Slope of Hope Blog Posts
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We are back to an “Othello” market. Down one day. Up the next. Down the next day. Up once again. I have just described this entire week to you.
Although stocks are very strong at the moment, I would suggest to you that Brazil’s longer-term trend is still downward, and that the ETF shown below is quite vulnerable to resuming its tumble the moment the “buy” algos are off.
The first three ratio charts show:
- the U.S. Financial ETF (XLF) compared with the SPX,
- the European Financial ETF (EUFN) compared with the STOX50, and
- the Chinese Financial ETF (GXC) compared with the SSEC.
Each one’s Financial ETF is weaker than its country’s major index, and in the case of the EUFN and GXC ratios, are sitting at a major support level, while the XLF ratio is approaching major support.
It was only a few trading days ago that most U.S. equity indexes were at the highest levels in the history of Earth. They are cheerfully and blissfully overvalued, far more than all prior bubbles, and no meaningful breakdown has occurred in over 30 months. Even so, the markets outside the U.S. has been ripping at the seams, and I wanted to share seven charts that are illustrative of that happy fact:
What I know about Turkish politics could probably fill about two sentences (which, I suspect, puts me in the 95th percentile of Americans), but apparently it’s even worse there than here. Using the oh-so-spiffy currency charts from SlopeCharts, allow me to show you how their lira is doing:
I last wrote about China’s Shanghai Index in my post of June 19.
This index is in bear market territory and is headed toward its last (monthly) swing low of 2638.30, as shown on the following monthly chart of SSEC. A break of that level could see a swift drop to its next major support level of 2260, or lower.
Both the momentum (MOM) and rate-of-change (ROC) indicators are below the zero level and are accelerating to the downside on this timeframe. Watch to see if they make a new swing low below the one made in February 2016.
If so, this index could be headed for major problems, and the increasing trade war with the U.S. is not helping. (more…)
Stocks vaulted higher (once again) today, with many indexes at or very near lifetime highs. There certainly may be gasoline left in this most recent rally, but I wanted to point out some important thresholds in emerging markets that could mark a point of exhaustion, since these markets will be hitting their own lead walls of overhead supply.
First, very broadly, there is the emerging markets. I’ve placed a marker showing where SlopeCharts indicates the point of resistance.