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.

TLT Correcting

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This tight index range over the past week has been the hot topic of discussion lately as to the direction from here, but I think I see something here that is worth noting.  Whether because its too crowded of a trade or some other reason, I see TLT as being likely in for more weakness over the coming couple of weeks after which, I think we may have a VERY nice shorting opportunity in equities.  Maybe.  First, check the TLT chart.

TLT trend analysis - Aug 13, 2012

The following points I would argue are facts.  After that, we can interpret them.

1. The TLT uptrend was very strong, then it lost momentum in June and July.
2. It broke its four month uptrend line at the end of July.
3. Short-term, TLT is still making lower highs and lower lows and intermediate trends begin as short-term trends.
4. TLT has gained 22% since its March low and could probably use a decent correction.
5. In the last couple of weeks, the USD has pulled back and defensive RS has also begun to let up indicating a slight unwind of the defensive play.  This is a BIG confirmation of the bond weakness signal.

With these premises, I turn to my channels using the major intermediate pivots.  Coming off of the July high, you have to look for a mirror of that line.  TLT gapped through it and now I see that it is finding resistance at the lower channel line very consistently.  Therefore, I see markets rallying not so much as a great desire to buy, but just as a reaction to the bond selling.  The money has to go somewhere.  I see TLT making a 50% retracement to the last major resistance breakout at $120 before we get any change in trend.  This will also allow the equity indices to test the top of their respective channels.  Good "carefully calculated probabilities" to you, Folks.

Euro Reverses Up (by Springheel Jack)

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I was leaning bearish for the last three days last week, and while SPX didn't go up, it didn't go down either. On Friday morning there was a very promising break down through a decent short term trendline that had developed. That was quickly reversed, and overnight that recovered trendline has held as support. A rough triangle has formed over the last few days and we may well now see a break up through triangle resistance. If that holds then trendline resistance is in the 1413-5 area and we may well see that tested. Triangle support is in the 1397 area:

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