Slope of Hope Blog Posts
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Recently I have gotten wordy about the decline in ‘inflation expectations’ beginning on June 2, right on through yesterday’s update of the TIP-TLT ratio and TLT in essence, attaining their targets. The implication would be that the mini deflation whiff is coming to its limits.
As often happens at potential limit points, the market’s crosscurrents are strong. As noted yesterday, USD, gold, silver and the gold miners all did in-day reversals as items that had been risk ‘off’ got hammered. ‘What, USD and gold in lockstep? What is the meaning of this?!?’ think inflationists. See yesterday’s in-day post Strange Bedfellows.
The meaning is that these items, along with the VIX and US Treasury bonds have been plays for a risk ‘off’ market as it got the jitters over deflation. Gold miners had been, however fleetingly, rising in line with their counter-cyclical fundamentals and this is the mirror image to the reasons why I so often parrot that if you are a gold miner bull, at least realize that fundamentally at least, the sector is done no favors in an inflationary backdrop (price, for long stretches of time, can be something else all together).
I don’t really trade FOREX, but I watch those charts closely. I find it interesting how cleanly the Euro has been trading. Below I’ve put the symbol FXE (which is the ETF for the Euro), and as you can plainly see, there are two sets of parallel ascending channels that have been bounding the price action. It’ll be interesting to see how the Brexit (should the vote actually transpire) will affect this, although it would seem things are tilted more bullish than bearish.
Running late today so I’m using the ES, NQ and TF futures charts that I posted for subscribers at theartofchart.net this morning.
SPX went to the 2050 target that I mentioned yesterday morning and found support there, rallying powerfully enough from there to break the declining resistance trendlines on SPX, ES and NQ, but not TF. Is the retracement over? Maybe, but if so then SPX needs to confirm with a break back over support turned resistance at 2085. The other significant resistance levels to watch today are daily closing resistance at the 5dma (now at 1975), daily middle band (now at 2089), and hourly resistance at the 50 hour MA, also at 2089.
ES Sep 60min chart: