Slope of Hope Blog Posts

This is the heart and soul of the web site. Here we have literally tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. You can also click on any category icon to see posts tagged with that particular category.

Patterns Don’t Always Matter

By -

Just a quick example showing not to rely too heavily on patterns. Below is URE (the double-bullish on real estate ETF) with three nice inverted head and shoulders pattern. On one hand, yes, there was a lift in each of these instances, but on the other hand, the lift was either very short-lived or, if it did persist, was choppy and not especially profitable. Past behavior on specific instruments with certain patterns can be helpful in anticipating what subsequent patterns on the same instrument will do in the future.

0320-ure

Wave Analysis of USD (by Avi Gilburt)

By -

If you listen to many of the market analysts discussing the dollar and its relationship to the metals, or to the equity markets, it seems as though there is much confusion. The confusion is due to seeming “correlations” between the dollar and “risk” assets that are no longer holding true. In fact, many were expecting that a rally in the USD would coincide with a decline in metals and the equity market. But, we have recently been witnessing a break within these correlations.

It is for this reason that I continually stress that each chart MUST be analyzed on its own, and it is faulty analysis to base a significant amount of your analysis of a particular chart purely on what another chart is doing. This leaves an analyst in a befuddled state when the seeming correlations disappear just as easily as they initially appeared. This is what is now happening to many in the financial world, as they scramble to figure out what is happening.

(more…)

Elliott Wave Mad Libs

By -

Editor's Note: I will be away in {major U.S. city} at the {financial noun} Show the rest of the week, so Sparky will be doing the update on Wednesday and Friday. See you next Monday!

The wave status remains {descriptive adjective} to us and shows {small integer} waves from the {name of month} low. The market has been in a {uppercase letter} wave pattern with a rare {geometric shape} terminal wave that is in the {superlative adjective} stage of completion (EWT, page {double-digit number}).

The explosive and unprecedented rally from last October is a {three lowercase letters} terminal wave. This is key since {ordinal noun} waves are always ending waves.

Sentiment has reached another extreme with over {high double-digit integer}% of respondents bullish, a level not seen since last {month name}. Measured in "real money" terms, equities have actually been in a bear market since 2000 ("real money" defined as the ratio of the Dow Industrials to the price of {noun of perishable grocery item}).

The rise in {noun: metal} has been a {three hyphen-separated single digits} wave, so it's most likely next move is {directional adjective}, indicative of a {ordinal} of {higher ordinal} wave.

We will keep you apprised as the waves continue to unfold and reveal themselves.

A Load of Bull (by Springheel Jack)

By -

I was hearing a lot of comments yesterday about how the current bull move is unstoppable on every timeframe, and that we could only see a pullback when every last bear had capitulated. What garbage. Nothing goes up in a straight line, and every trend has pullbacks. They may be shallow but we will see them. It may well be that those pullbacks will just be deeper dip buying opportunities but they will come. I don't see much to suggest that a major top is near here, and I'm leaning bullish into May, but there are always some bumps in the road. As far as I'm aware there are also no recorded historical instances of every single bear capitulating on any bull run in a free market, so I would advise against anyone holding their breath waiting for that here. 

(more…)