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.

2012 Roadmap (by TnRevolution)

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Happy Memorial Day Slopers!  Before I dive into the Revolution roadmap, I would like to offer my sincere appreciation to the men and women of the U.S. military.  Bravery and sacrifice are to be honored, and I thank you for that.  With that said, bring our troops home, where they belong.

Now, let's get to the charts.  I continue to use GDOW as the best overall view of what is truly going on in the markets.  From a fundamental standpoint, I would argue that U.S. markets have been skewed higher as money has fleed other global markets, fearful of currency/sovereign crisises.


GDOW is currently resting on trendline support coming up off the March '09 bottom through the October '11 bottom.  A break of this trendline, should lead to a quick impulsive move down.  Also, notice the structure of the overall decline since the 2011 top.  From February '11 through July '11, the index formed a downward sloping head & shoulders top.  It then formed a similar structure from February '12 through April '12, as the move higher off the October bottom topped out.  Ideally, what I would like to see is another similar structure develop.  Let's take a look how 2012 might play out.


What I'm looking for over the next two weeks is a break of the trendline support, and then a quick move down beneath the October '11 low.  This would then be followed by building a right shoulder through June/July '12, backtesting the trendline break as well.  A break lower out of this downward sloping head & shoulders structure would have the potential to yield a powerful bearish move, a la 2008.  Is this possible?  Let's take a look at GDX and the VIX to see what they are saying as well.


As has been well documented on the Slope by our gracious host, the GDX head & shoulders top continues its breakdown.  After making an initial impulsive move beneath it's neckline, GDX has enjoyed a bit of a bounce, moving back into overbought territory on the daily stochastic.  It is ready to resume it's fall.  Looking back at the 2008 GDX analog, I would put us around the beginning of September 2008.  From September 2nd through September 11th, GDX fell from 37.19 to 27.86.  The move was swift.  I believe GDX is signaling the same thing it did in 2008, a deflationary crisis event.

On an aside, for my view on where gold is heading once this flush is finished, I encourage you to read a post TK (and Serge) made last August.  Goldy von Moldy.


Lastly, let's take a look at the VIX.  After breaking out of its inverse head & shoulders setup, the VIX impulsed higher, and then has since moved back to ease off its overbought levels, backtesting its breakout as well.  Ideally, I'm looking for a quick move higher into the low 40's, before running into trendline resistance coming off the August/October '11 highs in the VIX.  Notice that the VIX has continued to honor it's uptrendline on the daily MACD.  A break beneath this trendline would be a red flag. 

Weekend Rambling (by BBFinance)

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Everything so far suggests that we will see a re-run of last summer.  Like last year, Europe is at the front and centre of everything. Last summer QE2 was getting over. This summer Operation Twist is at its end stage. What is new this year VS. last year is US Presidential election. More the reason for free money. I keep looking at last year’s price action and I get a feeling that the Algos are following the same program with minor variations. Even in 2011, they were following the program of 2010. In effect it is the same program for last 3 years. Take a look at the weekly chart of SPX.


Why would it be any different this year?