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I’ve mentioned ceaselessly, both here and on the air, how “chart-friendly” crypto is. Well, that cuts both ways. The charts can tell me when they’re going up, and they can also suggest to me when they’re about to fall.
Slope is rather special in that we save a lot of intraday data, both for stocks and for crypto. Armed with this, I saw a series of intraday minute bar charts that were chilling to me. So I took my profits yesterday evening (with the exception of three positions, which I wound up closing Tuesday), thank you very much. I’ll get back in when the coast seems clear.
I have sung the praises of Slope’s virtual trading before, and it isn’t because of stuff that feels good. Over the span of just a few days, I’ve lost about 60% of my account’s value, all because of just a tiny number of gargantuan, very aggressive trades. The good news is that the $300 million in losses are all pretend! But it just goes to show that when a person is just setting the world on fire, their ego can get the best of them, and they can shoot their own virtual foot off just like in real life.
I was saying in my post last Thursday that if support was found at the levels being tested then, the next target within the rising wedge would be wedge resistance in the 4500 area, and well, here we are.
Now we are back at the daily upper band, and testing a wedge resistance trendline that has already held several times. The chances are that SPX is making another high here, setting up a pattern that can take us lower again than the last decline, so that is what I’ll be looking at today.
In terms of the wedge itself, it is high quality, with an excellent resistance trendline that is unlikely to be broken significantly unless we are going to see a bearish overthrow, not uncommon at a significant high on wedges, or unless the wedge breaks up with a target in the 6800 area which sounds crazy, but really the market went through crazy without a backward glance a while back so it can’t be ruled out altogether.