Slope of Hope Blog Posts
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Further to my last weekly market update, here is a summary of where money flow ended for Week 2 of June 2012.
The Weekly charts below of YM, ES, NQ & TF show that they all closed higher (and on higher volumes) than the prior week. I've added a downtrending channel to the charts this week…price closed at the top of this channel on the YM & ES, and just below on the NQ & TF. Price has moved above last month's Volume Profile POC (yellow horizontal line) on the YM & ES, and closed on or near to it on the NQ & TF. All of them are still trading below their middle Bollinger Band on this timeframe. The YM & TF are still trading below their 1-Year Volume Profile POC (red horizontal dotted line along the right edge of the charts), at its POC on the ES, and above on the NQ.
I'd like to see increasing volumes continue on any advance beyond their closing prices to confirm any potential sustainable breakout and hold above this latest downtrending channel, above the middle Bollinger Band, and, subsequently, above the 1-Year Volume Profile POC…otherwise, look for more volatile and deep intraday swings, and possibly a new low for 2012.
And so ends the week! It's pretty clear that bulls are anticipating a "heads I win, tails you lose" kind of week next week. If the Greek elections go against the bulls, then the central bankers will bail them out. If the Greek elections go with the bulls, well, that's a win for them too. We'll see.
I've made my positioning clear: 50% cash, with the other 50% divided between about 25% longs (energy & commodity) and 75% shorts (tons of little bitty positions). I've also put all – yep, 100% – of my personal options account into GDX puts.
Try to slam down a martini or two to prepare for next week. We're all going to need it.
I wrote about SM Energy late in May when it was around $60. I pointed out its diamond top and suggested it as a good short opportunity.
Well, it’s fallen very hard since then, and I’m thinking it might actually be a great bounce play. A stop at 45.05 makes sense to me.
We all face risk as traders. No one knows what a day is going to bring (unless you are one of the big banks, in which case your profits are assured by government fiat). But for us little guys, we have to do the best we can with the tools and skills available to us.
The week ahead brings more risk than most weeks. I won't even go over what the risk events are; you've heard them all countless times. Suffice it to say that it's going to be wild, dangerous, and – at times – scary.
FYI, there have been a few recent bearish "Death Cross" moving average formations on the Daily timeframe, as shown on the chartgrid below. They are: