As suggested late last week, the emerging markets (EEM) has done a U-turn precisely where it should have. My short positions and puts both say “thank you!”This market has been breathtakingly consistent all of 2018.
Slope of Hope Blog Posts
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As sneering as I’ve been to cryptos all year, I’ve got to say, they’re starting to show signs of stability. Personally, I still have no use for them, but Bitcoin has exhibited an increasing “hominess” at around the $6500 price level. It has tried several times to break below $6,000, but it has succeeded four times in turning away from that failure point.
Looking at the average rises and falls on SPX from the start since 1997, the most bearish straight sequence of days of the year are the six days from 19th September through 25th September. Within those six days, usually including the September quadruple witching, the lowest percentage of positive closes is 23rd September at 26.67% and the highest is 25th September at 35.71%. Markets are closed on the 22nd and 23rd this year of course, so that leaves Monday and Tuesday next week leaning historically bearish, and Wednesday through Friday leaning an average of 62% bullish. There is a significant possibility of a retracement in the early part of next week, and there is a decent looking setup here for that.
Update on ES, NQ, CL, NG, GC, SI, HG, ZB, KC, SB, CC, ZW, ZC, ZS, DX, EURUSD, USDJPY, USDCAD, AUDUSD: (more…)
In spite of lifetime highs on the Dow Industrials and the S&P 500, some short positions are having quite good days. One in particular is defense giant Northrop Grumman which, as the chart shows below, is getting whacked. This stock has been carving out a series of lower highs for months now.
Well, it was another one of those weekends where we were treated to all manner of market scares (“Trump is going to announce tariffs on $200 billion more of goods!”………..”China is going to walk away from trade talks!”………..”Oh noes!”) and yet, here we are just before the open on Monday morning, and the ES has collapsed all of 1/10th of a single percentage point. I can’t say I’m surprised.
One market that continues to behave As God Intended ™ is the bonds, whose pattern I’ve been following all year long. The head and shoulders pattern on it is glorious, and it seems to me that interest rates are simply going to continue stomping higher (which will do wonders for a planet buried in countless trillions of dollars in debt). The recent failure of this pattern (magenta tint) is, to my mind, the most significant market event to take place in years (the crypto revolution notwithstanding which, let’s face it, has enriched all of our lives beyond measure).
On August 22, when BABA reported strong earnings, I noted to members that “lousy technical price action” saw the initial 4% gain in reaction to the news give way to a 5% downside reversal.
I wrote: “The interesting aspect of the downside reversal is that the intraday high smacked into key resistance at the June-Aug resistance line AND the horizontal 200 DMA, both in the vicinity of 186.60. This is very negative technical action, and indicates to me that all of the action in BABA from the 8/15 low at 165.39 to today’s high at 186.50 represents a completed recovery bounce, and the initiation of a new downleg that should break the 165.39 low, which could unleash a very powerful decline towards 130-125. Last is 174.35/50.”
Fast-forward to Monday and today (September 10 and 11), and we see on my big-picture chart of BABA that it has broken down to a new reaction low at 152.85 so far, continuing last week’s decline that sliced below a MAJOR year-long support zone at 164.25 to 166.60 (indicated in our 8/22 discussion). (more…)
Since I was writing on Friday the bull flag megaphone has broken up, a rising wedge formed on ES into yesterday’s high and then that wedge broke down with the obvious target at a retest of the retracement low. So far however this has delivered higher lows on SPX and ES, and ES is again testing key resistance at the weekly pivot at 2884. On a break and conversion of WP the obvious read would be that the next leg up has started, although ………
Partial Premarket Video from theartofchart.net – Update on ES, NQ:
Monday’s market wasn’t exactly a hallmark of dynamism, so I don’t have any particular these to write about. I’ll just share a couple of charts that I found intriguing.
The first is emerging markets, which has been persistently bearish all year. Just look at those lower lows: not a single violation! It seems to be approaching some form of support. A failure at that level, where the lines converge, would set us up for a new phase lower.
Apologies for the lack of updates this week. I’ve been reorganising my office which has been time-consuming though very satisfying. The video below is the full premarket video that I do every morning at for subscribers and there are quite a few charts at very interesting stages, most definitely including SPX/ES here.
When I was showing the SPX 15min chart in the video I was saying that ideally there would be an early rally today into the mid-2880s to test bull flag megaphone resistance, before a reversal back down towards bull flag megaphone support, now in the 2858 area. That trendline is declining at about 7.5 handles per day so will likely be in the 2854 area by the end of the session.
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:
The unraveling continued overnight with the market leader Bitcoin………