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.
GLD is Old, Cold, and Sold
Our kooky precious metals bulls – – not that I don't love 'em, some of my best friends are kooks – must be getting really frustrated. Precious metals have had every reason to rally. The storyline is simple enough to follow: (1) precious metals represent the only true store of value; (2) the US has "printed" up trillions upon trillions of dollars of "money" whose only value is the perceived value of a public accustomed to fiat money (3) the US, like so many countries throughout human history, will see inflation take hold and cause the value of real money to soar.
That storyline seems to have peaked on December 3rd. In spite of so many assets – like equities and energies – continuing the charge relentlessly higher, precious metals have been pretty much a dud. Take note of the trendline for GLD and notice how it has been getting brain damage conking its head against that failed line.
A Couple of Interesting Breakouts
$RUT Bulls Could Be In for a Big Surprise
Tape Read ES (Tuesday Edition) by Greg
Tuesday's chart of the ES was very interesting. As you can see by the numerous declining volume spikes, the buying surges were running out of steam. The obvious question was where would a reversal come if it was going to? The horizontal green bar was an area I flagged as a potential area where we might see a reversal. The keltner channel set at 1.619 & 39 acts as a decent trade filter.
What I've noticed for short or long reversals late in the day, is that price will break through, and then back test the channel before making it's move. When you see a break and a back test, it always bears evaluating for a potential reversal play. The risk-reward is pretty good because you don't need a huge stop because either the channel edge will hold on backtest or it doesn't. If it does, then late in the day odds are in favor of this particular setup.
In the above example the upward momentum fades causing price to near the channel, then the hanging man doji's add credence to the shooting star doji. The volume bled off as the channel edge was back tested, and the clincher was the red candle which gaped down from the channel.
Lastly, in this kind of situation I've found the SMA (close)(3) Green line, and SMA (H+L+C/3)(5) Red line, work well to keep you in position on the trade. When those two cross, it's time to cash out and call it a day. The volume spikes just prior to the cross are the big clue the selling is about to end, and the cross nails the close.
