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.

Lick It Up

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I just want to go on record saying how delighted I am that the crooked, criminal, government-supported bulls are getting a nice big dose of Disappointment, which has been the bears' diet for two solid years. The ES exploded higher early yesterday morning, only to result in a 40-point reversal (equal to 400 points on the Dow 30). And this morning the ES formed a nice saucer, rushed higher, and has – thus far – absolutely fallen to pieces.

0302-spy

My fondest hope at this point is that we plunge beneath 1297.50 on the /ES and twist the knife further. The bulls deserve jail time, but failing that, at least bitter disappointment for – – oh, I dunno – – three or four continuous years would do the trick.

Bull Trap (by Springheel Jack)

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The bull setup yesterday looked too good to be true, and it was. There hadn't been a significant move down in the last two years on the first trading day of the month after a gap up from the previous close, but we had a trend day down yesterday regardless. Kudos to my bullish EW friend Pug for calling the high and reversal.

So where does that leave us today? Well the support trendline on SPX wasn't breached, so the rising wedge on the SPX daily isn't yet breaking down. If it does this will start to look very ugly on the bull side:

Encouragingly for the bulls though a new low wasn't made either on SPX or on ES overnight, and the 60min RSI on ES and NQ is showing some positive divergence, which suggests a bounce today. You'd normally expect a two to five day retracement after a trend day down in any case unless the market is extremely weak. Here's how that looks on the ES chart:

I'm watching copper carefully here for a directional signal. Copper is forming the IHS that I've been speculating might form for the last few days. It may yet break down from this, but a break above 253 would look extremely bullish for copper, and for equities too:

I thought I'd make a change and post some thought-provoking individual equity charts today. The first one is my AAPL weekly chart, which I've been seeing as a possible top signal for the wave up since July. AAPL is very heavily dependent of Steve Jobs' precarious health though, so it might not make the obvious target:

The other two charts are charts that I posted a few weeks ago when they broke broke rising wedges. I marked the likely bounce levels if the wedges were evolving into rising channels and they both bounced there, but what they've done since, and their bigger picture patterns setups, are interesting. The first is AMZN, which has gone on to break down from the rising channel, and looks ready to fall considerably further:

The second chart is for GS, which like AMZN also hit a significant resistance trendline from 2009 at the top of the shorter term rising wedge, albeit a declining resistance trendline in this case. The now very well established pattern on GS is a broadening descending wedge, and if the current rising channel breaks then the obvious next move is to wedge support at slightly under 100, though it might first form an HS pattern with the neckline at 165:

Overall the bear case looks stronger today, and if the support trendline on SPX can be broken I'll start to take it very seriously even though the end of QE2 is still over three months away. Until then this looks like another dip to be bought. I'm expecting a consolidation with a modest bounce today regardless of overall direction.