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.

Chart on Junior Gold Miners ETF (Mike Paulenoff)

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The hourly chart of the Market Vectors Junior Gold Miners (GDXJ) has two powerful aspects to it.   One is that the base-like accumulation pattern that developed between early Jan and late Feb has propelled prices above its key breakout plateau at 38.50.  This triggers potential upside targets at 42.50 and then 44.40.

The other is that the series of higher-lows and higher-highs off of the Jan 27 low at 32.51 suggests strongly that the most recent "higher-low" at 36.73 from Feb 24 initiated a new, powerful upleg.  The magnitude of this should approximate the length of the upleg from 32.51 to 39.96.

Should that be the case, then the current upleg has a "swing" target of 7.45 points, or to 44.00/20, which aligns with the upper target measured from the breakout from the base pattern. At this juncture, only a decline that breaks 38.00-37.80 will compromise the timing of the anticipated surge, while a break of the Feb 24 low at 36.73 will invalidate the bullish scenario altogether.

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Originally published on MPTrader.com.

Chart on Silver, Gold & EUR/USD (by Mike Paulenoff)

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Silver in the pre-market today climbed to new bull market highs at $34.52, while gold prices popped above a key 11-week resistance line off of its Dec 7 high at $1,431.70. 

This bodes well for higher prices that propel gold — and the SPDR Gold Share (GLD) — to new highs in the upcoming hours/days.  Meanwhile, silver and the iShares Silver Trust ETF (SLV) point towards upside continuation towards a confrontation with the upper trendline of its multi-month up-slanted price channel, now at $35.30 in spot silver. Only a decline that breaks $32.40/30 will begin to compromise the near term bullish scenario.

Also shown on the chart is the euro/dollar, which, although perched right off of its recent high at 1.3860, acts tired technically.  However, it otherwise remains the beneficiary of a relatively weak U.S. dollar and strong German fundamentals, and  barring a break of 1.3710, the uptrend should remain intact and head for 1.4000 next. 

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Originally published on MPTrader.com.

Wall of Worry (by Springheel Jack)

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It's rare that the path for any market looks entirely clear, and that's as it should be, as if more upside were guaranteed it would already be priced in and historic. It is a concern that last week's decline looked like a single wave down, and is entirely possible that there is more downside coming as many expect. Fortunately there is a decent looking line in the sand drawn on ES in the 1320-1 area, as an IHS has formed there with a target at 1347. If 1321 is broken with conviction today then the path will look clear to new highs, with Mondays being historically strongly bullish and the first of the month (tomorrow) also historically strongly bullish:

The picture is slightly less clear on NQ, with a resistance zone in the 2335 to 2365 area, with the key levels in the 2335, 2350 and 2365 area. A break with confidence of Friday's 2350 high will look bullish, and a break with confidence of 2368 will open up a retest of the 2400 area:

Copper broke up on Friday and the next obvious target is strong resistance and the potential IHS neckline in the 451 area. There's significant negative divergence on the 60min RSI however and I'm wondering about a retest of broken resistance:

Silver broke up from resistance at the close on Friday and may be forming an IHS with the target at 35.7. There's some negative divergence on RSI suggesting there might be another test of broken resistance and I'll be watching the current short term support trendline:

Oil has a lot of geo-political risk at the moment and increasing unrest in the middle east may well push it up further. It has made the broadening formation target from last week and negative divergence on the chart looks weak short term:

A lot of people, including myself, are looking with great interest at the longer term short setup on Yen, and I've been suggesting for over a week that Yen might have another last push up to deliver a good entry level. USDJPY (inverted Yen) has now reached my highest probability target and reversed there so this looks like an attractive entry for those scaling in to a longer term short Yen position. If I have room I'll post the longer term chart tomorrow to show the full setup

I'm leaning strongly bullish on a break with confidence of the IHS neckline on ES today. Until that happens I'm seeing this as the highest probability reversal area if we are to see another wave down on equities so longs should be cautious until we see that break up.

Oil’s Explosive Move – Chart by Mike Paulenoff

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Crude oil's upside pivot reversal off of last week's low at $83.85 has morphed into a powerful spike that has climbed above the prior high of $92.84 to a new, post-Dec 2008 high at $99.94 today.

The explosive upmove has blown through key resistance at $90.15 — the 50% resistance plateau of the huge $114.87/bbl bear market from July 2007 to Dec 2008. It has hurdled key multi-week resistance at $92.30/90 into what looks like a vicious new upleg that could be heading for a confrontation with the upper channel resistance line, now up near $110.50 to $113.00.

At this juncture, only a major downside reversal that breaks and sustains beneath $92.00 will begin to compromise the developing vertical surge in oil prices.

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Originally published on MPTrader.com.

Surfin’ USA (by Springheel Jack)

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Trading is like surfing in a way. You wait for a promising wave, you pick your entry carefully, and then you ride it as far as you can. It's a process that requires self-discipline, patience and skill, and inexperienced surfers and traders tend to make a lot of mistakes. I was saying to someone yesterday that the bear setups that I write about when they appear are inherently riskier plays in this cyclical bull market, and that they need to be played cautiously and with an awareness of the shorter and longer term pictures. When they play out though they can be very profitable and set up great buying opportunities at the end of the move.

I've been getting some suggestions this week that I shouldn't write about bear setups as they form, because they distract less experienced traders from the longer term long opportunities in this POMO-driven bull market. Perhaps, but I chart what I see, and it would be dishonest to just paint a bullish picture & chant JBTFD every day as though that was genuine technical analysis rather than just a currently safe medium term mantra for trading rookies. I'll chart and blog what I see, and readers can take it or leave it as they wish.

I'll be posting an unusual seven charts today as there are a lot of very nice looking setups this morning. The first chart is NQ, where the strong resistance trendline was broken yesterday morning before a bounce back into the wedge to test 2400 resistance. NQ is trading under the broken trendline now and I'm hoping to see 2400 tested under the broken trendline today as that would likely offer a very nice short entry:

On ES the picture is subtly but importantly different. The support trendline was also broken there yesterday but after the break back up is still acting as support. I'm not expecting that to last long , but we might well see another move up within the shorter term rising wedge I've marked up on the chart:

There's a mixed picture on other instruments / indicators today. Copper is trending and reversing beautifully at the moment and is offering some really nice short term opportunities. It reversed up yesterday and then down overnight. I'm expecting a main channel support test in the 441 area soon, very possibly today and while I'm expecting a bounce there initially, copper may well break down through it afterwards, opening up a lot more downside:

Silver made new highs yesterday and looks like an interesting, if suicidally brave, short opportunity this morning. I'll cover that another day as I'd like to add the longer term picture in there too, where longer term resistance now looks fatally damaged. Short term it has reached a potential resistance trendline though, and gold's failure to make a new high with silver is a possibly important bearish divergence. On the other important indicators today I've been watching EURUSD very carefully to see whether it has bottomed, and posted the falling wedge upper trendline yesterday as my bull/bear line in the sand. That line was an unconfirmed two hit trendline yesterday and the bounce was slightly higher at an alternate, now confirmed, trendline. While that trendline remains unbroken EURUSD is still in bear mode, and I've given the next downside targets on the chart:

AUDUSD had a similar moment of truth yesterday and reversed at resistance. That line remains the bull/bear dividing line and I'm expecting a significant drop unless it reverses to break that trendline:

I haven't charted the Yen much in recent months, but I was asked to look at this the other day and charted it on various timeframes. I was strongly struck by how well the 60min RSI signals important reversals, so I'll be looking at this a lot more often in future. I was also struck by the simply amazing long term short setup on Yen, which looks likely to drop a third in the next few years, and a lot of people have been talking about this and shorting the Yen. It's great to see such an opportunity on an instrument where the fundamentals really stink, but I haven't shorted it yet, and that's because the short term setup looks bullish rather than bearish, so I'm expecting a better entry soon. I'll cover the longer term setup another day but here's the short term USDJPY chart, which I would stress is an INVERTED Yen chart, so the bearish look of the chart is actually a short term bullish chart for Yen:

The last chart of the morning on 30yr Treasury futures, and I have to say that the bearish setup here is at odds with the bearish setup on equities. Treasuries have been in a counter-trend bounce for the last few days, but there's a nice looking bearish wedge on the chart that suggests strongly that they will soon resume the long march downwards. Obviously that could happen after an equities correction here:

Overall I'm still leaning short today, though NQ particularly might see a bounce to test strong resistance at 2400 again. Obviously it's opex Friday today and there could be some strange moves as a result. Big downward moves are fairly rare on opex Fridays and I'd be surprised to see one of those today.