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.

Oil Inventories at Critical Levels

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I wrote a post on 23rd April arguing that from an economic point of view the ongoing war between the US, Israel and Iran was largely irrelevant as the only thing that really mattered was how long the Strait of Hormuz would stay closed, and the risk that the Bab al-Mandab Strait might also be closed.

That was almost six weeks ago, and we’ve had a lot of announcements and briefings about peace talks since then, at least some of which appear to have been real, and it looked for a while last week as though there might actually be a chance of an interim agreement, but that has foundered for two strong reasons, firstly that both sides badly wanted a deal they could present as an unambiguous victory for themselves, and secondly that Israel didn’t want any peace agreement, and weren’t willing to restrict their actions in any way to get such any agreement.

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Four Beautiful Topping Patterns

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In my post on 6th May I was looking at the resistance trendline on the SPX weekly chart and that rising trendline was being close to being hit in the 7385 to 7400 area. It was then hit and exceeded in what might have been a bearish overthrow, but I had by then also drawn in an alternate high quality resistance trendline that was hit perfectly at the high on Friday. SPX could go a bit higher, but the ideal upside trendline target has been hit. Look at the chart below and admire this beautiful rising megaphone from the 2022 low. 🙂

SPX daily chart:

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Wild Thing

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In my post on 28th April I was talking about the Hormuz crisis but noting that when SPX made a new all time high on 19th February 2020, well after it was so obvious that COVID-19 was going to be a big problem that panic hoarders had caused a worldwide shortage of toilet paper, it reached a major resistance trendline and I was speculating that we might see that again here, giving a trendline target 200 handles higher in the 7360 area.

In my last post on 6th May I was looking at the resistance trendline again on the SPX weekly chart and that rising trendline was being close to being hit in the 7385 to 7400 area. It has since been hit and exceeded in what might be a bearish overthrow, but a have also since drawn in an alternate high-quality resistance trendline that is being hit today. SPX could go a bit higher, but the obvious upside trendline targets have now been hit.

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Crisis? What Crisis?

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In my post on 23rd April on my The Bigger Picture substack I was looking at why in my view the Iran War was, and is, largely irrelevant in the context of the economic shock being created by the closure of the Strait of Hormuz. The Strait has now been closed for almost ten weeks and seems very likely to be closed for at least another three weeks. I’ll be writing a follow up post tomorrow about oil, and the oil shock that I’m expecting to become very important when the oil and equity markets come out of their current wishful thinking daze in one to three weeks. If you’d like to see that, it will be published on my The Bigger Picture substack and at Slope of Hope.

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Sell in May ……….

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The old market saw goes that you should sell in May and go away, and rarely if ever in my view has that been more true than it is this year.

That isn’t to say that equity indices can’t go higher in the short term. I wrote a post on Tuesday looking at possible upside targets on SPX and QQQ that I would like to see hit, and have more modest upside targets on DIA and IWM that I’ll also look at today.

When we see the high for this move made, whether at those targets or lower, I think the prospects for equities over the summer look bleak. I covered some of the reasons for that in a post last Thursday on my The Bigger Picture substack looking at why the Iran War was largely irrelevant in the context of the economic shock being created by the closure of the Strait of Hormuz. If you haven’t already read that I’d suggest that you do that.

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