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.

Mind The Gaps

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I was saying in our monthly public Chart Chat at theartofchart.net yesterday that the kind of setup we saw at the close on Friday sometimes resulted in an opening gap through support, and we have seen that on SPX this morning. If you’d like to see that the recording is posted on this page here.

This is a potential breakaway gap down and that is potentially very bearish until the gap from Friday’s close at 2383.12 is filled. Below there is strong gap support from 2363.64 and a break below that opens lower targets, with the first of those being the next open gap below just under the possible H&S neckline in the 2352/3 area. The main trendline target now is larger rising wedge support, currently in the 2336 area, but we would usually some a topping pattern for to take SPX lower, and I don’t see one yet. The hourly RSI 14 sell signal is not close to making target. SPX 60min chart:

170306 SPX 60min

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A Broad Look at the Market

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A number of days ago, Dutch commented how there’s nothing bearish-looking about the stock market. This permabear has to agree. Of course, this is not to say I’m buying stocks – – you know me better than that! – – but there certainly isn’t any core failure going on that I can point to as evidence that all holy hell is going to break loose.

Let’s take a look at a few charts. First of all, here’s the Russell 2000. As you can plainly see, it has been in a solid channel uptrend ever since the February 11 2016 bottom. We are getting close to the midline of this channel. This is somewhat similar to the position we were in during the couple of months preceding the election. Our friends in Gainesville keep talking about a Wave 4 that’s about to hit, and I’m inclined to agree (but that’s just my book talking).

0304-rutbig

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Wasn’t The Dollar Supposed To RISE On A Rate Hike?

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The dollar has been one of the biggest contrarian trades I have seen in years.  Every time the market is so certain about the direction it will run, it does the exact opposite and often in extreme fashion.  In my last weekend update, I noted how we called the multi-year rally off the 2011 lows when the market was expecting the dollar to crash due to all the QE.  And, I also noted how the dollar has been moving down after the Fed has raised rates, despite the common expectations that the dollar should rise.

Some days, if you listen really closely, you can almost hear the dollar laughing as it moves “unexpectedly.”

The same has happened with the Chinese Yuan. Recently, China spent 1 trillion US Dollars (a quarter of their FX reserves) over the past 3 years in an attempt to prop up the Yuan. However, the Yuan still lost close to 14% of its value against the USD over this time period.  Moreover, our lead analyst of our Forex Service at Elliottwavetrader.net, Michael Golembesky, appropriately advised a short in this market despite the Chinese “intervention.”  In fact, Mike and I wrote several public articles on this potential trade.  And, as you know, he has been quite successful in that trade, even though most others in the market would not consider such a trade in the face of the unprecedented action by the Chinese government.

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