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.

Heading to 1900?

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The S&P 500 (SPX) price structure has plunged from the confines of its Dec-Aug top formation, and through its Oct 2011 support line in the vicinity of 1992.00.

Although my near-term work might argue for the emergence of a two-way trade, my intermediate-term work suggests strongly that the SPX has unfinished business on the downside — to 1900 at a minimum in the hours and days ahead.

Such a scenario would amount to a 10%-11% correction off of the May-July highs.

That said, however, if a garden-variety, 10% correction does not include a major capitulation, then we should be aware that a test of the Oct 2014 low will represent a 15% correction, while a test of the Feb 2013 low will amount to a 19% correction off of the highs.

full-Cf75QAolKpvvG6Xi34KWjOriginally published on MPTrader.com.

Impact of China Yuan Devaluation

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Last night, the USD “broke out” to the upside against the Chinese Yuan.

Of course, since the Yuan is a centrally controlled currency by the Chinese Government, the sudden, violent up-move of the USD vs. the Yuan was orchestrated by the Chinese central planners, who devalued the Yuan versus the USD.

In effect, China has joined the growing legion of currency “depreciators” like Japan, Europe, Australia, Canada, Russia, who have sought to remedy their economic woes by resorting to a lower currency– to move the competitiveness needle ever so slightly in their particular direction.

Welcome to the next phase of “the global currency war” for market share.

Of course, the USD is the biggest loser in this war if its value continues to strengthen, which means many U.S. corporations who depend on overseas trade for a chunk of their revenues, will confront increasingly stiff headwinds.

full-0C0K4BmbVsfoERoSDpLmzOriginally published on MPTrader.com.

Eye on Shanghai vs SPX Chart

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After the Shanghai Composite’s July 9 low, the Chinese government enjoyed some brief success, managing to goose the index from 3587 to 4185, or by nearly 17% — until today, that is. The index melted down nearly 9%, closing on the lows, and has the right look of the initiation of a new down-leg within the still-dominant near-term downtrend.

Meanwhile, the S&P 500 remains within its 6-month sideways range, although the price structure once again is approaching a test of key support in and around its up-sloping 200-Day EMA, now at 2060/56. That level must contain any forthcoming weakness to avert a press to 2010-1980 thereafter–within an increasingly-toppy medium-term pattern.

full-d42d582e67325109702815b8b582dfdbda7a9ca9Originally published on MPTrader.com.

Significant Low for BABA?

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Alibaba Group Holding Limited (BABA) has climbed sharply and hurdled key resistance at 82.20 to 83.60, which has improved its near-term technical set-up, and points BABA towards an important test of its Nov-July resistance line, now at 87.50.

Only a sharp downside reversal that breaks 82.00 will wreck the current set up-up.

Below is what we wrote one week ago when BABA was trading at 80.33/34.

All of the action in BABA since its March low at 80.01 shows a series of lower-lows, but none of the breaks precipitated an acute downside follow-through, which could represent a meaningful support, accumulation, and bottoming period, or in the absence of a rally above 88.40, a multi-month sideways bearish, digestion period ahead of another downleg that will look much more like an acute downside capitulation.  (more…)

New Up-Leg Emerging for Yield?

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During the past 3-4 weeks, my preferred scenario called for the 10-year Yield to stall at around 2.50% followed by a decline into the 2.10-2.00% support zone prior to my expectation of the emergence of a new up-leg that propels Yield to 2.90-3.00%.

That said, however, my near-term pattern work is warning me that last week’s (Jul 9) low at 2.17% followed by a sharp rally to yesterday’s high at 2.47% signifies the end of a June-July correction and the initiation of a new up-leg.

(more…)