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.
Below is a summary of the major sectors. As you can see, it was a good week with all major sectors in the green.
I've included the chart book with weekly, daily and monthly charts for your viewing in addition to all 164 sectors sorted by weekly performance. You can find that here. There were three negative subsectors for the week:
| Home Construction |
| Gambling |
| Health Care Equipment and Services |
All data furnished in the reports are courtesy of Stockcharts, and the compilation courtesy of me.
(Stocks were rattled Thursday after hours due to the announcement that the Fed was raising interest rates to 0.75 from 0.50.
"The Fed has been supporting the banking sector since the crisis with extremely low rates. "It's a wake-up call that easy money won't be around forever. That's not good news for the banking sector and the U.S. banking sector, especially," said chief market strategist Howie Feltersnatch.
Rumors that the nude photos of Snooki (from Jersey Shore fame) were fake or an elaborate publicity stunt crafted by Snooki herself; sent US futures lower and put Asian markets deep in the red. European Indexes did recover from the news.
"Europe has a much more relaxed stance on topless women; we were also the first to perfect the art of tabloid reporting. We expect this to have little to no affect on our markets," said Nigel Toughskin.
On Friday, US markets opened up weak. Investor confidence was boosted after Tiger Wood's speech, showing signs that the economy may continue to recover with Tiger Wood's sexual rehabilitation and his return to Buddhism, which could also help the Asian markets rally further.
US markets held their gains into the close on the news that the Fed was raising interest rates to 0.75 from 0.50, which many Investors say shows strength in the banking system.)
If there is one thing we should all learn from this past week, it is that "THE NEWS DOES NOT MATTER". Read some EW stuff, basic TA books or some of Gann's stuff going back to the early 1920's! They all tell us the same thing.
I saw many good risk/reward setups on the short side this week, and got stopped out of all of them. That is very frustrating, but I have a plan and I'm sticking to it. What is disturbing to me is that many people do listen to the news and trade off of it. My BFF, (and fellow ghost hunter) Ricky Magnuson, called me Thursday night and told me of the news that the Fed was raising rates, he said he was going all in FAZ and TZA after hours. Well he got crushed on Friday; and would be much better off if he learned some TA and traded off of what he believed his charts were telling him, not what others say or what he hears on the news.
How many times have we heard, "It's all about the dollar," or "wait till the fed raises rates." Sure these do factor in to the big picture, but I try to avoid all the noise I hear on TV. The dollar has been rallying since Dec, my short positions have not… The fed's announcement didn't help them either. I guess it's was all baked in, so why pay much attention to it.
A lot of times, this sort of "news" only produces an EKG wave setting up a bunch of bears for a nice trap, and freaking the crap out of the bulls that went long that day. The market is going to do what the market is going to do, and it wanted to go up more.
Lastly, I know how financially hard it is for newspapers and the media right now (I have a cousin that works for one and is always fearful of losing his job). If any higher ups at the NYT, CNBC or whatever are reading this; if you need to cut costs, fire some of your more expensive reporting staff and hire me. I will work cheap (free beer or gas money once I get the Fiero), you can contact me at nathainel.goodwin@yahoo.com. I can come up with an endless supply of dumb “news” reasons the market is going up or down which we should probably all ignore.
Here is one chart I trust more than the news.
It’s Brian Johnson and here’s another video on the current state of the markets. The futures had a strong move down last night but the markets recovered nicely after they had time to digest the news. The move is still up but the slowing momentum is really starting to become apparent. A pullback is in the cards for next week.
Well, that was a pretty good week for me (sorry, bears!). Although the market went much higher than I originally anticipated, I had a very good trade overall and I'm pretty happy with it.
As you may know, I love geometric patterns and symmetry and I play with various scenarios and see which pattern fits into different scenarios. Today I am going through some indices and possible chart patterns and see if these patterns are going to play out for the coming months.
Head and Shoulder Pattern
Here is Dow Jones Industrial developing a potential H&S pattern. Remember three drives pattern (incomplete) back in Sep & Oct, which drove everybody nuts? I'm delighted to say that they are back! If you take the triangles from Sep & Oct, and apply it to the current price movement – Voila! The price, angle, and time almost makes a perfect match! (assuming that it's going to drop down to the trend line to form a same pattern) I could possibly see the repetition of the left side price pattern on the right side for the coming months.
Gartley Pattern (possibly turning into Butterfly Pattern)
I have laid out this pattern with SPY a few weeks ago and this seems to be playing out nicely, and pretty much in line with INDU H&S pattern above – same price movement from a different point of view. This pattern is still in tact and if SPY goes above 78.6% fib, this pattern could turn into a "Butterfly" pattern and will be updated accordingly.
M Pattern
Here is a possible M pattern formation in IWM. IWM is one of the strongest indices of them all, and I'm expecting IWM to come to retest the recent high and possibly goes higher in the current price movement. Unless IWM breaks above the previous high and close above it, I would expect it to come back down to form an M pattern.
Three Drives Pattern
Here is UUP developing a possible three drives pattern. My expectation is UUP is coming to retest June 15's high.
SPX Open Interests
As illustrated above, my expectation of the general market for the coming months is pretty much a range-bound. I don't expect the market to crash down to 600 or go to the moon. So, whether you are a bull or bear, be sure to take a profit before it's gone.
One of the strongest evidences that I have for my expectation is SPX open interests.
As an option trader, I keep a very close look at the open interests, and they can tell you many things.
Although I forgot to take a snap shot of Feb SPX open interests, there were more than 150,000 open interests of both call and put options at a strike price of 1100 a day before OPX. Believe it or not, Feb OPX settlement price was almost exactly at 1100 (if I remember it correctly, it was at 1101).
(On a side note, when I saw SPX closing at 1106 a day before OPX, I was wondering how they (i.e., MM) were going to drop this tape as much as 6 points overnight (as SPX's settlement price is the opening price of OPX Friday), and Voila! ES magically dropped more than 12 points and came back right at 1101 at the open to make both ends meed. Speaking of market manipulation…..)
Now, if you go back to Oct of last year, SPX has been settled right around 1100 almost every month since Oct 2009, except for January 2010.
Now, if you take a look at March open interests, you would be amazed to see how many open interests you can find at a strike price of 1100.
Altogether, there are as much as half a million open interests right at 1100, and that is telling me that we are going to be in this trading range for a while.
I hope everybody has a wonderful weekend. To my surprise, we are getting a sunshine in a rainy Seattle this weekend!
