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I spent a lot of time recently looking at the long-term index charts. We’re all familiar with the history of the Internet Bubble and the Housing Bubble. How gigantic they were, how they were fueled by puffery or outright lies, and how the housing bubble in particular was made possible through completely bogus credit ratings. Both of these prior bubbles were powered by Alan Greenspan and his multi-trillions of largesse, and they both had historic wipeouts.
But what struck me – – really, really stuck me – – was how PUNY those two bubbles were compared to the ascent we’ve seen over the past nine years. I mean……..just look at this!
There are a couple of seemingly unrelated events approaching. First, in a few weeks, there is the 17th anniversary of the terrorist attacks of September 11 2001. Second, it seems nearly inevitable that Amazon will become the world’s second trillion dollar company, following in AAPL’s footsteps. I guess they are going in alphabetical order.
I was curious what the cheapest price Amazon was after the Internet bubble burst. It turns out it was on October 1, 2001. I was struck by that date, because it was so soon after the attacks. I decided to look at what Amazon did when the market reopened after the attacks, and I’ve tinted it below. As you can see, it’s pretty much a blip. Within a couple of weeks, it got down to $5.51, and it hasn’t looked back since. (It’s approaching $2,000 now).
OK, I’m so sooooooooo sorry to mention it again, but I am absolutely crazy about the new Arc drawing tool in SlopeCharts. I’ve been spending the entire morning sexing up my charts with these things. You’ve got to try them out!
Gold is taking a bit of a breather after earlier climbing to a new recovery rally high at $1220.70 in the December futures (GC), a full $53.60 and 4.6% off its August 16, 2 1/2-year low at $1167.10.In a very bullish set-up, gold (GC) should digest recent gains above the $1207 area, where the 5 DMA has just crossed above the 20 DMA. However, if $1207 is violated and sustained, then we should expect gold to press into a deeper correction of its $53.60 rally, towards the $1195-$1190 support zone, which MUST contain the weakness to avert a complete retrace of the August advance.
If either the shallow ($1207) or deeper ($1195/90) corrections unfold, the subsequent upleg will point to $1250.00. (more…)
I am pleased to let you know of another improvement to SlopeCharts: arcs.
Rounded tops and rounded bottoms are very important basic instances in the world of charting. Intel, for example, shown below, has a very well-formed saucer pattern, but until now, it wasn’t really possible to highlight in SlopeCharts. You could use the rectangle highlight tool, perhaps, but that’s not really the right shape, or you could, as I did, just drawn some carefully-placed trendlines: