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 Crumbling VIX
The $VIX is a curious creature to analyze, since it is such a different beast than most other kinds of charts. To get some fresh perspective, let’s look at some cruder granularities of this sentiment measurement.
First, let’s look at it from a quarterly perspective going back a third of a century. As you can see, the spike we enjoyed in volatility is very prominent, being the third-highest peak in this entire data set. The “Liberation Day” excitement (which feels like, oh, about 70 years ago at this point) was all too brief, but now the VIX is once again at an extraordinarily dull mid-teens level where it typically slumbers.
A Worrisome Stand-Off
I wanted to highlight one particular index which has me concerned (as we ‘celebrate” two months of the market going straight up since April 7th): the Russell 2000. What we have here is a bearish setup (pink) and a bullish counter-setup (green) that are about to go to war. The $RUT broke to a new counter-trend peak on Friday, completing and pushing above the bullish pattern, and if there’s enough power to push the index above the dashed red line, well, God help us, quality of life for equity bears is going to recede from a “2” down to a “1”.
Looking at the Semis
Perhaps the cleanest setup for a hard fall among all the indexes I am examining is the semiconductor index, symbol $SOX. It still has a little more potential upside before it hits its resistance trendline, but tagging this trendline is not a necessary prerequisite. The point is that there’s much more downside risk than upside opportunity at present price levels, and virtually all of the power behind the last two months of ascent is predicated on the continuation of AI Fever.
Energy Update
Crude oil has continued to fight its way higher, and it’s become dangerously close to violating an important resistance level. I want to emphasize “close to”, since it hasn’t done it yet, but it merits close monitoring.
