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.

Bear Necessities

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Unfortunately the week has become dominated by the news relating to the possible imminent invasion of Ukraine by Russia. At the time of writing there has been no invasion, and the consensus view this morning seems to be that there is no credible sign that Russia is backing down yet either. We’ll see, but news could move this tape a long way in either direction.

At the close yesterday SPX closed slightly back over the daily middle band, currently at 4465. Only a slight break, more of a close on the band than over it, but a follow through today would open a possible test of the monthly pivot at 4519.

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A Valentine’s Day News Massacre

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Equity indices failed as I was expecting on Friday, but not necessarily for the reason that I was expecting, as it may have been primarily a news reaction to the alert from the US government that Russia is preparing to invade Ukraine within the next few days.

These came as unexpected news to many, possibly including the Russian government, which has requested that the US expand on this news further, and it may not be true of course, but either way there is a huge two-way news risk that will hang over the next few days and could deliver large moves in either direction.

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Testing The Weekly Middle Band Again

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I was saying in my last post before the open on Tuesday that if SPX kept testing the daily middle band as resistance every day then another attempt to break back above it was likely and we saw a modest close back over the daily middle band at the close on Tuesday. That followed through to the upside yesterday and yesterday’s close was a confirming close back over the daily middle band, now in the 4506 area, and a test of main resistance at the weekly middle band, now in the 4583 area.

SPX daily BBs chart:

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Knock Knock

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We did our monthly free public Chart Chat at theartofchart.net at 4pm EST on Sunday looking at the options on equity indices as well as looking at the usual wide range of other markets. If you’d like to watch the recording that you can do that here or on our February Free Webinars page.

At the closing print of January an RSI 5 sell signal fixed on the SPX monthly chart. There was already an RSI 14 sell signal fixed but the RSI 5 sell signal is a much more reliable and shorter term signal that has much improved the odds that SPX will deliver the ideal backtest of the 3800 – 3900 area that I’ve been writing about regularly since my August 6th post last year.

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Break And Rejection

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Note from Tim: I woke up inexcusably late (6 a.m.) and was flabbergasted and absolutely stunned to see futures all red, at least for the moment. So this is what a bear market feels like, eh? I thought so. Anyway, I’m going to get off stage and let Jack to the talking, since I’ve got bulls to slay.

I was saying yesterday that if there is a rejection on the day after a break back up over a middle band, it is generally on the next candle, and we saw that yesterday. I also said that after a rejection there is generally a follow-through to the downside, and we’ve been seeing that on ES overnight so far.

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