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.

Decision Time (by Springheel Jack)

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There have been two main schools of thought on the bull side over the last few weeks, and the first expected that this retracement would be shortish, and would be followed by a wave 5 move to take equities to new highs and an interim top before a much bigger summer retracement. The second have been expecting a much bigger retracement now, probably taking us through May and slightly beyond, before a big renewed push up in the summer. We are most likely at the point of decision between those two scenarios now. A break up should deliver the first scenario and a break down may well deliver the second. I should stress that I've not entirely discounted alternative bear scenarios, but unless we see a clear topping pattern followed through to below the 1292 SPX October high, it's not worth spending much time on these IMO. 

As I suggested was likely yesterday morning, SPX pushed up to test the highlighted strong resistance area and the last bounce high, and has reversed there so far. A break over 1396 will trigger a double bottom (and arguably IHS) target over the last high and the obvious next target not far above there is the 1442 pivot level. Short term there is significant negative divergence on the 15min RSI and that is a strong signal for reversal UNLESS we have started a new impulse wave up. If we see weakness today I'm seeing strong support in the 1377 area, and a move below there would weaken the bullish scenario here:


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The Picture Clarifies

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OK, it's a new day, and it's light-bulb-over-my-head time!

For weeks now, I've been confounded at how I've had to keep inching up the horizontal line that delineates support & resistance on the ES. This line has been around 1390, but I had to keep monkeying around with it to make it legitimate. And monkeying around with anything means it's not legitimate.

After last night's umpteenth instance of going a little higher than before, the ES finally made its path plain to me. It's not a horizontal line at all, but a moderately ascending line, that defines this resistance. Thus:

0426-es

I feel better now. And, after all is said and done, that's why we're all here, isn't it?

The Dollar/Euro Conundrum

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Since my last post regarding the USD and oil relationship here  I have been watching the USD with great interest.  Problem is, I see the same pattern in two different time frames and they seem to conflict with eachother.  I've added the Euro as a comparison.

USD Euro conundrum
Which direction will win out?  For now, the channels are intact and the longer-term lines should be expected to hold until they don't.  Together with the re-emerging bond market issues in Europe, I expect the USD to break out and the Euro to break down, but as always, we'll see.  The Euro suggests that a break is imminent while the dollar looks like it could go another month before it has to break.  Until they do, I imagine the equities markets will be choppy and a tad difficult to read.  If you're an intermediate or longer term trader, it might be safer for capital to just sit tight until these markets show their hand.

The Dirt Under the Carpet

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With today's Fed announcement out of the way now, we see that no new Fed monetary easing programs are underway.

Instead, the U.S. is still left with this…their growing national debt. This is something that the Fed cannot solve…it's up to the politicians, and, still, I've heard nothing this year that leads me to believe that any part of this is being tackled. Instead, it seems to be the dirt that is lingering under the carpet, never to be dealt with until, perhaps, after the November election, or, perhaps, not at all.

With issues such as declining Durable Goods Orders and Core Durable Goods orders since 2001 and 2002, respectively, as shown on the graphs below (data released on Wednesday), declining consumer optimism, and housing numbers still at 2009 recessionary lows, I would have thought that politicians would have acted more responsibly to reduce the debt while finding measures to stimulate their economy. 


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