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.

Through A Glass Darkly

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SPX broke down and has retested the retracement low, as have NDX and Dow as well, but not yet IWM. This brings SPX and the other US indices to the key inflection point this year, where we see whether the move so far this year has been the formation of large bull flags setting up retests of the all time highs, or whether US indices are going to break down further directly.

What we have on the bull side here are possible buy signals now brewing on the weekly chart and clear high quality bull flags formed on SPX and Dow particularly, as well as on many other individual stocks and ETFs of course. On the bear side we have the worsening economy, rising interest rates and embedded inflation that the Fed are now admitting is not transitory. I would point out though that a retest of the all time highs might well not be a bullish development, as that might make the second highs on double tops large enough to then potentially retrace most or even all of the gains made since the 2020 low.

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Testing The Middle Band

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Yesterday’s bearish historical stats delivered hard and broke the bull flag setups that I posted in the morning. SPX is now testing the 4000 area and, if that breaks, the next target will likely be a retest of the retracement low at 3810.32.

I still like all the bull flags from the high here, but if SPX reaches the retracement low and continues down hard, there is an obvious target for that move. The H&S I have drawn on SPX from the high isn’t high quality, but it isn’t bad, and has a very obvious target in the 3400 area, which is a significant area because that would be a backtest of the pre-2000 crash all time high. In my view that would be the obvious target on a  break below 3600.

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Marking Time

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In my last post a week ago I was talking about the prospects on SPX for testing the weekly middle band, currently at 4312, on this rally, with particular reference to the very historically bullish two first days of June, which were the last two days. Unfortunately for the bulls, these were both wasted in a sideways consolidation, so reaching that target now looks more doubtful, and the odds of a break down before that target is reached have increased.

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Holiday Rally Setup

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SPX closed below the main SPX support/resistance trendline at the end of last week. This trendline has broken twice since 2009, and both times SPX followed through hard. In 2011 SPX broke very hard through it and never broke back over it until until 2020. In 2020 SPX broke over it, then closed the next week back below, and then didn’t close back below it again until last week. This is too limited a sample to extrapolate much from but there is precedent for failing to confirm the break the following week and then following through the break and so the likely weekly close back above today has precedent from 2020 and is not an obviously bullish development.

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