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.

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.
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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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U.S. Dollar Peaking?

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Now that POTUS has weighed directly into the currency manipulation issue, basically accusing both the EU and China of manipulating their currencies lower to achieve competitive advantage while the US economy attempts to fire on all cylinders amid a rising rate cycle, the trading world has been put on notice that POTUS can and probably will play that game, too. Or at least he may jawbone about a lower USD to achieve the same goal without actually forcing the Treasury to intervene in the markets.

It is through this quasi-politically charged prism that we now view the technical set up ahead of the next potentially significant directional move in the USD.

Looking at the BIG picture chart of the U.S. Dollar Index (DXY), we can make the case  from a pattern perspective that the powerful decline from the January 3, 2017 high at 103.82 to the February 16, 2018 low at 88.25 ended the first major down-leg of an incomplete USD bear phase.  This was followed by a February-July counter-trend rally into the 95.50/65 area, which represents a recovery of almost exactly 50% of the prior initial down-leg. (more…)

Economic Combustion Powering SPX to Test All-Time High?

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A big-picture perspective of the S&P 500 (SPX) shows that the most recent up-leg off of the June 28 low at 2691.99 has climbed to a new high at 2816.25, or +4.6%.  In so doing, the SPX has hurdled its prior two significant rally peaks at June 13 (2791.47) and at March 13 (2801.90), positioning the index for upside continuation to my next optimal target zone of 2845-2860. 
 
Should such a scenario unfold, the SPX, in effect, will be climbing towards a test of its all-time high at 2872.87 from January 26 of this year. Only a break below 2789 will trigger initial signals that the June-July up-leg needs a breather.

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10-Year Yield: From A 35-Year Bear Market To A Generational Bull Market

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From Mike Paulenoff: In early March, 10-year yield was circling 2.87%. Now it is circling 3.00% for the first time in 4 years. The increase is probably shocking to many analysts and investors. Neither economic nor inflation data provide adequate justification for yield to be higher than it was two months ago. But there are times when the contradicting longer-term technical set-up should be heeded, even when the trend lacks strong support from lagging tabular data.

4 29 18 Monthly YIELD GIF

In scanning the past few months of U.S. economic data – such as Retail Sales, New Home Sales, Personal Spending, Consumer Prices, Non-farm Payrolls – what jumps out is the variability of the data. Most of these data series reflect a zig-zag pattern that belies a consistently strong directional economic impulse.

On April 27th, investors received their first look at the advance estimate of Q1, 2018 GDP, which came in at 2.3% compared with consensus estimates of 1.8% to 2.0%. More surprising, perhaps, was the subdued Q1 Price Index at 2.0% versus estimates of 2.4%, although the inflation gauge did remain at the Fed’s 2% target. (more…)