Slope of Hope Blog Posts
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Could it be that finally the under-owned and despised gold miners are catching the elusive bid? Could it be that the miners finally are playing catch-up with the relative strength of bullion — in an economic environment that still requires central bank printing presses to work 24/7 to elicit a glimmer of growth?
Although the Market Vectors Junior Gold Miners ETF (GDXJ) must hurdle and sustain above heavy resistance between 20.50 and 21.55 to confirm that a major bottom has been established, the May-June basing action has the right look of something "special" in its early stages.
Originally published on MPTrader.com.
I don't like the looks of this structure. It does not look like the type of strong accumulation that turns into a large trend. Look at the 3yr SPX chart. Every major pullback that lasted took off strong for a couple of weeks at least (see lines drawn in just above the volume mirroring the trend). Any that were choppy resulted in new lows.
There is also strong evidence for the market's "QE/No QE" tendency over the past few years. The markets in general haven't done well without the Fed constantly priming the pump. Also, the "weak" months of the year have certainly held up strongly the last few years. May to the end of September have been dominated by selling.
Add to that that multiple indices have rising wedges in them and that we are currently at the top of the wedge/channel with a strongly overbought McOsc and it would appear a pullback is imminent in the next week or two, possibly to new lows though that seems unlikely. If 1310 goes, I'll be seriously considering it.
Of course, since anything can happen, the uptrend could continue, but I think the evidence weighs against it. One major difference between the last two summer sell offs and now that could be a positive or negative is that 2010 and 2011 were very bearish during their choppy ranges while this June's chop doesn't seem to have the same "the world is about to come apart" mentality to it. Either that is positive and the market is going to chop/base some more or this is a negative sign that the market is not quite bearish enough to maintain the bottom yet. Good trading to all.
OK, folks, the market is giving us a mini-weekend in the middle of the trading week. I'll probably do a video post later. Go get those ribs ready for tomorrow!
I’ve gotta say, that I am somewhat surprised by the fact the market is moving this morning – albeit a little over 5 points, but honestly I thought it would be a total snoozer today. I’ve taken the opportunity to add Home Depot (HD) at $51.50 and Netflix (NFLX) at $70 flat.
What’s funny is that both of these stocks have not been on my “A-List” of preferred stocks to trade (if I were to actually keep one) since in the past, my results with these two names have been a bit mixed. Nonetheless, a trade is a trade, and I try not to get caught up in the emotional attachments I might have to a particularly company or brand-name.
Long: Home Depot (HD)
Long: Netflix (NFLX)
Check out Ryan’s Blog at SharePlanner.com