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.

Marking Time

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In my last post a week ago I was talking about the prospects on SPX for testing the weekly middle band, currently at 4312, on this rally, with particular reference to the very historically bullish two first days of June, which were the last two days. Unfortunately for the bulls, these were both wasted in a sideways consolidation, so reaching that target now looks more doubtful, and the odds of a break down before that target is reached have increased.

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Holiday Rally Setup

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SPX closed below the main SPX support/resistance trendline at the end of last week. This trendline has broken twice since 2009, and both times SPX followed through hard. In 2011 SPX broke very hard through it and never broke back over it until until 2020. In 2020 SPX broke over it, then closed the next week back below, and then didn’t close back below it again until last week. This is too limited a sample to extrapolate much from but there is precedent for failing to confirm the break the following week and then following through the break and so the likely weekly close back above today has precedent from 2020 and is not an obviously bullish development.

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SPX Breaks Main Support Trendline

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I was disappointed to see SPX close well below the main support and resistance trendline on Friday (Editor’s Note: Why? Why on Earth?) . This has only happened twice since the start of 2009, and on both occasions SPX followed through the break with force. Two instances is somewhat less than a statistically significant sample, but further downside is now undoubtedly open, even if the bull flag setups on many indices, sector ETFs and stocks are still intact.

SPX weekly chart:

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Retest Interruptus

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After the low last week very decent quality IHS patterns formed on SPX, NDX, IWM and Dow and broke up this week. They all failed, setting up targets at the retest of last week’s lows, which would generally all be reached, so the fact that only Dow has delivered that retest so far tells us that there may well be unfinished business below.

The question here is whether the impressive collection of bull flags that have formed from the all time highs on many indices and stocks are going to deliver, and equities are still in the inflection point where that decision is being made.

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