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Well, I might as well succumb to World Cup Fever, which has affected even Slopers. Hence, the subject line for this post. Anyway, I just wanted to share a few thoughts on a handful of charts before calling it a day.
First, the Dow Jones Composite pretty much tells the story – – – last week’s dip was simply “the pause that refreshes”, and since it failed to break the supporting trendline (the dotted green one), we are still in the same Bull Mode that we’ve been in since John Kennedy was in office and color televisions in every home was just a distant dream.
As I was dashing through the airport Sunday evening, I saw the cover of Barron’s, and of course my eyes went straight to the elfin figure near the center: our own Abigail Joseph Cohen, permabullextraordinaire. I dunno, I keep thinking the art director at the newspaper just doesn’t like this little woman, because she looks like a forthcoming villain from Game of Thrones.
I had pointed out Dreamworks recently as a good short-sale candidate. Today is paid off, tumbling a double-digit percentage drop. I suppose this is due to their movie, How To Train Your Dragon 2, having a disappointing opening weekend. I wasn’t banking on that, however. It was about the Fibs.
Ummm, this chart was a lot funnier (in a woe-is-me, gallows-humor kind of way) earlier when the market was surging. Now that the bulls are smearing fecal matter all over one another, it’s less relevant. All the same, I’m kind of busy, you know – trading – so I don’t have time for anything else at the moment. But please take note, this chart is already sadly out-of-date.
Friday was more bullish than I expected but resistance at 1937 held on repeated tests and if we are to see an opening gap today, then it seems likely at the time of writing that it will be a gap down. The SPX 50 hour MA is now at 1939 and is still primary resistance. In the event that is broken then main rising wedge resistance is in the 1947 area. I’m expecting more downside today however.
I think this retracement may develop into something substantial if the bears can develop some momentum, and we’ll see whether they can. At minimum though I’m looking for a test of the SPX daily middle bollinger band, which closed yesterday at 1918, and that target could be hit today. This is a target that is often pinocchioed intra-day, so it’s important not to read too much into a break below it unless that persists into the close. SPX daily chart: (more…)