Slope of Hope Blog Posts

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Four Grumpy Bears

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Well Monday was all set up for the bears, and they blew it. Yesterday was all set up for the bulls, and they blew it too. Of the two the bulls blew it worse in my view, and I’m going to review the very nice topping setups here on all four of the main US indices that I follow.

The first two are SPX and Dow, and on these two there are remarkably similar sequences of three nested double-tops with ultimate downside targets at tests of the broken 2007 highs.

On SPX the first thing to mention is very strong support at 1864, with both the daily middle band and the 50 DMA at 1864 at the close yesterday. If that should break then the first and smallest double-top support level is at the 1850 low. A break below that should be the start of a slide down this series of increasingly large double-tops down to a target in the 1578 area, effectively to retest broken resistance at the 2007 high. That might not all play out of course, but I did mention this target as possibility last summer as it is the obvious technical target for a big retracement here to set up the next big move up. SPX daily chart: (more…)