the fact it moved that far, that fast; and two, how beautifully the price moved almost precisely between these two levels.

The Big Picture (by Pat McNeill)

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Hi, I’m Pat
and I’m an Elliott Wave Guy. If you don’t know about Elliott Wave theory I recommend
that you go to the library and read the first four chapters of Elliott
Wave Principle by Frost and Prechter. It should just take you a few hours. These
four chapters summarize the theory in its entirety. Do not research Elliott
Wave on the Internet. Folks are always making stuff up on the Internet and
calling it Elliott Wave when it is not. IMO, the tutorials over at EWI aren't even that good. The book has it all, is the fastest way to learn it, and is the defining reference on the theory.

What will
this do for you? If you have done just a few months of screen time these four
simple chapters will Blow Your Mind. You will never look at markets the same
way again. I have done many thousands of hours of research back testing indicators and relationships within markets and Elliott Wave has become the foundation for all of my analysis. I have never met anyone who understood Elliott Wave Theory and
Markets and concluded that EW is nonsense.

What do we
know about markets?

(1)   Markets move in waves.

(2)   These waves move in trends and

(3)   These waves have structure.

(4)   We can define with rigid rules 5

(5)   The Market is a fractal; waves at
lower degrees in the fractal combine to make larger waves at higher degrees in
the fractal.

Enough with the pitch. This is
what Elliott Wave is telling us in The Big Picture:

The S&P
500 just dipped below the lower trendline coming up from the Mar. 9 bottom (on
both Linear and Semi-Log scales). IF Primary Wave 3 has begun, we are in a
position compatible to the October 2007 top. However, the number three is a big
deal in Elliott Wave because it is almost always the most forceful wave in a
motive series. This means the upcoming decline
(if it has started) as a three of Primary Degree will be more
forceful (greater price change / faster) then the decline from October 2007 to
March 2009. This is why the Elliott Wave Folk are getting so excited.

091028 Pat McNeill
Click on
the chart for a sharper image.

Thanks again
to Tim and best regards to my fellow Slopers!  
Pat McNeill

Come to Papa

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This bear is seeing a big, fat bounce coming, and he couldn't be happier.

A surge higher is just what the doctor ordered. My view is that the market will push higher – – and the key question is how high – – and then resume its fall, gaining speed on the way down.

Some people – the "1120 crowd" – see the market pushing to new yearly highs. I don't. Looking at the chart below, I would anticipate the /ES getting up to the 1060-1070 range.


The other "tell" for me is GLD. It would be confirming evidence for me if GLD got up to about 102.50. I personally would be much more comfortable getting aggressive on the short side at that point.


In the meantime, all my shorts are still in place, but I'm going to try to balance things with some well-placed long positions. But, I say again, I am thrilled at the bounce that is going to start happening at the opening bell, since I think a tremendous bull trap is in the process of being set.