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.
I first got online in 1981, and one of the first people I met (on CompuServe, if that name rings a bell) was a kid my age named Rob Reid. Even though he lived on the other side of the country, he and I became almost instant friends, and that friendship has persisted to this day.
Rob has done some pretty amazing things in the thirty years that have passed since we first met. (You can read the details on Wikipedia). But, most recently, he gave a hilarious talk at TED about, as he dubs it, Copyright Math. Here's the five-minute speech:
Probably the most troubling chart I've seen recently in the NYSE summation index. Over the past several weeks, what one would have expected would have been a cycle down in equities (take note of past instances, marked with arrows). Instead, the market has flipped the bird to all bears and pushed to levels not seen for years.
Now that the down-cycle is nearing completion and about to swoop higher, I wonder if this will only serve to supercharge the market further. Over the past year, the NYSE summation index has only been our friend a couple of times but has helped out the bulls almost without fail. I guess a few tens of trillions of dollars in new liquidity can have magical powers over what were once comprehensible markets.
Regular TA had been good in a two way market. But in a one way market it has failed miserably. And yet we are looking for an advance look into the future. All sorts of obscure and unheard of models are going round. One of such model is Lindsay’s Three Peak and Domed House. There are people who have made a career out of it by writing book on it, giving lectures and writing newsletters. Personally, I think it is something like Elliot Wave where you can make the wave counts fit after things have happened. The 3PDH goes like this:
If we were not in a very strong uptrend, I would have loaded the boat up short on SPX yesterday, as the bearish reversal setup there is really very nice indeed. The candlestick setup I was looking at yesterday suggested we might see a slightly higher high, which we've seen. Over the last two days rising wedge resistance on SPX has been hit at the high on both days. A Vix Sell (equities) Signal triggered on Wednesday and confirmed yesterday. Decent negative divergence on the 60min and very much on the daily while overbought on both. It really is a nice setup.
We are in a strong uptrend though and in strong uptrends bear reversal setups can fail repeatedly. That gives some reason for caution here. Another reason for caution is that short term swing tops on SPX have been taking quite a while lately, and the last one just trickled up my resistance trendline for a couple of weeks before the modest subsequent reversal.