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.

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…)

The Bottom in 10-Year Treasury Yield Signals a Change of Era

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by Michael Paulenoff, MPtrader.com

Summary

  • The bear market for benchmark 10-year Treasury yield is at its end – disruption is coming
  • Numerous indicators corroborate: we are in the midst of an economic transition
  • Will the Powell Fed quickly evolve into a strong counter-balance to the powerful economic transition?
  • On an intraday basis, we explore these overarching themes overlaid on price behavior in my private investing community at MPtrader.com.

Take a close look at the monthly chart of benchmark 10-year US Treasury yield (Fig. 1) for the period 1981-2018, a 37year period. The dominant bear market for yield may still be alive but is not necessarily all that well.

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Generational Opportunity for Upturn in Yield

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We have been long the ProShares UltraShort 20+ Year Treasury (TBT) — the inverse, double-levered, longer-term T-bond ETF — in our MPTrader Model Portolio, expecting a downturn in T-bond prices in conjunction with a generational opportunity to capture the upturn in yield and interest rates after a 35-year bear market.

Yes, “the turn” has become a marathon, certainly not a sprint. However, increasingly my big-picture technical chart set-up argues strongly that yield will inexorably grind higher towards significant bullish catalysts that will propel both yield and the TBT higher in the months ahead.

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