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.

Idiot or Elliott?

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You’ve surely heard of the disparaging term “Idiot Wave” applied to “Elliott Wave.” It seems rude and dismissive, although I’ve got to say, very few techniques have had more to do with me prematurely thinking the top was in than good ol’ EW, so I don’t bristle too much at the put-down. As I’ve mentioned, I’ve found EW to be very helpful in bear markets, but in bull markets, it’s been pretty much a disaster.

Below are a few charts from the good folks at EWI, and I’ve got some remarks about these charts as a whole.

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Theory of Relativity

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As you probably know, the S&P 500 is not calculated by adding up the closing prices of the 500 component stocks and dividing by 500. Instead, it is weighted based on market cap. This, the company with the largest market cap of $4 trillion, NVDA, would be about 40 times more impactful to the value of the S&P 500 compared to, say, DoorDash, with about a $100 billion market cap.

If the 500 components all moved up and down the same degree, the equal-weighted S&P would be in lockstep with the “normal” market-cap-weighted S&P, and for many years that was pretty much the case. In recent years, however, the standard S&P has been outpacing the equal-weighted one to an increasing degree.

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The RUT Index May Be About to Pull Back

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Here below is a synoptic view of the DAILY situation for the 3 main US indices: the RUT is the one that appears to be overbought (82% probability of DAILY reversal).

At the close today, the RUT Index was showing this scenario: 3 days up, closed at 2263.41, the time model (right hand side) shows 87% probability of reversal after 3 days up, when this particular trend pattern is encountered.

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