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.

Overhead Resistance

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SPX, NDX and RUT have been rallying as expected, RUT made a new swing high first on Friday, NDX has made a new all time high today, and SPX has come within a few handles of the ATH retest but no cigar as yet.

I want to talk about the trendline resistance that I’ll be watching over the next two or three weeks during this likely bull window. The daily bollinger bands are so compressed that we could see a break up through these trendlines, or possibly see a break down before the cycle high window opens. The daily bollinger bands average about 3% to 4% between the upper and lower bands on the daily, and anything under 2% is compressed, and anything under 1.5% is very compressed. SPX is now at about 1%, at a degree of compression that has not been seen before in many years, and possibly never seen before at all. This is likely to resolve into a decent expansion, which should be downwards, but could be up. If it is going to be a break upwards then there are two important trendlines to watch.

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Advantage Bulls

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All charts used this morning were ones that I did at the weekend for the Trader’s Chart Service at theartofchart.net.

The NQ falling wedge that I identified on Wednesday last week defined the rest of the week, with the high on Wednesday night, the low on Thursday and the high on Thursday night, before the 70% bullish falling wedge broke up on NFP on Friday and retested the break on Friday afternoon. The obvious next target is a retest of the all time high, bolstered by the likely failure of the H&S on NQ and of the double top patterns on both ES and TF. NQ Sep 60min chart:

160903 NQ Sep 60min

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Ante Omnia Armari

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I’m concluding latin post title week with a phrase which means ‘before all else, be armed’. This market could get very interesting over the next few weeks, hard as that might be to imagine after the last few weeks. We must all be careful not to get caught on the wrong side of a trade that goes the other way hard. The mini-crash almost exactly a year ago followed an August daily band compression that was smaller than this one.

Decent market information is a useful weapon too of course, Stan and I are analysts rather than clairvoyants but on a good day it can be hard to tell one from the other. I’m particularly pleased with this video that I recorded last night for our Daily Video Service subscribers at theartofchart.net, which has given me a very nice morning and a great start to the holiday weekend. I’ll go through the calls on the companion bonus charts below, which were used in the video and then posted for subscribers afterwards. I’ve not included the ES and TF charts as I was mainly relying on the NQ chart for equity index direction, for reasons that should be obvious on the video and chart: (more…)

Auribus Teneo Lupum

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A less common latin phrase today and this one means ‘holding a wolf by the ears’, and I think that’s a decent description of what we are looking at on equities here with the frankly amazing amount of compression on the daily bollinger bands. My friend Mike Vacchi has looked back ten years and this level of compression is unprecedented in that time and possibly a lot longer. The range between the daily lower and upper band on SPX is down to 26 handles, about 1.2%, so the journey between them is down to a level where Yellen clearing her throat might take SPX from one to the other. What does this mean? Well it may mean that we are building to a very strong move in a direction yet to be determined. A hard compression considerably smaller than this one delivered the mini-crash a year ago. This is the sort of phenomenon that advises caution.

The bears woke up for a while yesterday but failed to take out Friday’s low or sustain the trend down into the afternoon. They did however close well below both the 50 hour MA at 2177 and the daily middle band at 2179.5, so that was still a bearish close, and yesterday’s move could follow through today.

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Noli Illegitemi Carborundum

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I’m having a theme of latin post titles so far this week, though I’m sure that some of you will know that unlike the last two, the sentence I’m using as the title today is joke latin rather than the real variety, and I’m using it as a description of what we have been seeing on equities here as bears waste their window of opportunity to deliver a correction in price here rather than just a correction in time.

It has been a while since I last posted here the bonus charts that I do every day for Daily Video Service subscribers at theartofchart.net on various futures every night (with update notes before the RTH open the next day). Given that equities seem so determined to be boring here, this is a good opportunity to show how interesting everything else is looking. I’ve added the overnight updates as well.

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