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.

Comparing Recent Price Action on the Four Major Indices (by SB)

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Below are several charts comparing price action among the Dow 30, S&P 500,
Nasdaq 100, and Russell 2000 Indices.

The first chart shows the price
action over the past three days, beginning with Friday's big decline. With
yesterday's and today's (Tuesday's) combined bounce, the INDU and SPX
have closed higher than Friday's open, while the NDX and RUT are still
below.

The next
chart shows yesterday's and today's bounce. The RUT is leading in terms of
percentage gained over the past two days and is the one to watch to see if this
leadership holds on any further rally, or if meaningful weakness enters that
could, ultimately, drag the others down.

The NDX was the
weakest on the two-day bounce, perhaps because of AAPL's relative weakness,
which is reflected in this year-to-date Daily ratio chart comparing AAPL to the
NDX (the Momentum Indicator is still below zero as price struggles below
resistance)…also, two important ones to watch for either a strengthening or
for further relative weakness, which could lead to the resumption of a decline
in both.

ABT Short

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ABT daily

ABT looks like something straight out of a book on technical
analysis:  First, prices became overbought and an extended move up
within this large ascending channel with negative divergences on the
MACD and RSI put in place at the recent highs.  After forming a very
bearish Evening Doji Star candlestick pattern around the highs (with the
doji kissing the top of the channel), prices then made a large gap
below the bottom of the channel. 

ABT went on to set up in a very clean
bear-flag pattern just below the channel and a solid break below that
pattern would likely spark the next wave of impulsive selling.  Note how
the pattern measurement for the bear-flag lines up nicely with my third
target, which I had added before adding the pattern projection. Nothing
is 100% in trading but from a charting perspective, it just doesn’t get
much better than this.

I will consider ABT an active short at the open tomorrow unless the
stock opens above today’s close of 65.04, in which case I will wait for a
confirmed break below the flag pattern.  Those targeting T3 might
consider a stop not far above the 66.80 area while a stop slightly above
the 67.60 area might be more suitable those targeting T4 (my preferred
swing target).

SPX Weekly & Equity Put/Call Ratio

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The S&P 500 lost 1425 and this chart from NFTRH 210 shows why
this former support level is important.  Get above it and SPX is off to
the bull races; stay below and be subject to the next level of support
at 1375, which is the current target based purely on technicals.

spx

The US presidential election is a big wild card in the middle of the
analysis right now, but the raw technicals say that any negative
reaction to the election had better be contained at 1375 or else the
near term bullish phase – that remains intact with a series of higher
highs and higher lows out of 2011 – would be under threat.

The lower panel shows the Equity Put/Call Ratio’s 1 week moving
average.  The green dotted lines show that it tends to make a higher low
into significant tops, which have come three times within the bull
market out of 2009.  This is a warning sign on the SPX that while the
bull trend is technically not over until it makes a lower low beneath
1275, a lot of damage could happen if the correction gains momentum.

So it is critical to the bull case that SPX get above 1425 and failing that, hold 1375.

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