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.

The Oil Top

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Well, happy weekend Slopeland!  I hope it has been a good start to 2022 for you.  It has certainly been an interesting and profitable year thus far, which brings me to today’s post.  I try to compose posts around what I perceive to be key turning points in markets, and I think our current market qualifies.  Today, I want to try to bring some closure to what has been my baby of late… crude oil.  I will also discuss interest rates, and the outlook for the S&P 500 for the remainder of the year.  Let’s take a look!

Below is a one year chart of the monstrosity that has become crude oil.  I have been heavily involved in the energy space for nearly two years now, coming off the Covid crash low.  On Monday through Wednesday of last week I sold off all of my energy-related positions.  Why did I do that, and what do I think is ahead for the oil market?

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The Power of 200MA Breadth

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“Nothing good happens below the 200 day moving average.”

The 200MA is the institutional favourite for judging the worthiness of a stock for buying (or so I’m told). But what happens on an index level when an overwhelming majority of stocks are above or below this moving average?

Well, let me show you.

Below I have one of my recent studies encompassing 2000 through 2021. I used the Percentage above 200MA breadth and divided it into thirds at 33% and 66%. In this way, if the Percentage above 200MA is greater than 66% then there are 2:1 in “strong” condition and likewise, below 33%, there are 2:1 in “weak” condition. Note: the lower line in the charts below is at 40%, but after some thought, I decided an even third would not change the results much (but I’m not going to remake the charts for this small adjustment).

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