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 Retail Paradox

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I doubt there's any one sector which has stunk up my P&L more this year than retail – – particularly specialty retail. I know the symbols by heart – – ANN, XRT, RTH, WMT, SKS, WSM, COH – – and, having been burned far too often, now just avoid them altogether. 

The intuitive side of retail would seem pretty grim; specifically:

+ High and persistent unemployment

+ The "new austerity" supposedly garnered in by The Great Recession

+ The increasing benefits costs for employees

The stock charts don't lie, however, and the ever-ascending prices for Anyone That Sells Anything seems to defy all the above. The chart for Williams-Sonoma, shown below, is pretty much what all retail stocks look like: an enormous and explosive skyrocket from the year-ago base. It doesn't make sense, but I've had enough of retail and its machinations.

0323-wsm

Chopping Around Uncertainly

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SPX bounced back into the ES rising channel yesterday and is back just below resistance. We may well be making a triple top. The action in recent days has a disturbing look of an IHS being made though, and that is something to watch this week, though the left shoulder has too much sideways trading for a good H&S pattern:


100323_ESM0_60min_Channel_and_Resistance


We should correct here. We have hit the top of the current internal SPX channel within the main rising channel and I'm still expecting to see a correction this week to the 1120 level as the obvious target:


100323 SPX Daily Rally Channels


USD has broken up from the declining channel of recent weeks and looks set to rise further. That should at least slow rises in equities while it is ongoing on past performance:


100323 USD Daily Rising Channel

EURUSD bounced from strong support yesterday for what looks like a technical retracement only, and a break down through it would be confirmation that a major new wave down has started:


100323_EURUSD_60min_Support

Oil has broken down from a rising wedge and has established a gently declining channel:


100323_CLM0_60min_Declining_Channel 

Gold has also broken down from a rising wedge and has also established a gently declining channel:

100323_GCM0_60min_Declining_Channel

My feeling is still strongly that equities will correct this week, but I'm starting to lose confidence. We will need EURUSD to break support in the next day or so to back up my view, and a break with confidence through resistance at 1165 on ES would undermine the case for a correction badly.

One thing that I will be watching very carefully this week in terms of a longer term signal is the longstanding rectangle on XLF. It traded above the rectangle intra-week last week but closed back within it. A weekly close above or below it would be a strong signal for equities in the weeks afterwards. If we fail to correct this week then a close above it would signal that we will rise strongly in the weeks afterwards:

100323 XLF Weekly Rectangle