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.

Limbo Dancing

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SPX followed through to the downside yesterday and we have now seen the opposite of the many V shaped recoveries that we have watched on SPX over the last two years. It has been a while since we have seen one of those. SPX closed back under the daily lower band, confirming the end of the rally. SPX still needs to break under last week’s low at 1926, and under that I have the 38.2% fib retracement of the 2014 rising wedge at 1912, and both main double-top support and the 200 DMA at 1904. For the full retracement scenario back under 1800, that 1904 level is the important level that must be broken. SPX daily chart:

141008 SPX Daily Trendlines BBs MAs

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Slip Sliding Away

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Crude oil, viewed by way of the fund symbol USO, nailed its technical target 33.68 (marked with the lower horizontal red line in the chart here). It seems stalled there, but it’s not exactly bouncing; given the break beneath the ascending blue trendline, perhaps crude oil is in for some more serious damage. My short idea, XOP, offered up several weeks ago, has done great (as has the more aggressive version, ERX), but those still have plenty of room to fall – – -so perhaps, in spite of all the insanity in the Middle East, crude oil is going to keep weakening.

1007-uso

Cards on the Table

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I was saying on my daily SPX chart yesterday that if we were going to see a move directly to the double top target at 1937.70, then I was expecting that move to start yesterday, and obviously that’s what we saw. The low yesterday was at 1941.7, and we may well make that full double top target today.

This move was an important point of recognition and I think it is likely now that the market is starting a 10% or more correction, though we haven’t yet had the full confirmation of that move that would come with a conviction break below the 1904 low on SPX. That 1904 level is the support level on a large double top that would target the 1789 area on a break below 1904, and that 1789 level is very close to both the 23.6% retracement level for the move up from October 2011, and rising support from that same low. (more…)

Feeling the Pinch

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SPX touched the daily upper band at the high yesterday and also tested the 50 hour MA at the low, so the two key targets that I gave yesterday morning were both made. So what now? Well I’m still looking for a (hopefully marginal) new all time high, so I’m looking for at least one more test of the upper band, but once there SPX is at a fork in the road and I’m going to talk about the bull and bear scenarios there.

The daily bands are pinching sharply here and that means that there is a very high probability that SPX is shortly going to start either an upper or lower band ride lasting at least three days and possibly much more. I’ve marked the last four daily band pinches on the chart below. The direction is unknown though the odds I gave yesterday of a downward resolution here at 2 to 1 is where I see the odds of the band ride here as well. What this means in practical terms, given that SPX tested the daily upper band yesterday, is that if we now see a strong new high, then this is most likely resolving upwards. (more…)