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.

Halfway Between the Gutter & Stars

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SPX rallied further on Friday to test the monthly pivot at 4078, and has been trading above it overnight. A string of decent quality double bottoms have broken up on the equity indices and if we are to see further upside then the next big resistance on SPX is at the daily middle band which closed on Friday in the 4108 area. This brings us to a big inflection point that should determine direction for the next few weeks.

On the bear side the daily middle band should hold as resistance. That can either happen with a fail directly at or under the daily middle band, or with a break above it that fails to follow through to convert it back to support. That would normally be delivered with a clear break above it that then rejects back below it the following day.

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Back On The Three Day Rule

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I was saying on Wednesday morning that the most important short term resistance was the 5dma, and we saw a break back over the 5dma at the close on Wednesday, so that put SPX back on the Three Day Rule. That means that in the event of a clear visual break (3 to 5 handles) back below the 5dma on either of the next two trading days, in this case yesterday or today, then SPX should retest the last low at 3886.75 before any retest of the prior high at 4325.28.

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Still Testing 3900

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The rally from the first backtest of 3900 was over too fast to set up any possible possible divergence on the daily RSIs. That means that there are no possible daily RSI buy signals brewing on the US equity indices, and that is a strike in favor of the bears.

The inflection point here remains the same. The rally could resume from the important support in the 3900 area, or that area could fail into a retest of the 2022 lows.

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Testing 3900

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The H&S patterns from the rally highs that I was looking at a week ago all made their target areas yesterday and SPX is now testing important support at 3900. This area was significant on the way up in early 2021, and was then key support in May, resistance in June, and was broken as resistance and backtested as support in July.  Bulls need to hold this area if they want to go higher, and bears need to break it hard if they want to retest the 2022 low at 3636.87 and go lower.

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On The Road To 3910

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In my post on Friday I was looking for a fail at the backtest of the 4200 SPX area, and a break down from the H&S patterns forming on the US equity indices and we saw that fail and all the H&S patterns broke down. None of those have yet made target.

SPX has broken back below the 45dma, now at 4030.05, so the reversion to the mean move has been completed and I won’t be posting this chart again for a while.

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