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.

A Battle of the Bands

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NOTE: The charts below are all showing the new monthly pivots.

In my post on Wednesday morning I was looking at the pattern setups on SPX, QQQ and DIA and saying that these delivered a very nice setup for at least a short time high forming here. Yesterday we saw the first real signs of weakness since the early April low.

I’ve looked in many previous posts at the importance of daily middle band support or resistance in strong trends and I looked at that in this uptrend a few weeks ago. Until yesterday there had been no meaningful closing breaks of the daily middle band support on SPX, QQQ, DIA or IWM since these indices broke back above those in late April. That changed with very strong closing breaks below the daily middle bands on DIA and IWM yesterday.

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So Here We Are Again

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Every so often I talk about the way chart patterns form and how they can evolve, and I have some very good illustrations of what I mean by that to show you today.

When rising wedges form in a trend and break down, sometimes they are just expanding as they rise and, when we saw breaks down the initial rising wedges from the April lows on SPX and QQQ a few weeks ago, I was talking about how if further levels above were reached then the wedges were just expanding and I would redraw the support trendlines as unbroken. That would create a new inflection point as those new patterns broke down.

What I am looking for in these cases are high quality resistance trendlines to form, either extensions of the initial wedge resistance trendlines or new trendlines, and I have three very high quality examples of the latter to show you today.

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A New Normal on Trade?

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In my last post on Thursday 24th July I was talking about the inflection point forming here on equities and the two important possible triggers this week. The first of those was the trade deal being negotiated with the EU and that seems to have been agreed over the weekend, at a general level of 15%. This follows a similar agreement with Japan and means that trade deals in that kind of area have been agreed now with most of the largest US trading partners except China, Canada and Mexico, currently at higher levels.

This could be establishing a new normal on trade so I wanted to take a moment to review where this may be leaving us.

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