Slope of Hope Blog Posts
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My last post was a couple of weeks ago now and in that time the retracement that I was expecting has been playing out, though the main target, rising support from the March low, now in the 3745 area, has not yet been tested, and may well not be before we see a high retest.
Why is that? Well the patterns forming here look like bear flags, and while the low this morning overshot my ideal bull flag channel support on SPX by five handles or so, the action today has only strengthened the case that the next move is likely to be a retest of the all time high on SPX.
Before the open this morning I was noting that hourly buy signals had fixed on ES, RTH and YM, and since then hourly RSI 5 buy signals have fixed on SPX and IWM, with another brewing on INDU. There is a lot of upward pressure building here, and as well as the clear bull flag , the retracements so far on RTY, DAX & ESTX50 all also have the look of bull flags forming.
Firstly my apology for the lack of an update last week. As I’ve mentioned, I’m negotiating my way through a difficult divorce at the moment, and some weeks are harder than others. On the harder weeks I struggle to get any posts done. As the weeks and months pass everything should be resolved and I can just move on and I’m really looking forward to that.
So what has happened since my last post? Well I noted wryly that I lost several twitter followers as soon as I published my last post, and I assume that was because I was looking for a support break and retracement on SPX, and that is exactly what we have seen. I think that the low we have just made is what I would call ‘the low before the high’, just a sort of stretching of recently unused muscles before a larger retracement gets going, and I’ll be looking at possible targets for that retracement in my next post.
I was saying in my last post on Friday afternoon that the low made that day looked nice, with touches of the daily middle band and shorter term (from Nov low) rising wedge support on SPX. I was leaning towards seeing a retest of the all time high, which we have seen and more.
Now the rising wedge support touch on Friday was confirmation that the obvious rising wedge resistance trendline was the obvious target on a break up to a higher high with any confidence, and that was tested in the last hour yesterday, and then retested at the high this morning. That second retest held the resistance trendline again and SPX reversed on a high quality 15min RSI 14 sell signal: