Slope of Hope Blog Posts

This is the heart and soul of the web site. Here we have literally tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. You can also click on any category icon to see posts tagged with that particular category.

Are You An Investor Being Set Up For The Slaughter?

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For many years, I have been a staunch bull. In fact, many commenters and contributors on Seeking Alpha and MarketWatch were quite vocal regarding how they thought I was crazy back in 2016 for expecting the market to go from 1800 to over 2600SPX, and potentially up through 3000. Needless to say, many of them remained bearish throughout that rally. 

When many were extremely bearish in early 2016, I was pounding the table about a global melt up. When many were saying before the election that you should “sell everything if Trump gets elected,” we were again pounding the table for a rally over 2600SPX “no matter who got elected.” 

And, now that I am taking off my bull-suit, and have sent out my bear suit to be cleaned and pressed, these former bears are claiming that they “learned their lesson” and are now strongly urging investors to buy the dip. 
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Has The Bear Market Begun?

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Editor’s Note: Welp, Mr. 3225 on the S&P is back. Interesting now that this price target is still offered, although now it may be “years away.’ Read on:

It seems the pundits have lost their way. The reasons for the market moves have now confounded most market participants and pundits to such an extent, and they are stretching so far to provide a reason for a market move, that we have moved from the ridiculous to the sublime.

In the last several years I have outlined how the market has completely ignored the dozens of negative geopolitical events that were supposed to have adversely affected our market as it has continued to rally towards our long-term targets.

So, do any of you ever realize how ridiculous many of these news reports sound when they try to link the market action to the news? As I have said, there is almost always some positive news of the day to which the media can relate positive market action, and vice versa. But when there is no news to which they can easily relate the market action, it highlights how silly it really is to relate the news to the market action.

In fact, the market action we have seen at times almost mocks those who believe that negative events will cause negative reactions in the stock market. The other week, we saw announcements regarding another $200 billion in trade tariffs. And what did the market do? Yup, it immediately rallied over 50 points. Please take a look at my attached chart, which highlights how we rallied 9% since the start of the trade wars:

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Gold Can Still See a Lower Low

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The Fed controls the gold market. The manipulators control the gold market. The “swaps” control the gold market. The hedge funds control the market. Yes, I have heard about how everyone is controlling the gold market.

In fact, I even hear such ridiculous statements as, “The banks are pushing us down so that they can buy at lower prices.” The problem with this is that the banks have been long for weeks – yet they are still pushing us down?

There is so much misinformation about the gold market, it is truly astounding. A new investor into this complex is probably reeling from all the garbage that is being presented to them about how this market works.

But, I have news for you. This market works just as all other markets work. Once you can calculate appropriate support and resistance points, and understand market structure to identify which one is going to be targeted next, that is all you need to know to understand how to trade the market.

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Are You Blind To What’s Really Going On In The Market?

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In this article, I am going to do something a little different from my usual articles and start with my perspective on market direction, and then move into the issues I see in the market today.

I have long believed that we can see the 3000+ region before we get that 30% correction I have been looking for in the 2019-2020 time frame. And, as usually occurs, that market top will be accompanied by excessive bullishness among the masses. While many of the pundits have believed we will crash every week for years, the public seems to ignore them (appropriately) and have become much more bullish of late.

As one indication of such bullishness, the University of Michigan reported on Friday that U.S. consumer sentiment jumped more than forecast in September to a six-month high as Americans grew more optimistic about the economy and their purchasing plans. While I do not believe that this suggests that the 30% correction I am expecting will begin immediately, it certainly provides evidence that we are approaching that top.

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What the Heccis?

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I have been living and breathing Slope all through the holiday weekend, implementing the new multi-level membership system, and I stumbled upon a SocialTrader I had sort of forgotten about named Heccis  – – what I remember so distinctly about this fellow is that back in early 2009 he sent me projections he had made about what the stock market was going to do, and it basically had predicted the financial crisis but then went on to show equity markets were going to soar. Idiot permabear that I am, I rolled my eyes at this and dismissed it.

Suffice it to say his prediction was true (which called for absolutely outlandish prices – – in other words, pretty much what happened). Early this year, however, he made some new posts, and let’s just say I was more receptive to them this time.

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What’s Next for Gold?

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Gold is taking a bit of a breather after earlier climbing to a new recovery rally high at $1220.70 in the December futures (GC), a full $53.60 and 4.6% off its August 16, 2 1/2-year low at $1167.10.In a very bullish set-up, gold (GC) should digest recent gains above the $1207 area, where the 5 DMA has just crossed above the 20 DMA. However, if $1207 is violated and sustained, then we should expect gold to press into a deeper correction of its $53.60 rally, towards the $1195-$1190 support zone, which MUST contain the weakness to avert a complete retrace of the August advance.

If either the shallow ($1207) or deeper ($1195/90) corrections unfold, the subsequent upleg will point to $1250.00.
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Additional Upside Likely for ES

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The Emini S&P 500 (ES) continues to stair-step higher, reaching my next higher target of 2853/56, and now in route to 2868/72. However, if we view all of the action from mid-July to the Aug 2 test of key support at 2791 as a failed head & shoulders top formation, then the subsequent up-move from 2791.00, which has climbed above the levels of both Shoulders at 2822-2825, and above the peak of the Head at 2849.50, now has an upside “failed pattern” target of 2885.
 
In my decades of experience, when a head & shoulders top fails to break the neckline, and then reverses to the upside, its target is measured by adding the distance from the head to the neckline to the top of the right shoulder. In this particular case, we arrive at a major target in the vicinity of 2885. (more…)

How High Will The Market Rally Before The Economic Collapse Begins?

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Last week, I wrote an article about how I view the potential effects of an economic collapse on American society. Unfortunately, many of our readers took it as an opportunity to post their perspectives on Trump and the democrats.

Yes, I know the country is exceptionally divided. However, I brought this issue to light not because I see one party as being the savior for this country over the other. Rather, I brought this issue to light to show you that we are on a path of history repeating itself, as we have forgotten the lessons learned from the pain of the past.

We all have to recognize that the United States took a big step down that slippery slope of socialism with the passage of The New Deal. Since then, it does not matter which party has been in power, as we have extended those socialistic policies when the masses thought it was “needed.” Thus, each generation since The New Deal has seen expanding socialistic policies. While you can argue whether you approve or disapprove of this progression, to ignore that we are on this path is foolish.

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Economic Combustion Powering SPX to Test All-Time High?

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A big-picture perspective of the S&P 500 (SPX) shows that the most recent up-leg off of the June 28 low at 2691.99 has climbed to a new high at 2816.25, or +4.6%.  In so doing, the SPX has hurdled its prior two significant rally peaks at June 13 (2791.47) and at March 13 (2801.90), positioning the index for upside continuation to my next optimal target zone of 2845-2860. 
 
Should such a scenario unfold, the SPX, in effect, will be climbing towards a test of its all-time high at 2872.87 from January 26 of this year. Only a break below 2789 will trigger initial signals that the June-July up-leg needs a breather.

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Bulls Follow Through

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The first week of July was really about the upside following through based on the overall rounding bottoming pattern and temporary low setup at the 2693.25 low from the last week of June. The market was able to cement the status of temporary low from June, and had a decent “stick save” on Monday July 2 at the 2698.5 lows before closing at the high of the day around 2726 to cement another higher low.
Fast forward, the market tested the key 2740-area resistance for the 3rd or 4th time time later in the week, and was pretty much destined for the breakout like we expected. If you recall, the 2748 and 2758 prior highs level got blown out of the waters on Friday when the acceleration began since the bull train erased all doubts in the minds of traders. Overall, it was a fairly easy week because we’re definitely back in the aggressive BTFD (“buy the f’in dip”) regime as it worked very well for the majority of the week.

The main takeaway from this week was that the weekly candle was able to wrap up its bullish marching band at the highs and it’s a large bull bar. All the trapped bears and bull chasers are now in a vicious cycle on getting squeezed and rushing back into playing the game of BTFD as long as trending support holds for the immediate short-term play. (more…)