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.
Trading is financial war. Losses are casualties, profits are territory conquered. An innumerable amount of trading lessons can be drawn from the study of military victories; however one specific war applies best to the individual trader: The Revolutionary War.
On April 18th, 1775 a disjoined group of local militia fired the first shots at Lexington against the greatest military force the world had ever seen and changed history forever. However, it is how the Colonials won the war that provides a cardinal lesson for the individual trader. Very simply we, the individual trader, are the Colonials waging war against the financial superpowers of our time consisting of the Fed, the ECB, and corrupt investment banks. It is an honorable fight, but a battle that must be waged correctly.
It was remarkable to see the USD/JPY skyrocket yesterday evening. We were throwing a big Halloween party at my house, and I peeked at my charts from time to time, and things just kept getting better.
But is this just a pullback? It could be. The Euro and the ES have both pulled back to what could be viewed as healthy levels for a normal retracement in the midst of continued bullish moves. In addition, this big lift-off on the USD/JPY is just one of a series, none of which have amounted to Jack Squat.
The ES needs to break 1223 to give the bears a fighting chance. Until then, I am viewing this market action with suspicion, in spite of it going in my favor for now.
All of the past few weeks just goes to show how strong the 200 Weekly SMA is… as well as weekly buy signals that I have mentioned for a while now…..
Anyways the Russell 2000 still can't get above its neckline….this should be LEADING instead of lagging….as it is a higher beta index.
I posted a channel derived from my friend Alphahorn's chart on Friday, but I regretted not posting the original chart to give the proper context. Alphahorn is running a primary bearish scenario and a secondary bullish scenario, and the high on Thursday was pretty much exactly at the dividing line between the two. Here's the full chart below, and if the red declining channel breaks up, then the bullish scenario will become Alphahorn's primary scenario:
Is this level the dividing line between a continuing bear market or a new bull market? Another indicator I watch suggests that it is, and that is the ichimoku clouds on the SPX weekly chart. Historically a break below the cloud has been a decent indicator of a bear market and a break above a decent indicator of a new bull market. as you can see SPX is testing the top of the weekly cloud. A break above with confidence would strongly suggest that SPX is in a new technical bull market:
The rally has been furious and fast. In less than four weeks, the Dow has risen 14.8 percent from its 2011 low, reached on Oct. 3. The S&P has gained 17 percent. The rally has been historic. If tomorrow holds 3% on the S&P, the major market benchmark will set the performance record for a one-month time frame.
While I mentioned that the market was short-term oversold towards the beginning of the month I never thought the market would rally this far, this fast. The S&P pushed through 1200, then 1220, followed by 1250 and now it sits at 1285. Amazing!