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.

Higher Volatility Threatens the SPX: Important Levels To Monitor

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In my 2017 Market Wrap-Up post, I referenced major support (200) and resistance (280) as levels worth monitoring on the SPX:VIX ratio, on a monthly timeframe.

The following updated monthly chart of the SPX:VIX ratio reveals a few interesting things:

  1. All of the monthly closes since July 2017 have been above 225.
  2. December ’17 and January ’18 have spiked above the 280 resistance level, but not yet held above.
  3. A long-term uptrend line (heavy blue arrow) indicates near-term support around 225, at the moment.
  4. 225 is confluent with a major external Fibonacci retracement level at 228, as well as the bottom of the original long-term uptrending (green) channel.
  5. In my post of February 24, 2017, I identified 200 as a new level to be held above, in order to support a new bull market in equities.
  6. In April, 2017 we started to see closes above 200 (the next monthly chart shows the SPX in the upper half and the monthly closes (in histogram format) of the SPX:VIX ratio in the lower half, for a different perspective).
  7. Monthly momentum on the SPX:VIX ratio began to weaken last November, which hasn’t supported the price breakout on the SPX above 2600.

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WTIC Crude Oil Hovers Above Major Support

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I last wrote about WTIC Crude Oil on December 26, 2017.

The following monthly chart shows that /CL has since rallied to retest its bearish moving average Death Cross apex at $65.00 and is hovering above that price, as well as its 50-month moving average.

If $72.00 is, indeed, in the cards, as I described in the aforementioned post (or even higher to retest $75.00 price resistance), it’s very important for /CL to hold above $65.00, now major support. A drop and hold below could send it tumbling back to $55.00, or lower.

U.S. High-Yield Corporate Bonds ETF in Jeopardy

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The High-Yield Corporate Bonds ETF (HYG) is in jeopardy at major resistance.

The monthly chart below shows that price is facing double resistance at the confluence of a 60% Fibonacci retracement level at 89.29 and the upper edge of a large triangle formation (both of which began forming during the 2007/08 financial crisis to the 2009 lows).

Major support sits below at the confluence of the 50% Fibonacci retracement level at 83.98 and the triangle apex around 83.30.

The momentum indicator has dropped below the zero level on this timeframe, hinting of more weakness to come, as has been the case, historically. (more…)

Homebuilders ETF Poised to Make a New All-Time High

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The Homebuilders ETF (XHB) is poised to make a new all-time high as it faces its peak set just before the 2007/08 financial crisis struck, as shown on the monthly chart below.

There are two interesting things I notice on this chart. The volume moving average has been steadily declining since September of 2013 as the momentum indicator is nearing its record peak set in May of 2013…hinting of potential profit-taking at current overheated levels.

So, whether, or not, we are about to see a rollover anytime soon should be revealed in coming days/weeks. Keep an eye on volumes and momentum, for possible clues.  Furthermore, as the Fed considers 3 to 4 interest rate hikes this year, no doubt mortgage rates would rise, as well, negatively impacting this sector.

The S&P 500 Index (SPX) is shown in the background as the blue area. If the XHB rolls over, it may also bring the SPX with it, but, as I described in yesterday’s post, keep an eye on HYG, as well. (more…)

EUR/USD Currency Battle

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The following monthly chart of EUR/USD shows that the Euro has risen to a resistance level (1.2500) at the upper edge of a downtrending channel that began during the 2007/08 financial crisis.

Its next resistance sits at 1.3055, a major Fibonacci resistance level taken from the 2000 lows to the peak prior to to the financial crisis. Fibonacci support sits below at 1.2134.

Momentum is in uptrend on this timeframe and still rising, but has yet to match the all-time high set in March of 2011.

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