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 Sky is Not Falling Yet (by Avi Gilburt)

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First published Sat Oct 1 for members of ElliottWaveTrader.net:  This past week, I have been sent several “stories” that the dollar is going to absolutely “crash” on September 30th, which will supposedly cause metals to rally to the moon and beyond.  And, as I have noted in my Trading Room oh so often, we have had so many such “stories” in the past, and we will no doubt have many more in the future. But, “stories” are not what drive the market, despite the common erroneous belief to the contrary, as the sky did not fall this past week, and neither did the dollar.

Then we had further “stories” of Deutsche Bank crashing and taking the world financial markets down with it.  And, once again, all the “safe haven” gold addicts were harping about how gold was going to soar on this news.  While more and more bad news was coming out about Deutsche Bank this past week, more and more were calling for not only the collapse of the company, but also a crash to the markets and a moon shot for gold.

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Metals Correction May Continue Through September

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First published Sat Sep 10 for members of ElliottWaveTrader.net: The market action this past week started out quite strong, and raised many hopes.  However, since I do not have a clear 5 wave structure confidently developed off the recent lows, I have to put hopes aside, and view the market in a dispassionate manner.  And, that dispassionate manner sees strong potential for another drop in the complex.

Last week, I noted that I can become aggressively bullish again should we see a clear 5 wave structure complete off the recent lows.  While I can make a colorful attempt at classifying the recent rally in the metals complex as a 5 wave structure, I have to be honest in my analysis and state that, to me, it did not look like a clear 5 wave structure.  So, the immediate bullish count will only be an alternative to me at this time, which the market will have to prove to me.

That means I have moved into the current market action representing a wave ii in the larger GDX count, whereas silver and gold still seem to present as a wave 2 in wave iii.  However, should the GDX be able to strongly break out impulsively over the recent highs, then I will view everything in the heart of a wave iii higher.  This is my simplified perspective.

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Textbook Set Up in the Metals Complex

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by Avi Gilburt, ElliottWaveTrader.net

First published Sat Aug 6 for members of ElliottWaveTrader.net:  Last weekend, I prepared you for the potential set up for the 3rd wave to much higher levels in the metals complex.  More specifically, I provided you with a map as to how the 3rd wave set up would look on the GDX, should the market comply by filling in our 8 minute chart as outlined:

As long as we do not break below that support, and ideally remain over the 1.00 extension at 29.87, then I will be looking to complete 5 waves up off the recent low, which I would classify as wave (i) of wave 3 of iii.  That suggests that after a corrective wave (ii) pullback is seen, and we then break out over the top of wave (i), the market is well on its way into the heart of its 3rd wave, and targeting the 39-41 region next.

And, over the last week, the market has complied in almost textbook fashion.  In fact, once we completed 5 waves up into the top of our wave (i) target region, I sent out an Alert with a target box for a wave (ii).  On Friday, the market dropped right to the top of our target box.

While the micro count in the c-wave does not look quite complete, it would seem that the market could still see lower before this c-wave bottoms. But, as long as the GDX remains over 29, I am viewing this chart as being on the cusp of the heart of a 3rd wave break out, which is pointing to 39-41, and quite quickly.

Now, for those who will read my words and consider leveraging up to the hilt in an irresponsible manner, I want to interject reasons one should still maintain your standard risk management practices.  Set ups such as these are estimated to be about 70% probability.  That still means there is a 30% probability that it could fail.  One of the reasons this set up could fail is because all retracements in the GDX chart have been VERY shallow.  This forces an analyst such as myself to make certain educated assumptions about where 2nd waves in the structure are located (since they are otherwise deeper retracements), which can have an effect upon the overall wave count if even one of those assumptions is wrong.

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USD/CAD Key Support Approaches

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Two weeks ago I wrote that the USD/CAD would likely see more downside in the weeks ahead. At the time of that writing the pair was trading at 1.3517 some 350 pips over the low that we saw last week at 1.3166. We are now approaching an area of key support that should be key in helping to give us clues as to where we are heading in this pair over the next several months. The question at hand is whether the January top was, in fact, a major multi-year top in this pair or whether we will yet see higher levels before we can consider this multi-year top in place.

Looking at the daily chart, we notice a few different things from a technical and Elliott Wave perspective that are giving us signals we may be closing in on at least a temporary bottom. The first is that we have what we can consider a completed (or very close to completed) abc corrective pattern into the current levels. While on the smaller degree timeframes this corrective pattern would look slightly better with one more low, we do technically have enough waves in place at the current levels to consider this move off of the January highs as a fully completed ABC.

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USD/CAD – More Downside Likely In the Weeks Ahead

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Early last week we saw the USD/CAD consolidate over key support levels which was leaving us with quite a few options on the table as to the short-term pattern. At that time I noted that I was viewing the 1.3652 support level as a key signal level that would help indicate if we were indeed going to see a C wave higher back into the 1.4000 range or if we would simply continue to move directly into the lower bypassing the C wave back into those higher levels. Well, it took a few tests of this support level, but finally after the third test of this 1.3652 level we saw a sharp move lower. So with this break the big question is now what is in store in the weeks ahead?

On the larger time-frames it is clear that the top that we saw in January at the 1.4696 level was a significant larger degree top. This high hit the 338.2 extension of the initial wave off of the 2011 low almost to the penny. While the 338.2 extension is a less common extension, the fact that it came so close to hitting that fib on such a large degree does make me take notice. This is a much more common Fibonacci extension level that we would expect to see during a third wave and not a C wave.  See all the charts with wave counts here.

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