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 One Number I Want

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I have been thinking a lot this week about what I can do to help preserve profits/prevent losses better, and I now have my wish list: it’s one item long.

What I want may seem naive, although I hope not. But all I’m after is a number, ranging from -1 to +1, indicating the target amount of bearishness/bullishness for my portfolio.

For example, if such a number was 0.5, it would mean that I should have 1 bearish position for 3 bullish ones (assuming they are all equal). A number of 0 would mean 1 for 1. A figure of -1 would mean totally bearish. And so forth.

I already have the resulting number in my spreadsheet, which is based on all my positions, but what I need is something to drive that number. That is – – a target. Because bullish and bearish charts I have no trouble finding. It’s targeting the right “mix” day to day where I am having issues.

Now, I’m not that knowledgeable when it comes to indicators, but I went through every single indicator in ProphetCharts today, using the S&P 500 index as my price data, and I didn’t come up with any answers. There were some oscillators that were somewhat intriguing, like the Slow Stochastic, but there were two big problems I had with even the best of them:

(1) They were all lagging – – sometimes severely – – which pretty much neuters their usefulness.

(2) Even if they didn’t lag, it seems to me these are only useful during the rangebound market like we’ve had the past year. Using them, for example, during the meltdown of late 2008 would have been a total disaster, because most of them kept signaling the market had bottomed way, way too soon.

There may be no answer to this, given the complexities of the market, but there are a lot of smart people here, and I plan to leave this post up a good 18 hours or so to see what kind of comments it gets. Please “Like” any suggestions that you, umm, like, so they can bubble to the top.

Oh, and please, I’m after something not very complicated. Whenever I throw a question about indicators like this out there, it seems the answer is really, really complex. I’m a simple soul, and like I say, I’m just after one simple number. I would pay tens of thousands of dollars per year to the provider of such a number, if I knew it was reliable.

Ribbon Study and the S&P

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I was going through all the technical indicators in ProphetCharts today, and I found something rather interesting about the Ribbon Study. Looking at the daily chart, the ribbons (which are made up of sixteen different moving averages) tend to "harden" to show broad turning points, creating strong support or resistances for the price action. I don't latch on to many technical indicators, but I confess that I found this was thought-provoking:


Chart on Oil (Mike Paulenoff)

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My pattern work is warning me that all of the action in crude oil off of the Aug 25 low at $70.76 is a digestion period of the major downleg from the Aug 4 high at $82.97 to the Aug 25 low at $70.76.

If that proves to be an accurate description of the price movement, then it should be labeled as a "Bear Flag" type of formation, which when complete will resolve itself to the downside with the initiation of a new downleg. The downleg should break both the Aug low ($70.76) and the longer-term support line from the Jan 2009 low, which cuts across the price axis around $71.15.

Such a violation of support should trigger serious long liquidation in crude oil.

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