Slope of Hope Blog Posts
This is the heart and soul of the web site. Here we have literally tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. You can also click on any category icon to see posts tagged with that particular category.
My post of October 11 mentioned that China’s Shanghai Index broke below a major monthly swing low level of 2638.30 and that it could be headed for its next major support level at 2260, or lower.
Since then, price has fluctuated in both directions and has been attempting to stabilize, but remains just below that former swing low…a potential major inflection point.
Overlayed on all of the following three charts of the USD/CNY forex pair is the Shanghai Index (shown in pink). After price peaked in January of this year, it began an 1,140 point decline, in divergence with a rally in the USD/CNY. (more…)
In my Market Forecast for 2018, I thought that, taking into consideration the uncertainty of the 2018 U.S. midterm elections, coupled with likely interest rate hikes, we’d probably see:
- volatility rise in 2018 and the SPX and other U.S. Major Indices gain only about half of what they gained in 2017, which would mean an approximate increase of 10% for the SPX
- that Technology would remain fairly strong, while Small-Caps would likely struggle more than Big-Caps
- that U.S. markets would continue to outperform other World markets (with the performance of their financials playing an important part)
I last wrote about the FAANGs and FNGU and what I was monitoring going forward in my post of July 30.
Since then, we’ve seen a great decline in the underlying stocks, as can be seen on the following two daily charts (a 1-year and a 2-month).
Of particular note, is that:
- many of them, are attempting to stabilize around their 20 MA (blue)
- the rate-of-change (ROC) indicator on all of these, including the SPX, except TSLA and TWTR are below the zero level
- the 20 MA is below the 50 MA, including AAPL which just crossed below
- the 20 MA is poised to cross back above the 50 MA on TSLA and TWTR
The U.S. Homebuilders ETF (XHB) is in bear market territory…down 24.68% from its peak on January 24 of this year.
On a year-to-date percentages gained/lost basis, it has drastically underperformed the 9 U.S. Major Sectors, as shown on the graph below.
|Year-to-date % Gained/Lost graph of 9 U.S. Major Sectors + Homebuilders
Further to last Wednesday’s post, here’s where the U.S. Major Indices stood after each close on Thursday and Friday, respectively.
Wednesday’s sell-off continued on Thursday, with the nine Major Indices closing at or near a lower near-term support level (or below, as was the case with the NDX and COMPQ), as shown on the following daily charts.
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Further to my observations outlined in my posts of August 6 (where I noted that 2900 represented a major Fibonacci resistance level for the SPX), September 29 (where I mentioned the possibility of equity weakness for the first part of Q4 ahead of the November 6 mid-term elections), and October 7 (where I discussed price on four of the Major Indices being embroiled in a technical chaos formation amid downside accelerating rate-of-change), I’d note that after today’s (Wednesday’s) dramatic drop in U.S. markets, they are now sitting on or close to near-term major support, as shown on the following daily charts of the nine Major Indices.
The first CNBC World Stock Markets Heat Map shows Wednesday’s big drop in North/South American, British and European markets.
Each candle on the following three charts of the S&P 500 Index represents:
- a period of one month (Chart #1)
- a period of one quarter (Chart #2)
- a period of one year (Chart #3)
Each of the last candles on all three time frames closed higher than its prior time-period candle.
The most notable feature of the Yearly chart, in particular, is that price could, in fact, reach a resistance target of 3033 (as I described in my post of August 6th) by the end of this year. Such a price level would end up producing a candle range for 2018 on the Yearly timeframe that equals or slightly exceeds the candle range of each of the prior two years. It would also complete a very bullish cycle for this year.
The first three of the following graphs depict percentages gained for the Major U.S. Indices during three time periods, namely:
- since March 6, 2009 (the bottom of the 2008/09 financial crisis),
- since November 8, 2016 (the Presidential election), and
Generally, traders/investors have favoured technology, small-cap, and transportation indices over the large-cap and utilities indices…indicating a stronger preference for risk over value, which continues to today.
The first three ratio charts show:
- the U.S. Financial ETF (XLF) compared with the SPX,
- the European Financial ETF (EUFN) compared with the STOX50, and
- the Chinese Financial ETF (GXC) compared with the SSEC.
Each one’s Financial ETF is weaker than its country’s major index, and in the case of the EUFN and GXC ratios, are sitting at a major support level, while the XLF ratio is approaching major support.