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.

Taking Stock

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In my post on Friday 6th August last year I was looking at a possible backtest scenario on SPX that could be setting up and I reviewed how that is looking on my first post this year, as I was thinking, and am still thinking, that backtest may well be delivered over the next few weeks.

That backtest would be of a huge resistance trendline on SPX that broke at the end of 2020 / start of 2021, and is currently in the 3850 – 3900 area. The break over that trendline may have been a break up over a rising megaphone resistance trendline with a target in the mid 6000s on SPX , but if that is the case, to confirm that target, the trendline would need to be backtested and hold into new all time highs on SPX.

Obviously the strength of this decline so far in January has surprised most, so I’d like today to review what the decline so far is telling us, and to talk about the monthly SPX chart.

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Same Old Same Old?

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I was quite intrigued by see an article on ZeroHedge which basically stated that a level had been reached in the stock market which had a 100% success rate for the buy-the-dip crowd. Naturally, I wanted to dig deeper, which is what this post is about. Here, very simply, is the SPY with a 100 day exponential moving average. I have taken the liberty of circling the areas at which, over almost two full years, the prices tagged the moving average, and indeed ZH is right; it worked 100% of the time. (And, if I was king-sized-douchey, I would say “Full Stop“, but God knows I am nothing of the kind, so I shall not type that cursed and absurd word pair).

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So Far So Good

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In my last post I was talking about an SPX target in the 4500 area as long as SPX stayed under the daily middle band. Since then we saw a short lived break above the daily middle band but SPX failed to convert that back to support and has delivered a new retracement low today.

I would note the open daily RSI 14 sell signal that I am expecting to reach at least the possible near miss target at 34-6 on the RSI 14 by the end of this move.

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A Big Picture Review

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In my post on Friday 6th August I was looking at a possible backtest scenario on SPX that could be setting up and I’d like to review how that is looking on my first post this year, as I think that backtest may well be delivered over the next few weeks.

That backtest would be of a huge resistance trendline on SPX that broke at the end of 2021 / start of 2021, and is currently in the 3850 – 3900 area. The break over that trendline may have been a break up over a rising megaphone resistance trendline with a target in the mid 6000s on SPX , but if that is the case, to confirm that target, the trendline would need to be backtested and hold into new all time highs on SPX.

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EFAvescent

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(NOTE: I composed this post, and did the screen shots, before the marvelous sell-off today; so the points all still hold, but more boldly than before!) I have mentioned the symbol EFA from time to time as a very intriguing long-term short setup. I have March 18th $82 puts on EFA which are presently down 16% in value. With 72 days left until expiration, I am not giving up on EFA (not yet, at least!) in spite of its recent strength. Allow me to offer a few chars to illustrate how overbought this instrument is. I’d also like to mention, as the first chart illustrates, that this is the first time since the start of the Covid crash (10 months ago) that there’s been a bearish exponential moving average cross-under. So………there’s hope!

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