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.

The Crucial Funds

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It should first be noted – – nay, emphasized – – that these charts and the words about them are being composed the day before the monthly CPI number is released. Although the CPI was absolutely meaningless for years and years, it has now become an even more important data point than the jobs report, since inflation data has an outsized influence on market strength or weakness. Thus, if you are reading this any time after the CPI of November 14th is released, the conclusions offered may be moot.

Having begun with that important disclaimer, I will say that the ten charts of the ETFs that follow bear an important common element: they have all moved powerfully up toward key resistance levels. In almost all these cases, the resistance is represented by a simple horizontal line (or, its equivalent, a Fibonacci level). Some prices are closer to resistance than others, but on the whole it can be said that (1) the more of these that fail to cross above these lines, the better chance bears have of seizing control of the market again; (2) the more of these lines are crossed to the upside, the higher the chance the bulls will simply continue running roughshod over the bears through at least the end of the year.

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The Fingerprint of a Moment

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In order to make this post a bit most comprehensible, I’d like to make mention of the lovely little novel written in 1884 called Flatland. Most of you know of it, I would suppose, but for those who don’t, it is the tale of a world of two dimensions in which various creatures (each of them a different shape) experiences life and goes about their business. Their perception within the confines of their two-dimensional world is one-dimension, since they can only “see” the edge of any other given inhabitant of their domain. Social status is governed by the number of sides one has, with the highest priestly caste living as a circle. Assessing the relative status of another citizen is accomplished by the two shapes rolling against one another, carefully gauging just how many sides the other fellow possesses so you know how to behave.

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One-Sixth Remains

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With the first ten months of the year now out of the way, a mere one-sixth of 2023 remains. Considering how absolutely insane this year has been already in all arenas (financial, geopolitical, legal, you name it), one can only tremble to consider what the next two months might hold.

Rather than dare speculate on the dozens of weighty matters already vexing the globe, I will simply focus on an octet of cash index charts along a common theme: the notion that each of them has hammered out a formidable and well-formed topping pattern and that, preposterous as it might seem to the mainstream pundits (and flying in the face of endless-cited bullish seasonality), it is within the realm of possibility that new lows for 2023 could be on hand for at least a few major indexes.

For simplicity’s sake, the format of each of the charts below is consistent. Specifically:

  • There are a few basic drawn objects to highlight what I consider important patterns and levels of support/resistance;
  • In some cases, a pink semi-circle offers a boundary for what I consider to be a reversal pattern;
  • A green tinted area approximates the important overhead supply for any given index and, thus, an area that should be quite resistant to easy price ascent;
  • A red rectangle shows the potential “drop zone” for the balance of the year. To be clear, it’s virtually impossible to know what a stock or index is going to do the next day, let alone the next two months, so do not interpret this red rectangle as some kind of firm prediction. Instead, it represents the prospective risk area through which prices could move, based on an approximate measured move or some meaningful support level beneath price presents.

Having said all that, let’s go through the indexes one by one. We begin with the all-important S&P 500:

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