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.

Market Volatility Now In “Fragile Zone”

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Further to my post of December 3, 2015, the price of the SPX:VIX ratio has broken below a critical level of 100.00 and has fallen into, what I call, the Fragile Zone.

I named it this because, as you can see from the ratio chart below (where each candle represents 1/4 of a year), price has now encroached into the last major bearish candle of Q3 of 2011, and has also fallen below the 60% Fibonacci retracement level taken from the 2009 lows of this ratio to its highs of 2014.

A hold below 80.00 could see the SPX plunge, particularly if this ratio drops and holds below 60.00. The declining Momentum indicator is hinting that further weakness is ahead for the SPX…as I mentioned here, with respect to the E-mini Futures Indices.

What’s In Store For Oil?

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We can see from the 3-Year Daily comparison chart below that, for the most part, Gold, Platinum and WTI Crude Oil have traded in tandem, although Oil has seen far more volatile swings.

Since December of last year, Gold and Platinum have attempted to stabilize and rally from their 3-year lows, while Oil’s attempted rally was very short-lived, and price continues to plummet to new lows…we’ll see if today’s (Wednesday’s) volume spike signals capitulation, or not, as shown on the next chart (5-Year Daily).

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Further Downside Likely for Foreign ETFs

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One gauge of market sentiment that I look at from time to time is my chart grid of Foreign ETFs, showing the daily ATR on each ETF (the white histogram at the bottom of each ETF)…an extreme high ATR can often signal capitulation and a reversal of recent general trend.

From the chartgrid below, we’re not seeing that extreme, yet. In my opinion, we could very well see further downside on these ETFs, in general, for awhile longer.

 

Is Oil Set to Bounce?

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The following 5-Year Daily chart depicts Light Crude Oil (as the primary instrument in candle format) and the S&P 500 Index (as the secondary instrument shown as a black line). There was a drastic shift in sentiment between these two markets when they began to diverge in mid-October, 2014.

While the price of Oil is making lower swing lows in its depressed downtrend — and, in fact, made a new 5-year low today (December 7th) — the RSI and PMO indicators have been making higher swing lows but have yet to make higher swing highs. So, while we’re seeing possible hints of higher prices to come at some point in the future, it may be awhile yet before prices begin to stabilize, first. High-than-normal volumes this year haven’t yet produced stable prices and may have contributed to the large swings in between 37.50 and 62.50 that we’ve been seeing. Until we see a sustained drop in volumes, we will likely see Oil continue to plunge to further new lows and/or persist in its wild daily erratic bearish and bullish spikes.