Slope of Hope Blog Posts

This is the heart and soul of the web site. Here we have literally tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. You can also click on any category icon to see posts tagged with that particular category.

EWY South Korea ETF, Proxy for Global Tech, Probing Key Support

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Many Street analysts consider the iShares South Korea ETF (EWY) as a proxy for the health of global technology, the semiconductor sector, the chip sector, and perhaps the retail electronics sector as well.

One look at my weekly chart of EWY shows that it has been in the grasp of a major correction or possibly even bear phase since its January all-time high at 79.07 into Tuesday’s low at 56.34, a near 30% decline.  This decline has retraced two-thirds of of the entire prior advance from the August 2015 low at 42.94 to the January 2018 high at 79.07. One could think that the ugly EWY performance reflected deteriorating relations with North Korea, but, ironically, relations have not been so promising since 1950! (more…)

Bullish on CAT Despite Current Correction

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About 11 months ago,I told our members to watch for a continued rally in Caterpillar Inc. (CAT).  The stock had exploded to the upside after breaking above 6-7 year resistance at 112-117.

As it resided at just above 136, I wrote:  “CAT still looks like it has unfinished biz on the upside into the 145-146 area next.”

I noted that while CAT certainly was overbought, “my work considers momentum to be in a ‘healthy overbought’ condition, rather than a divergent overbought condition. Usually a healthy overbought condition suggests that higher-highs will be forthcoming prior to the onset of a significant correction.”
CAT certainly complied with our analysis and then some, accelerating through our 145-146 target zone to a January 2018 high at 173.25.

Since that high, however, CAT has naturally pivoted to the downside into a correction that has pressed to a low so far at 129.43, or 25% beneath the January high. The weakness coincides with current realities and ongoing uncertainties about trade with China.  (more…)

Yield Positioned for Upside Acceleration

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Ten-year Yield has climbed to a new post-July 2016 (1.32%) high at 3.17%, the highest yield since July 2011, over 7 years ago!

From a technical perspective, today’s surge above May-Oct 2018 resistance at 3.11% is a reaction to very strong recent data showing strong ADP Payrolls for September (230,000 vs. 185,000 expected), and impressive ISM Non-manufacturing data across the Headline data (61.6 vs. 58 expected), as well as the sub-surveys in Business Activity, Prices, Orders and Employment for September.

With 10-year Yield perched at new 7-year highs at 3.17% ahead of Friday’s BLS monthly Jobs Report, the set-up for Yield is positioned for upside continuation and acceleration. (more…)

BABA Follows Negative Technical Path

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On August 22, when BABA reported strong earnings, I noted to members that “lousy technical price action” saw the initial 4% gain in reaction to the news give way to a 5% downside reversal.

I wrote: “The interesting aspect of the downside reversal is that the intraday high smacked into key resistance at the June-Aug resistance line AND the horizontal 200 DMA, both in the vicinity of 186.60. This is very negative technical action, and indicates to me that all of the action in BABA from the 8/15 low at 165.39 to today’s high at 186.50 represents a completed recovery bounce, and the initiation of a new downleg that should break the 165.39 low, which could unleash a very powerful decline towards 130-125. Last is 174.35/50.”

Fast-forward to Monday and today (September 10 and 11), and we see on my big-picture chart of BABA that it has broken down to a new reaction low at 152.85 so far, continuing last week’s decline that sliced below a MAJOR year-long support zone at 164.25 to 166.60 (indicated in our 8/22 discussion). (more…)

Are Bitcoin and Gold Bottoming?

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Bitcoin plunged from 7385 to 6830, or 7.5%, Wednesday in reaction to a Business Insider report that Goldman Sachs has decided to drop a year-ago decision to create a crypto-currency trading desk.

Apparently, Goldman is “uncertain” about the regulatory environment. Hmm, really? Since when has Goldman shied away from forging a new path while it influences the architecture of a new regulatory environment?

Be that as it may, let’s notice on the attached chart of September Bitcoin that the reaction to the report triggered a plunge that traversed the entire width of the bullish one-month price channel.  But the weakness in and of itself has not (yet?) inflicted serious technical damage to the upmove from the August low at 5850 to the September high at 7415. (more…)

What’s Next for Gold?

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Gold is taking a bit of a breather after earlier climbing to a new recovery rally high at $1220.70 in the December futures (GC), a full $53.60 and 4.6% off its August 16, 2 1/2-year low at $1167.10.In a very bullish set-up, gold (GC) should digest recent gains above the $1207 area, where the 5 DMA has just crossed above the 20 DMA. However, if $1207 is violated and sustained, then we should expect gold to press into a deeper correction of its $53.60 rally, towards the $1195-$1190 support zone, which MUST contain the weakness to avert a complete retrace of the August advance.

If either the shallow ($1207) or deeper ($1195/90) corrections unfold, the subsequent upleg will point to $1250.00.
(more…)

A Rumbling Below the Surface for US Dollar?

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Today is all about Fed Chair Powell’s Jackson Hole Speech at 10 am Eastern, but from a market perspective, we might want to keep a close watch on the reaction of the USD to what Powell says or does not say.

Why? Yesterday’s strength in the Dollar has reversed overnight into this morning’s pre-market session.

In a post to members at 15:30 yesterday, I posited the following about the USD: “The $64,000 question about Gold and the Gold Miners depends on the direction of the USD: Was the recent decline in DXY the start of a period of weakness or a completed correction?”  (more…)

Two Largest QQQ Components Compromised? 

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Last week, I opined a technical piece entitled, ” Momentum Divergences Flashing Warnings Signs for QQQ & FAANG Stocks,” which highlighted the near- and intermediate-term divergences that were and still are developing in the big-cap technology sector.

Today I follow up with a look under the hood and the technical set ups in Apple (AAPL) and Amazon (AMZN), the two largest components of the NDX-100 and QQQ.

AAPL has been perched above the upper boundary line (204.50) of its February-August bullish channel for almost two weeks, which, among other things, is a sign of excellent relative strength but also could be a sign of approaching upside exhaustion. That said, as long as AAPL remains above key near-term support from 205.20 down to 204.30, let’s consider its post-earnings action as a sign of excellent relative strength. (more…)

Additional Upside Likely for ES

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The Emini S&P 500 (ES) continues to stair-step higher, reaching my next higher target of 2853/56, and now in route to 2868/72. However, if we view all of the action from mid-July to the Aug 2 test of key support at 2791 as a failed head & shoulders top formation, then the subsequent up-move from 2791.00, which has climbed above the levels of both Shoulders at 2822-2825, and above the peak of the Head at 2849.50, now has an upside “failed pattern” target of 2885.
 
In my decades of experience, when a head & shoulders top fails to break the neckline, and then reverses to the upside, its target is measured by adding the distance from the head to the neckline to the top of the right shoulder. In this particular case, we arrive at a major target in the vicinity of 2885. (more…)

Apple Tops $1 Trillion Valuation with New Price High — What’s Next?

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Apple (AAPL) has kissed a new all-time high above 207, where the company is valued at $1 trillion. So far, the high, as seen on the chart linked to below, represents about a 1.9% overshoot of the upper channel boundary line of the February- August bullish price channel.
 
Apart from the excitement and magnetism of the trillion dollar achievement, my channel boundary line analysis is necessary to overlay on the near-term fate of AAPL. In that the upper channel boundary has contained all the prior rally peaks for the past six months, the upside penetration of that barrier should be significant EITHER because it will put a lid on additional sustained strength, OR because AAPL is so powerful that the upper boundary is no longer viable, and, instead, is triggering a new, more bullish trajectory going forward.

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