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.

Inflection Point (by Springheel Jack)

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As I mentioned yesterday the negative divergences have been building over the last few days and it appears that at the time of writing, equities are likely to gap down heavily on reports that the Greek deal is falling apart. I'm surprised by the Greek news I have to say, I was expecting it to last at least a week or two after being finalised, though against that, the deal is so obviously against the best interests of Greece, and has so much resistance to it there, that perhaps this is not such a surprising development after all.

Quite a few interesting charts this morning and I'll lead with a chart showing the daily bollinger bands on SPX, NDX and RUT. You can see how these indices have been walking the upper bollinger band upwards during this amazingly strong move, and if we are to see a retracement here, which seems likely, the obvious targets are the middle bollinger band in the 1320-5 area on SPX, with some strong support in the 1333 area, and rising channel support (marked) on NDX and RUT:

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Watching Japan’s Nikkei Futures Index

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Data released tonight showed another monthly decline in CGPI y/y (change in the price of goods sold by corporations) in Japan. This level is approaching zero and is in danger of falling into negative territory, as it did in 2009.

Since it's a leading indicator of consumer inflation, this suggests that Japan's inflation is teetering on deflation…one to watch for future month's releases.

The Daily chart below of Japan's Nikkei e-mini futures index, NKD, shows that price has pushed above a major downtrend line from the July 2007 high (broken green) and has stalled today at the declining 200 sma (broken pink). Price is sitting just below 9100 (red), which represents price resistance, through which it declined on August 8th, 2011, the Monday after Standard and Poor's downgrade of the U.S. credit rating.

It will be interesting to see if near-term support holds at 8910ish or if near-term resistance holds at 9100…a solid break and hold below/above these levels on sustained volumes should set up the next move for this index.

 

http://www.strawberryblondesmarketsummary.com/

Imminent Tech and Dow Transports Rollover?

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Below is a Daily chart of NQ. Overlayed are a number of lines, particularly a "pink diamond" formation that occurred during the first one-third of 2011, Fibonacci fanlines, several trendlines, and price levels.

Eventually the diamond broke to the downside and dropped to almost an identical level in height to that of the diamond (broken pink lines), nearly touched the 127.2% Fibonacci fanline (yellow), and pierced an extension of one of the diamond trendlines.

Price is approaching a similar measured move which, if it reaches it, would take it to 2616.50, where it would first be met by the 78.6% Fibonacci fanline (broken purple), and then up several points to 2620.25 which is the same height as that of the diamond. Should price pull back from that level, near-term support is back down at the top of the diamond at 2403. 50% of that move would take it down to 2500ish.

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Trade with a Margin of Error (by Andy Crowder)

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Okay, I think we all know my bias at this point. For those who don’t, it’s bearish.

I am not going to bother going into why I am bearish. Just read my posts from the last few weeks to truly understand why I am currently bearish.

So, I want to talk about something more important today – strategy. More specifically options strategies.

With options, you can control with precision, the amount of risk and type of risk you wish to take in any given trade in any situation.

One of my favorite strategies is selling vertical call/put spreads like in the Theta Driver Options Strategy.

Let me explain. And please understand I am keeping it simple for conceptual reasons. Once, you understand the basics we can really dig deep to understand how to apply risk-management.

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