Well, I've had better weeks than this one. I'm glad it's over. Everyone enjoy their long Labor Day, and thanks for swinging by!
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.
Ribbon Study and the S&P
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)
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.
Originally published on MPTrader.com.
Volatility Sent into the Dumper
Possible Short-Term Swing High Today (by Springheel Jack)
I've been looking carefully at various charts and I would be sugarcoating it to suggest that the bears aren't in significant trouble here. This move up from 1037 ES has been very powerful and there is every reason to think it may go higher.
Looking at my SPX:VIX daily chart we failed to break the broadening ascending wedge from the May low, and the obvious next wedge target would take us to the 1130 – 1150 area on SPX, which would be little short of disaster for the bear case as the main declining channel from the April high would be convincingly broken:
Here's the main declining channel on SPX. I'm seeing the upper trendline in the 1106 SPX area today and that is close enough that it could be tested today:
In the short term I was saying yesterday morning that I was expecting sideways to up chop yesterday and today. We had that yesterday and a small broadening ascending wedge formed on the ES 5min over the last day that could take us up to test that main declining trendline today:
I'm still favoring more upside on ES and downside on USD today. EURUSD has been slowly rising towards my target in the 1.292 area, though there is an argument for a reversal at 1.29:
The bears aren't entirely out of the game yet though, at least not while the flight to safety trades are still looking bullish. We've seen some pullbacks in long treasuries and yen this week, but they're both building rectangles which despite being called rectangle tops or bottoms are generally continuation patterns. Here's the rectangle on USDJPY:
Precious metals are also looking very strong and silver looks as though it may be making a major breakout. If yesterday's gains are sustained then we will have a major break up and once silver rises past $20, the obvious target is $30:
I'm expecting to see a short term swing high today, though looking at the spike up while I've been writing I may of course be mistaken. If I'm right though, we're close to the high today which I'd expect to see in the 1104.5 to 1107.5 ES area. After that I'm expecting to see a retracement early next week into the 1070 area.
