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.
The market has been climbing relentlessly higher since the March 2009 bottom. Last week I discussed the drivers of this movement, and this week, I will discuss the four remaining tools/events left to push the market onto new highs.
The price of oil, oil is the lifeblood of our economy, and acts as a tax when it rises, and a regressive tax at that. Lowering oil prices will provide a growth story to the markets. It is clear, at least to me, that the price of oil is being elevated in the paper markets, while the fundamentals are supporting lower prices. If I were a Central Banker that can control the paper markets, and need a cheap boost to growth without using up my spare monetization dollars, I can flood the market with naked short contracts and drive down the price of oil.
The Saudis today are reducing production, they are doing this because they see a glut coming, and are trying to get ahead of it. The U.S., Canada, and Iraq all increased production last year, and are on tap to increase it again in 2013.
With the “almost” new high on the SPX we are
slowly moving into my much awaited target zone of 1480-1500SPX. I have been
tracking a potential ending diagonal on the SPX and with some of the other US
markets showing similar patterns, I knew sooner or later the SPX would need to
play catch up.
As usual those that forced 3 wave declines as 5 wave moves
got run over as the markets have rallied back to test the Sept highs. For me it
was a no brainer, the European markets had exceeded those highs some weeks back
and one by one markets like the RUT, XLF, and NYSE exceeded those highs,
it wasn’t going to be long before the major indexes in the US played
The DOW and the COMPQ are still behind their respective 2012
September peaks, so with approx 200 DOW points needed to exceed that Sept 2012
peak, the SPX probably pushes a bit higher towards 1500SPX.
You don’t need to be an Elliottician to notice the bearish
looking wedge shape seen in many US markets, just pull up a chart of any of the
major markets such as RUT, XLF, NYSE etc to see this shape.
Most of the US equity indices are looking short term toppy to me here. On SPX the intraday high on Friday was just two points below the test of the September high. We may well see that high at 1474.51 tested today. Daily middle bollinger band support has now risen to 1441: