ES has been compressing for a couple of days now, forming a likely bull flag for the next leg higher. That may have made a low overnight or may have a bit lower to go before the next leg up begins. A break and conversion to support of the current short term high at 2863.75 ES should clear the path to the all time high retest. Partial Premarket Video from theartofchart.net – Update on ES, NQ:
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I am back from holiday and normal updates are resuming today.
The retracement last week was larger than expected and established a larger rising channel from the 2691.99 low that is part of the larger overall rising channel from 2594.62. Shorter term channel support is now in the 2803 area, and I’m looking in the video below at a possible short term retracement to backtest the new weekly pivot at 2824 ES / 2825.5 SPX, support by the 50 hour MA currently at 2823 SPX. Ideally we would test and reverse there to start the main move to the retest of the all time high. Full Premarket Video from theartofchart.net – Update on ES, NQ, CL, NG, GC, SI, HG, ZB, KC, SB, CC, ZW, ZC, ZS, DX, EURUSD, USDJPY, USDCAD, AUDUSD: (more…)
Together, the 5 FAANG stocks + 5 tech stocks make up FNGU (an exchange traded note that tracks 3x the daily price movements of an index of US-listed technology and consumer discretionary companies…the index is highly concentrated and equally weighted).
The following 1-year and 2-month daily charts of these 10 stocks, FNGU, plus INTC, show price action relative to their 20 and 50-day MAs, as well as the Rate-of-change (ROC) technical indicator.
Ten out of twelve of them have broken their uptrends, some more recent than others, while others have been mired in sideways consolidation zones for months. “Shock drops,” together with high volumes and accelerating ROC, occurred last week on FB, TWTR, INTC and FNGU, while NFLX experienced those on July 17 and is attempting to stabilize. (more…)
Not much has changed since the last 3 Amigos macro update. Amigo #2 (long-term yields) has long-since reached the Continuum’s ™ limiter (the 100 month exponential moving average on the 30 year Treasury yield) and Amigos #1 (SPX/Gold) and #3 (the 10-2 yield curve) are still on their respective trends (up for SPX/Gold and flattening for the yield curve), indicating a positive and risk ‘on’ macro backdrop.
Of the 3 wacky riders, with Steve Martin now having gotten home and Martin Short a duller indicator (and lesser light), let’s focus on the Chevy Chase Amigo. There he is on the left, a look of triumphant joy on his face riding one-handed with his arm up in the air. Not a care in the world (as Steve Martin braces for the impact of Continuum’s limiter). (more…)
Sometimes as I cook with my older children we take a moment to discuss the great issues of our times and, after a quick foray this afternoon into the placebo effect and alternative medicines, my son and I decided to tackle the important matter of adapting Schrodinger’s famous quantum physics experiment to fit the perspective of our labrador/poodle cross Pippa.
As Pippa’s main and possibly only interest is in food, we decided to replace the cat with bacon, which would be placed in the same locked box with an atomic clock that, at the key random point of atomic decay, would now trigger a process that would perfectly grill the bacon. The bacon would therefore exist in a quantum probability cloud state of cooked/uncooked until the moment that the state was crystallised by Pippa’s observation of the bacon, obviously through smell rather than sight. (more…)
Last week I was looking at the high quality setup for a retracement but was looking for a modest move to the all time high retest on RUT before that got going. Today we are looking at SPX having gone considerably higher and at the time of writing RUT has still not delivered that full retest, though it came close at the high this morning. I did mention that the correlation between SPX and RUT tended to be rather variable.
Full Premarket Video from theartofchart.net – Update on ES, NQ, CL, NG, GC, SI, HG, ZB, KC, SB, CC, ZW, ZC, ZS, DX, EURUSD, USDJPY, USDCAD, AUDUSD:
I was talking about on Tuesday about the likely short term high forming here and that process is now further advanced and possibly finished, though I think that the odds favor another short term high retest before the retracement that should follow.
Just to recap, we are expecting a short term retracement retracement to follow, lasting perhaps a week and taking SPX back into the 2750-70 range before another leg up starts that might carry SPX up to the all time high retest.
In the short term an hourly RSI 14 sell signal has now fixed and a daily RSI 5 sell signal is brewing. Key short term trend support is at the 50 hour MA, currently in the 2798 area, and if we see a high retest from here I’d expect that to be the second high of a small double top. SPX 60min chart:
As you can see, a rising Gold/Silver ratio (GSR) attended the market stock market disturbances in February and March and a declining GSR has attended the relief, i.e. the expected ‘top-test’ by the S&P 500 that has ground on since roughly the same time that GSR topped in late March.
The GSR has spent a lot of the post-financial crisis era in dysfunction mode, but so far in 2018 it is working as we’d normally expect; it rises with market liquidity contraction and declines with risk ‘on’ and an absence of liquidity events.
So, is that indeed a bull pattern? Can we assign such TA to a ratio as opposed to a stock or an index? Valid questions, but all things being equal stock and/or commodity bulls would probably rather not see a pattern like that. What can’t be argued is that gold’s ratio to silver has been increasing for a month now. (more…)
I was expecting a modest retracement in my last post and we have seen one. I was looking at the setup on the premarket video today and there is a probable short term low here testing support at the ES weekly pivot, open gap support on SPX and the 50 hour MA. We should see a short term higher high next and that will likely be setting up a larger retracement to follow. That’s working out so far.
Partial Premarket Video from theartofchart.net – Update on ES, NQ:
You have better things to do than read droning macro analysis or long, drawn out investment theses. It is a weekend in the dead of summer and for that reason we go easy this week; real easy.
The 3 Amigos are here to simply say that things are as they have been, with Amigo #2 (long-term yields) getting home and pulling back on cue, and the other two (SPX/Gold ratio & Yield Curve) still in process and indicating risk ‘on’ and ‘boom on’, respectively.