Slope of Hope Blog Posts
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Further to my post of June 15, the SPX pushed above 3080.20 to reach a high of 3155.53 on Friday, as shown on the daily chart below.
I’ve shown two Fibonacci Extensions (one taken from the March low and the other taken from the June low), as well as an Andrew’s Pitchfork (taken from the March low), and a Williams Alligator (formed by three moving averages, each offset into the future).
There are two areas of price confluence zones (targets) above the current price. The first is a minor confluence zone around the 3250 level (where two of the Fib Extension levels converge). The second is a major confluence zone around 3350 (where two of the Fib Extension levels converge with the bottom of the Andrew’s Pitchfork channel).
As of today’s close, the S&P 500 Index (SPX) is currently in the ‘jaws of the alligator’ — Williams Alligator, to be precise, which is formed by three moving averages, each offset into the future — as shown on the following daily chart.
All three moving averages are curling down and the upper one has just crossed below the middle one…hinting of further weakness ahead. Today’s low touched the lower MA, which roughly converges with the 23.6% Fibonacci retracement level. A break and hold below today’s low of 2964.40, together with the crossing of the middle MA below the lower MA, could send the price down to the next Fibonacci retracement level (40%) at 2835, or even the 50% level at 2712.
Further to my post of May 25, the SPX didn’t quite reach its potential R1 target of 3095.86 for the month of May. Rather, it hit a high of 3068.88 by month’s end and was just 24.57 points shy of that level, as shown on the following monthly chart.
However, in my post of May 17, I gave the SPX a 55% chance of moving higher, when its price was 2863.70. Since then, it gained 205.18 points in nine trading days into the end of May.
So, all in all, I’d have to say that the the bulls were a little more than 55% successful in moving this market higher, even though it didn’t quite make its R1 target.
Hong Kong’s Hang Seng Index (HK50) has been massively underperforming China’s Shanghai Index (SSEC) since January 2019, as shown on the following monthly charts.
In fact, the HK50 broke below the bottom of its Andrew’s Pitchfork channel in March this year, as the COVID-19 pandemic spread around the world from Wuhan, China and caused hundreds of thousands of deaths and untold catastrophic global economic destruction.
Such a channel break usually signals a shift in trend and sentiment from bullish to bearish. In fact, that has already occurred with the formation of lower highs and lows on this monthly timeframe. As well, the Balance of Power has, once again, turned negative.
My post of May 21 identified a pivot point resistance value/target (R1) of 3095.86 for the S&P 500 Index (SPX) for the month of May.
Its S&P 500 E-mini Futures Index counterpart (ES) has almost touched the 3000 level in Monday evening’s trading session, as shown on the following daily chart.
There are four trading days left in May for the SPX to reach its R1 value, which coincides with the next technical resistance level of around 3100 for the ES (the median of an uptrending channel converging with overhead price resistance).