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.

SPX Approaches Main Resistance

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SPX has gone through a lot of trendlines and divergence on this amazing move up, with the last lot breaking on the move over the 3350 area including the negative divergence on the daily RSI.

SPX is very stretched here, has punched 100 handles over the monthly upper band, touched an amazing 7.1% above the 45dma when I last annotated that chart yesterday, and is now close to testing the last and largest resistance trendline on the chart.

That trendline starts at the March 2009 low, held support at the 2010 low, and then was touched as resistance at highs in 2011, 2012, 2014, 2017/8, 2020 and is now close to being tested as resistance again. That trendline hasn’t broken as resistance since SPX crossed below it in 2011, and I have it in the 3510-20 area at the moment, though that is an approximation on a trendline that is now more than eleven years old. At the time of writing SPX has reached a new all time high at 3508.07.

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Degrees Of Separation

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My apologies for my being unusually quiet over the last few days, My wife of 23 years and I are starting the process of getting divorced and I have been distracted by that. It’s definitely for the best, and likely this would have started a year ago if she had not been diagnosed with cancer then. She is now clear and largely recovered, and the reality that we really shouldn’t still be married to each other any longer has been brought into very sharp focus by COVID-19 and the quarantine this year, as I suspect it has for quite a few couples, so we are starting the process of correcting that. Our children are old enough now, are supportive of the split and it is just one of those things.

On to the markets where SPX has made the new all time high that seemed likely and where stock markets seem very disconnected from the real economy of eye-wateringly high unemployment, social distancing and sagging consumer demand. Is this sustainable? Well as always time will tell but I suspect not. We’ll see.

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Stretched

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SPX broke up through both of the inflection points that I was looking at in my post earlier this week with the second one at the island top gap into 3337.75 yesterday. SPX here is very stretched, but that doesn’t mean that it can’t go higher, and there are no longer any significant resistance levels between here and a retest of the all time high, which I’m now leaning towards seeing before SPX makes the next serious retracement.

A serious retracement is of course a retracement strong enough to break and convert the daily middle band and then likely deliver a reversion to the mean move or more. I was asked earlier this week what I meant by that and I’m going to take a little time today to explain what I mean as it is very simple and extremely easy to incorporate into your market views if you don’t have a system to do this already.

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Testing 3300 on SPX

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The nice topping setup from my post last week failed to deliver, with SPX finding support once again at the daily middle band, and the very nice bull flag channel on NDX failed to break down as I was hoping it might. Instead it continued to form and delivered the high retest that we have seen this week. So what now? Well the high retests on NDX and SPX have of course set up possible alternate double top setups which are again of high quality, so this is the next important inflection point,and in the event that the SPX daily middle band continues to be solid support, perhaps the last inflection point before a retest of the all time high on SPX.

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Possible H&S Forming Here

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SPX didn’t quite reach the 3290 bull scenario target area that I was talking about last week but made a respectable 3280 or so before rejecting back into a retest of the established support and possible H&S neckline in the 3200 area. The SPX hourly RSI 14 sell signal reached the possible near miss target and an RSI 5 buy signal has now fixed.

Interestingly the high last week established a possible new rising wedge resistance trendline from the March lows, which is a development that I’m watching with interest, as the retracement since has broken rising wedge support and has put SPX into a possible topping process.

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