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.

Impact of Higher Yields (by Mike Paulenoff)

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The ProShares UltraShort 20+ Year Treasury ETF (NYSE: TBT) is pushing up through important 6-month resistance, which projects considerably higher and is another way of saying that the yield curve could get considerably steeper in the near future.

If that proves to be the case, then major money center banks that provide loans should be able to capture a much wider spread (profit-margin), especially if the Fed holds rates at zero for the foreseeable future, as Chairman Bernanke suggested on "60 Minutes" last Sunday evening.

Add in the income and payroll tax cuts, and perhaps loan demand will begin to surge, all of which could be extremely bullish for big banks like Bank of America (BAC). Finally, from a technical perspective, BAC appears to be about to thrust out of a 4-session bull flag formation in the aftermath of its recent upmove from 10.91 to 11.88, which should propel prices directly to test its Apr-Dec resistance line, now at 12.33. If hurdled, this will trigger a powerful follow-through to test the prior rally peak at 12.76.

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Originally published on MPTrader.com.

Upside Pivot for China (by Mike Paulenoff)

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A comparison of the daily charts of the Shanghai Composite and the S&P 500 shows that each index turned up on Nov 29-30. The Shanghai turned up after a 50% correction of its Jul-Nov advance, and off of its 200 DMA at 2703, while the SPX turned up from its sharply rising 50 DMA after a 30% correction. Both indices are acting very "technical" into year end.

My proxy for the participation in the China equity market (Shanghai Composite) is the iShares FTSE/Xinhua China 25 Index (FXI) for the time being. The technical set-up in the FXI coupled with the very constructive intermediate term chart pattern in the Shanghai Composite argue strongly that the China equity index is on the verge of pivoting to the upside into another powerful upleg off of its July low.

If my work proves accurate, the FXI is emerging out of weakness (from last Thursday's peak at 45.18 to Monday's low at 43.67) and approaching a new upleg that should hurdle 45.18 on the way to the 47.50 vicinity.  Below is a chart on the FXI from yesterday that we posted for our subscribers before the start of the up move.

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Originally published on MPTrader.com.

Recovery Upleg for CSCO (Mike Paulenoff)

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The most salient feature of the enclosed 4-hour chart of Cisco (CSCO) is the series of lower-lows from mid-November at 19.34 into last Friday at 19.00, which were not confirmed by my 4-hour RSI (momentum) gauge.

From a momentum perspective, the hourly chart work produced an RSI "sling-shot" that only needed a catalyst to trigger — and the catalyst came in the form of a brokerage firm upgrade. With that in mind, let's also realize that a similar momentum sling-shot also had developed in the daily chart. The chart pattern indicates that CSCO ended its downleg from 24.62 (Nov 10) at 19.00 on Friday afternoon, and has just started a recovery upleg.

Initial target is a test of the prior rally peak at 19.72, which should be hurdled on the way towards 20.40/80 thereafter.

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Originally published on MPTrader.com.