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.

To Infinera……and Beyond!

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It's been a pretty good morning for me so far, all things considered, but I want to point out a complete failure of one of my few longs: INFN.

This poor sucker lost one-third of its market value this morning. It's particularly troubling for me since it was a real favorite of mine, as I mentioned a few weeks ago.

Now, I will never miss an opportunity to tell myself I'm an idiot, but it doesn't apply this time. Why? Because:

(1) The technical basis for my long suggestion was sound;

(2) I used good risk management, allocating the smallest allocation that I permit in my portfolio – $25,000 – to this position. I put on a small position because my stop-loss level was 10% away from the entry, which is, in my trading, extremely high (I prefer about 4% or less).

So INFN gave me a loss this morning – indeed, it took my profits from OIH, which was a dozen times larger in size, to null out this loss. But as long as I am obeying my own rules, I am willing to live with the occasional "shock" like INFN, since it doesn't cause any lasting damage.

1019-INFN

Push to 1201 ES? (by Springheel Jack)

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In an ideal world the next few days would play out as follows. USD would fall to the strong support trendline at 75.75 while ES rose to a target in the 1200 area. They would trough and peak respectively on the same day and then reverse, with the obvious target for ES being at the IHS neckline in the 1130 area. It may not play out that way of course, and the reversal periods for equities and USD often don't coincide, but sometimes they do, as they did at the low in February, and with both close to decent probability reversal areas it may well happen that way this time.

On ES I know Pug is seeing a likely high in the 1200 area during the next few days and I have a rectangle on ES that is suggesting the same, with a target in the 1201 area. These break up 68% of the time though the rectangle is a bit sloppy to my eye, and the last rectangle that I saw on ES a few days ago broke downwards of course. This one won't break downwards unless we are to see a significant support break on ES, so I'm expecting that it is likely to break up:

101019_ES_60min_Rectangle

In terms of support on ES and SPX, I have the support trendline on ES at 1066.5 ES at the moment, with the SPX lower channel trendline in the 1172 area. Those will obviously break downwards at some stage but I'm not seeing anything to suggest at the moment that the break is likely to happen today. Here's the ES chart from the August low:

101019_ES_60min_Trendlines

On EURUSD  have a clear rising channel at the moment, with the next upside target slightly over 1.42 and support at 1.385. Support looks strong with four touches on the support trendline, but EURUSD has started a topping process by the look of it, and the next part of that process would be a break of that support trendline, but I'd expect even in that case to see a last spike up into the 1.41 area. Here's the current EURUSD rising channel:

101019_EURUSD_60min_Rising_Channel

Copper is very close to the upper trendline of the broadening top I've been watching. I've been looking at that carefully this morning, and I have the most likely location for the trendline at 390. There are only two previous touches to the trendline of course, and the first touch had a significant intraday shadow on the candle, so I've drawn in two other possible alternate trendlines and it is also worth noting that the target for the rising wedge that broke up is 405:

101019_Copper_Daily_Broadening_Top

There's been a lot of speculation over the last few days as to where the amazing runs on AAPL and GOOG might find their next intermediate tops. I've looked at both charts and I don't really have a view on GOOG, but I have a rising channel on the AAPL weekly chart that suggests that the next reversal should be in the 335 area. That's worth noting as if AAPL reverses then Nasdaq should reverse too:

101019 AAPL Weekly Rising Channel

There are significant downside risks here and now though. While I've been writing GBPUSD, which appears to be topping out, has broken the recent channel support trendline and we're close to completing the head on what may well be a head and shoulders reversal pattern. If so however, I'd still be expecting a last move up to make the right shoulder of course. With EURUSD and GBPUSD both in apparent topping processes though, a bottom for USD looks close, and when it reverses it may well carry equities with it.