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.
COT Report Week Ending 3/8 (by MacroStory.com)
The commitment of traders report for the week ending March 8, 2011 is a rather interesting one and shows the value in using the report. Copper, followed by many has been signaling a move down in equities for a few weeks now. It is off its highs by 10% while SPX has held in for the most part (down about 3%). The question many would like to know is where is copper headed? What about oil? Oil pulled back a few times (after Egypt and again on Friday after the failed "day of rage"). The answer to both of these will give insight to future equity price action. Let's look at the charts below from this week's COT Report.
Copper: Commercial continues to lighten up their net short position (they short strength and buy weakness). Since copper hit its high in February commercial positions have not stopped in lightening up their short position as shown below, a negative for equities.
Oil (WTI): After Egypt oil pulled back but commercial positions indicated this was not the future price action of oil as they continued moving net short. They have continued this week as well and are more net short than any other time since January 2010. Further oil strength looks to be at hand, a negative for equities.
SPX Consolidated: Note the divergence between the SPX consolidated commercial and the SPX. I don't read a lot into this chart but the large and sustained divergence would imply SPX weakness.
USD: If anyone can figure out the direction of the USD please write a book. Case in point on Thursday the USD had a big move up and recaptured a three year trend line only to reverse the entire move (and the trend line) on Friday. Per the chart below it does look like commercial net and non reporting (retail) are positioned similarly for USD weakness. From a technical standpoint this seems to be the probable path but group think is usually wrong so that would at least raise some doubt.
Thirty Year Treasury: Another tough one to read. Commercial net did increase their net short position which means 30 year rates may fall back this coming week but it certainly does not signal a trend change and any drop in rates may simply be a technical bounce before another move down (down in price, up in yield).
Submitted by MacroStory.com – To read more please visit - MacroStory.com
Uranium Gets Nuked
During the weekend, I saw some chatter about how uranium would actually be bid higher in price.
I'm the contrarian's contrarian, but even I had to say – HUH?!?!!? – to such a notion. I mean, the nuclear meltdowns in Japan are going to be as good for the nuclear industry as the Concorde-bursting-into-flames was for the supersonic aircraft industry.
In other words: dead for decades.
Opex Week Begins (by Springheel Jack)
Friday's powerful push up has prompted quite a few calls that the recent correction is over, and that's possible, though I think it's unlikely. We saw some major trendlines break last week, and I'm expecting to see more downside before another move up. That's not to say that equities will fall straight from here though. It's been quite a while since the bears saw anything resembling a free lunch, and with opex week beginning we may chop around a while before falling further. On the ES chart (June now), broken triangle resistance was tested hard on Friday and I'm seeing a perfect declining channel that suggests we may see more upside this week:
On NQ the 2300 level was briefly recaptured on Friday and a retest of the H&S neckline would be in the 2310 area. If that breaks up then a retest of declining resistance in the 2350 – 2360 area. As with Es it is the declining resistance trendline that looks important this week and I would see a break of that as a signal that the correction was probably over:
I'm watching copper carefully for a tell on direction this week. The H&S neckline was tested on Friday and a falling wedge has formed with resistance currently at 421. A break back up through that, and then a break over 425 for an hourly close would suggest a retest of the 450 level:
I've been looking very carefully at EURUSD this morning, as I thought there was a short term break down on Friday morning, but looking at it now it seem clear that EURUSD was just establishing the lower trendline of a short term declining channel. If last week's low is taken out then a significant retracement would be more than likely, but until then I'm not seeing anything bearish on the EURUSD chart:
Only four charts this morning as I'm having some trouble accessing my stockcharts account. I'm leaning bearish overall but thinking we may well chop sideways this week.
Daily SPY Recap (by Leaf_West)
Well on top of having the worst day in the markets since last August, traders woke up to face the news of the biggest earthquake in Japanese history. Throw on top of that some news about China’s inflation rate exceeding expectations, and new Portugal austerity measures (totally unrealistic) and it looked like it was going to be an emotional start to the trading day (read my pre-market blog).
