Slope of Hope Blog Posts
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The support and resistance levels for the Major Indices noted in my post on January 10th still apply.
In that post, I also made reference to a 10-Day 30-Minute chartgrid of the YM, ES, NQ & TF and said that any repeated attempts to advance convincingly beyond the highs of the first week in January would need to be accompanied by higher volumes. The horizontal white line on the updated chartgrid below represents that week's high. We can see that:
- + the YM has struggled to stay above that level on building volumes, and today's advance took place in overnight trading on very low volumes…price fell back to the range high which is near-term support
- + the ES has managed to stay above this range high, for the most part, on building volumes, and today's advance also took place in overnight trading on very low volumes…price is trading just above the 200 sma (pink) and last week's Volume Profile POC (yellow horizontal line) on this timeframe
- + the NQ has also managed to stay above this range high, for the most part, on building volumes, and today's advance also took place in overnight trading on very low volumes…price is trading just below its 50 sma (red)
- + the TF has also managed to stay above this range high, for the most part, on building volumes, and today's advance also took place in overnight trading on very low volumes…price is trading below both moving averages, just above last week's Volume Profile POC, and just above the 10-day Volume Profile POC (red horizontal line) at the right edge of the chart
Numerous downgrades, more European woes, news of inevitable Greek default, financial sector struggles among other bearish news led to a lower, oops, higher open today? Yes, higher.
It has indeed been rather frustrating as a short-term bear since the gap open on 1/3. But, oftentimes when you are a contrarian and you make your livelihood on fading short to intermediate-term market extremes you often get into positions early. Any professional with any cred will tell you the same. It is to be expected. However, we are now nearing the area of max pain. While I thought we would see an immediate push lower after the first week of the year, I was willing to accept a push up to 1300 on the S&P or roughly $130.00 in SPY. We hit that level today and after the bulls pushed and pushed they failed miserably by the end of the day.
Squeeze … as I have mentioned in the past, squeezes are better if you can push the market lower first. Was Friday's gap lower that move? Was it big enough to really set-up a strong enough squeeze, or is this move going to fizzle out quickly?
Read on to see what I think …
My good Parisian friend Serge just sent me an interesting illustraton of financial fund XLF and its RSI.