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.
Anyone who follows oil (or at least tosses it a side glance from time to time) knows that it has been stuck in a tight range for 2-3 months now. Following the “laws” of price action, expansion gives way to congestion and congestion gives way to expansion…eventually.
Before I get into the Trade Idea, I’m going to review the context of the S&P500 from a structural standpoint and a typical deviation standpoint. First of all, structurally, the Weekly and Daily charts show higher highs and higher lows, the very definition of an uptrend. In November of 2016, the SPY completed a $20 wide trading channel of which currently price is a stone’s throw from its high resistance. The channel would suggest that buying potential is limited.
Now, anyone who hangs around the comments has seen that I use 5% simple moving average envelopes around a 100MA as a measure of movement potential (oversold, neutral, overbought). Where are we now? Yep, hit it on Friday. Again. (Click on any chart to see a larger version).
So as I’m sure everyone noticed, price sped up a bit this past week. It might have taken some of us (including myself) by surprise, but in the bigger picture, ever since Nov 9th kicked this rally into full gear, price has been fairly relentless ever since. Just take a look at the 100MA deviation envelopes.
Here is a 5 day timeframe of a 1 minute chart of SPY vs the VIX.
Don’t be a sucker (attn: bulls).
I’ll have another post to write up after today. There have been some very interesting developments today indeed.
You may recall my previous post after the initiation stage of the Trump Rally here which was about a week after the election. I shared the likelihood for forward trade was in a flat to up trend, but that there was a lesser chance of a large drawdown if price did reverse. I have a little more context to it now so I thought I might show you what I’ve found.