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.

Schrodinger’s Pumpkin

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I posted a chart on twitter last night showing the falling megaphone that formed during the day and the triangle that formed and broke down near the close. What happens to a short term pattern like this overnight? Well that rather depends on where the open is the next day. If there is no gap then the pattern will often play out as though it had never been interrupted. If the market gaps away hard then the pattern becomes irrelevant.

Back in the old days you’d have to wait until the open to find out whether the pattern was a fine carriage or just a pumpkin, but nowadays the futures can tell us which is more likely and this triangle, sad to say, is going to be a pumpkin.

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China’s Shanghai Index: The Falling Knife

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Further to my post of June 8th, here’s what has happened, since then, on China’s Shanghai Index.

After making a slightly higher high of 5178.19 on June 11th, it has since plunged to a low today (July 8th) of 3421.53 to close at 3507.19…slightly above its 200 Day Moving Average — making a loss of 1671 points from high to close, thus far.

The first level of major supports sits around 3000…the next around 2500…a solid break and hold below 2000 could cause major panic in markets around the world.

So far, attempts by the Chinese Central Bank to intervene and stop this falling knife have failed…we’ll see if this market can find any stability at any of the above-noted levels. There are no “buy” signals at this time on the RSI, MACD, and Stochastics indicators — rather, they are still bearish, although quite oversold; however, the extreme bearish force of the MACD, in particular, should be respected, as we could, very well, see much more selling in the short term.