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.

So What Next?

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Pretty much everything I have written about in my last few posts on SPX delivered. The bull flag wedge from the high broke up. The IHS that then formed broke up and made target, and the bull flag made the target with a retest of the June high.

So what now? Well I was saying that I was expecting a retest of the high to form a topping pattern setting up a larger move down in a reversion to the mean move. The level I use as the mean is the 45dma and that is now at 4287. The last two such moves broke down through it and, if so, I would be wondering about a possible target at the main rising support trendline from last year’s low, currently in the 4090 area.

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Binary Decision Point

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I was looking earlier this week on the very high quality falling wedge that had formed on SPX from the last high and considering the odds that it was a bull flag setting up a retest of the high.

Since then the wedge has broken up, retraced about 50% of the decline, and an IHS has formed with a target back at a retest of the last high.

At this stage there are only two main options. Firstly that the IHS breaks up, converts the neckline to support, and goes on to retest the last high, and secondly that SPX drops back through 4360, and likely then retests the last low at 4328.09, and then very possibly down further. It is very likely that we will see one of those two options happen next.

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Looking For A Short Term High

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The high last Friday was only three handles below the close on the daily 3sd upper band, which is a rare event, so I did what I like to do with rare events, I looked back and crunched some numbers looking at previous examples. These are the stats I posted on Monday morning. 

There are eighteen previous instances since the start of 2007 where a move has either punched through the 3sd upper band or delivered a near miss within 0.0025% of it (10 points at nominal SPX level 4000). Excluding the punches, none of which were preceded by near misses, there are twelve instances. Of those twelve instances five of them delivered a second near miss within three trading days, usually on the next trading day. Of those two delivered a third near miss within four trading days.

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Veni Vidi Vici

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In my premarket video on Tuesday I was looking at the setup and the historical stats and, was saying that a consolidation was likely to start the week and, then we would see what the bulls could do with the very bullish historical stats on Thursday and Friday. Well, they came, they saw, and they have conquered so far, so as it stands we now have the start of what could be a serious bullish break up on SPX.

Short term though, SPX is so stretched that the high on Friday was only three handles below the close on the daily 3sd upper band, which is a rare event, so I did what I like to do with rare events, I looked back and crunched some numbers looking at previous examples.

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