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.

Hope Springs Eternal (by Xerxes)

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Friday sucked for bears, no two ways about it. I was so excited by the resistance I was seeing on a weekly chart that I even posted my “Reversal Wicks” entry before the week ended. Then the one market action which I mentioned would ruin my pattern happened on Friday, based on rumor and whispers of Fed rate slowdowns (not even a full pivot to easing) to make the market rally*. This tells me two things: 1) The bulls are so damn eager to jump on anything bullish that even a whisper will send stocks into a tizzy and 2) Shorts are weakhanded down here so we end up with this choppy no decision action.

Well, this week happened so I just need to adjust and deal with it. There are six trading days left in the month, so we’ll have to prepare for potential market movements starting with the monthly chart.

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One More High Needed……Probably

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Last Friday there was a clear break back below the 5dma, and that was a fix under the Three Day Rule. On this rule SPX should retest the last low at 3491.58 before any retest of the prior high at 3806.91. I haven’t counted but there have been nine previous fixes in 2022 and I’d be surprised if this rule hasn’t fixed well over 100 times since the start of 2007 and on the current rules for this, after a small tweak in 2019, there has not yet been a failure, although there have been two marginal higher lows when triangles were forming at the lows.

I have mentioned that there is no such thing as a perfect market stat, and that I would therefore expect to see a fail on this stat at some point, but there’s no particular reason to think that would be here. I have been asked this week what I would expect to see if it does fail here but, as that hasn’t happened before, I have no idea, though it would open the next possible resistance level in the 3900 area.

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No Such Thing As A Sure Thing

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On Friday morning I was writing that SPX went back onto my Three Day Rule on the break back over the 5dma at the close on Thursday night. Under that rule, if either of the next two closes delivers a clear break back below the 5dma, then the prior low, in this case 3491.58, will be retested before the prior high, in this case 3806.91. There was a clear close back below the 5dma on Friday, so that is a fix on the rule.

Now this is the most impressive performing market stat that I have ever seen anywhere about anything. There have been nine previous fixes so far in 2022, all of which made target and I’d estimate somewhere in the region of 100 – 200 fixes since the start of 2007, which is as far back as I looked when I first investigated this in 2011/2. With a minor rule fix in 2019 requiring a clear close below the 5dma for a fix, every one of those has made target barring a couple of very near misses when a triangle has been forming at the low.

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