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.
All right, today just a quick analysis, hopefully it can be helpful to Slopers that are thinking to go SHORT right now…
First of all, please check our previous post from February 23 where we insisted it was time for a SHORT trade. That was two weeks ago.
Now, the market is tanking and it has made a bit of road down already, so let’s have a look to what our model say, where is the limit for this “correction” ? Just to avoid going SHORT at the bottom…
The market yesterday closed down again and reached a (more serious) intraday low of 2085.25. Is the correction over? Maybe. It has for sure entered the ~2097-2040 DAILY range that we originally indicated as “buyable” for short-term swing traders. If you are a long-term holder and you did not buy some weeks ago in the ~1970 area, this is an area where you may have started to consider buying again, it’s better than buying at the previous peak at ~2110, although of course is not such a great buy as it was a few weeks ago, but these WEEKLY+MONTHLY LONG setups don’t come up every few days as their time period is longer and they need more time to manifest.
Be aware that the market may correct further, as this is a WEEKLY correction in the end, it started last week and so far is continuing into this week, so if you go LONG be prepared to distribute your allocation across several levels in the area indicated.
Last week we highlighted the fact that the market is reaching VERY OVERBOUGHT levels on DAILY and WEEKLY time periods (not yet MONTHLY though, which means higher prices are possible after the upcoming DAILY+WEEKLY pullback).
Last week had a strong positive Close, but nothing happened from the point of view of our suggested SHORT trade, it’s still there, as you can see from this chart below, the market is really OVERBOUGHT at these levels:
>> Click here if you want to receive this analysis every day in your inbox. (more…)
Dear Slopers, finally it’s a good time to go SHORT!
Let’s re-cap what happened in the last few weeks: on January 15, 2015, we posted a report where we recommended to our paying subscribers to go LONG, because our Retracement Levels DAILY+WEEKLY+MONTHLY combined LONG models were showing an OVERSOLD condition and good chances of having a LONG reversal.
Yesterday the market closed down. In the DAILY ESH15 chart below we are examining the market distance to the first valid LONG support (2032.75) and to the SHORT resistance level (2071.75) that has odds of reversal equal to those of the first valid LONG support. As you can see the LONG support has almost been reached yesterday and may still be reached today as it is only a few points away. On the uptrend side the market has definitely room to go, so as always let’s try to imagine that the market is like a coil compressing in the LONG direction and then bouncing back and then compressing in the SHORT direction and then pulling back and we must be ready to capture profits on these swings.
The latest Higher High (circled in black on the right hand side of the chart below) is also giving us a clear indication that the market is trying to breakout higher, so the process anticipated in the last few days is currently happening and we have to see if from here the market finally pushes higher and breaks definitively out of its latest sideways move.
One of our clients yesterday sent an email to us, where he asked: “What happens to your LONG strategy if a war suddenly breaks out in Russia/Ukraine ?”. Unfortunately we can’t see into the future and it is not possible to estimate what will happen for each global geopolitical event that may affect the stock market. We use quantitative models to avoid the futile exercise of trying to predict the future through fundamental/geopolitical analysis, our models allow us to anticipate market reversals before the news are out, so we can only say that if the market tanks because of a war in Ukraine we will need to look at the TO GO LONG levels and find a good place to enter at discounted prices. The market will bounce back, as always, when that specific geopolitical situation improves and we will be already LONG before the news can tell the world that things are resolving in Ukraine.
(more…)
