Slope of Hope Blog Posts
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The last two days were really hectic with no internet connection and fifteen hour flight etc. As such I could not post anything and my apologies for the absence.
In the meantime, the stock market in USA has been a one way street. It has so far defied all logic and divergences. It has gone from extreme to further extreme. But such extremes are not backed by any fundamentals. We all know that seasonality pushes the stock prices higher at this time of the year but usually there is a correction during mid-January which has not happened yet.
I was looking for SPX 1300+ during the 1st week of January but it did not come then. I was also expecting a mild correction and continuation of the rally in the 1st week of February. So far the correction has been elusive. The problem with such situation is that without a correction not much upside can be expected in February.
Here's an interesting breakout of an ETF which not only has a really cool pattern but also pays nearly an 8% yield.
I've called the last few significant interim tops and bottoms on SPX well, but those all had something in common that we're missing here, in that they all had clear trendline and/or pattern setups. As I have been grumbling almost daily for weeks in my morning posts, that is not something I'm seeing here as yet. We don't always get decent trendline setups of course, but often when I haven't been able to see them in the past that has been because they have not yet been established, as the trend has a lot further to go. That is something that is very much on my mind here.
Short term my SPX target at declining resistance from the 2011 highs has been hit, and this is a good place to expect at least a short term reversal. Immediate support is at the pre-market low at 1299.5 ES and that is a possible neckline for what could develop into a larger reversal: