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.

Underneath the Trendline

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I really can't stand FOMC days. I feel like I'm walking down a dark alley in a really bad neighborhood, and some bearded, professorial-looking guy with a briefcase is about to leap out of a crevice and mug me.

I am thus pretty light today, having no large positions of any kind, but a wide variety of small ones. I note with interest that the Russell 2000 – – more specifically, the IWM – – was poised to claw its way back to the underbelly of its trendline, and it seemed to do just that earlier today.

0126-IWM

This is my "line in the sand" with respect to the small caps. Piercing this level would negate a pretty long-term trendline and – incredibly – represent a new recovery high. But it hasn't happened yet, and it might not happen.

What we do know is that even though the Fed has absolutely nothing to say (except for the paragraph that I helpfully provided yesterday………was I right about the SOTU, or what?), the entire world will do its utterly predictable heart attack routine at 2:15 EST and will read volumes about the future of the economy with every semi-colon and hyphen in the announcement.

It'll be nice when it's out of the way. Note that I'm going to be on the quiet side today since I'll be dealing with this nonsense.

Gold and Silver Targets (by Springheel Jack)

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NQ closed just over the rectangle yesterday and has kept on moving up overnight. I'm expecting more upside and I have pattern targets of 2333 (rectangle) and (2339) falling wedge on NQ. If NQ was to reach the upper trendline of the broadening top that would require a move to 2400 which looks a very long shot from here and seems unlikely because ES would have to break the main rising wedge on the daily chart:

ES is now close to a new high, and is therefore considerably outperforming NQ of course, as well as many other lead indicator markets such as EEM. ES looks likely to make a new high today and I'm looking for a move to the 1310-1315 SPX level for SPX to touch the top of the rising wedge on the daily chart if SPX makes a new high today

EURUSD followed the support break yesterday with a new high. It has been a widow-maker for shorts recently. Oil also broke support on the five month rising channel, but is now bouncing. In the short term there's a steep falling wedge on oil that has broken up since I did the chart below. Short-term, that's therefore looking bullish, and should bounce a bit here. It's worth noting that the rising wedge target is for a return to the recent high, but there's strong resistance in the 88.3-88.5 area, and I'd expect this bounce to fail there:

I've been looking at gold and silver this morning, and a bounce here for both seems likely. Both have reached significant support levels and have touched support trendlines yesterday. On silver I have a very nice declining channel and two possible H&S patterns forming. We reached the neckline for the first of those possible H&S patterns yesterday:

On gold I have a falling wedge since the most recent high and it looks likely to bounce from the lower trendline which was hit yesterday. It didn't quite make it to my neckline target of 1315 and might yet do that before bouncing. I've sketched in a potential path if the H&S continues to form and then plays out.:

I'm definitely leaning long today. A gap fill looks possible, but after that I'm expecting equities to go up. If ES breaks below 1284 or NQ breaks below 2290 then the short-term bull scenario would look much weaker.