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.

Back to the “Mean”

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Where is Oil headed? A clue may lie in the AUD/USD forex pair Weekly chart. 

As you can see from the three Weekly charts below of the Commodities ETF (DBC), AUD/USD, and Oil, the Aussie $ closed above 1.03 on Tuesday, and price now sits just above a confluence of its mid-Bollinger Band ("mean"), the 50 sma (red), and a price apex level of 1.0274 (which also happens to sit near the left shoulder of a potential large and unwieldy Head & Shoulders formation). It's important that this confluence level hold as support in order that the Aussie $ may continue upward to, potentially, its upper Bollinger Band or higher.

Price on Oil sits just below a Fibonacci confluence level of 90.18 and just above the bottom of a large uptrending channel. Should the Aussie $ continue to rally, we may see Oil reach its "mean" at 94.89 (which is also a confluence of the 50% Fibonacci retracement level, the mid-Bollinger Band, and the 50 sma) or continue higher to, potentially, its upper Bollinger Band.

Furthermore, it wouldn't hurt to see DBC hold above its mid-Bollinger "mean" and continue its trek up to its confluence level of 27.47 or higher in support of these moves.

A failure to move higher on one of these three could well negatively influence the others…worth watching all of them to see if any weakness develops.

Colored Glasses

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Over the weekend, I shared this chart with a simple question, "Does this look buyable here?"  The idea was to strip it of all indications other than price to evaluate what others would see.  If you haven't seen it, take a good look and decide for yourself, "Does it look buyable here?"

Symbol - July 16, 2012
All the responses I received all basically said that it should be expected to go lower.  I did not receive a single bullish argument for it and that the trend was down.

  Now let's put this chart back in its natural habitat…and flip it vertically.

Identity Revealed

Now if you were sure that the trend was down in the first chart without any news, or indicators, or fear, or greed, the chart in context is actually bullish until proven otherwise.  If your evaluation is the same in both charts, you can be sure that emotions are likely getting in the way somewhere.

The point of this post is only to give us a fresh look at the current market and some reflecting points for our own self evaluation, not to argue for direction.

Follow-Through Needed

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Further to my posts of July 16th and July 17th, here's how the current 3 days/candle closed today on the Major Indices.

On the 4 equity indices, we need to see further strength enter on the Nasdaq 100 and the Russell 2000 in order to support any further rally on the Dow 30 and S&P 500.

On the 3 Dow indices, we need to see further strength enter on the Dow Transports in order to support any further rally on the Dow 30 and Dow Utilities.

Unless we see further upside continuation on all Major Indices, we'll likely see an ultimate failure of the recent upward sloping channel which begins at the June lows, with a potential move lower than those lows, as these markets are looking tired, laboured, and choppy.

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Negotiated a Buy Price of $644.80 (by Ryan Mallory)

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Priceline-negotiator-deadI ended up taking a long position in Priceline (PCLN) and now I'm forever cursed the rest of the day with the "Price.Line. Neg-o-ti-a-tor!" theme song. 

The two things about this trade that interests me most is the breakout of the 3-day consolidation pattern of late, and the solid amount of price(line) support at $630. 

So I took a long position at $644.80, with a target at $681 and a stop at $630 (when the share price is this high, I don't fret about exact pennies). 

Here's the Trade Setup in PCLN. 

 Priceline PCLN

Be sure to check-out Ryan's Blog at SharePlanner.com

Market Action During Bernanke

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I have a couple of remarks to make about the morning's action, so far, during Mr. Bernanke's testimony before the Senate Banking Committee.

Further to my post of July 16th, a near-term support level of 483.00 has been re-tested and is holding, so far, on the Utilities Index, as shown on the 15 min chart below…one level that I'm watching relative to weakness/strength on the other Major Indices. Near-term resistance of 485.60-486.00 lies overhead and would need to be overcome in order to push the other markets higher.

The low and high of the recent small "diamond" pattern on the SPX:VIX ratio pair have been re-tested this morning as shown on the 60 min chart below…price now sits at the next resistance level of 83.93…the next hurdle for the SPX to overcome if it is to resume a rally.

 
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