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.

A Promising Start (by Springheel Jack)

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Yesterday's bearish engulfing candlestick was on SPY daily chart was a refreshing change of pace. SPY gives a much more accurate picture of opening and closing positions than SPX due to data feed issues at Stockcharts and most other places. No idea why that should be but I've corresponded with Stockcharts about it and they tell me there's nothing they can do to correct this. 

As we saw with (cough) AAPL the other week, a bearish engulfing candlestick needs to be confirmed with a lower close the next day. The stats for this aren't encouraging from recent history. This is the sixth bearish engulfing candlestick on SPY in the last 18 month, and not one of the last five confirmed with a lower close the next day. Of those five only one (November 2010) was at the start of a significant retracement. These stats are from an excellent chart posted by my friend Cobra at his subscriber site. 

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Dow Theory Divergences (by Springheel Jack)

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The dip buyers had yet another great day yesterday as the large opening gap down was swiftly converted into a new high on SPX since the March 2009 low. That new high isn't a break with confidence of very strong 1370 area resistance yet, but if it does break with confidence then that opens up targets in the 1400 to 1440 area as you can see on the 6yr daily chart. My preferred trendline target would then be possible channel resistance in the 1410-20 area, with my reserve target being the 2008 high at 1440.24. 

There is one other thing well worth noting from the chart below. Major tops on SPX are generally preceded by a sizable counter-trend spike that sets up either a head and shoulders pattern, or a double-top or bottom. We have seen no such counter-trend spike for quite a while now, and it's unlikely that we would see a major top without one. That counter-trend spike would generally precede the high for the year by a couple of months:

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Topping is a Process (by Springheel Jack)

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That was a very nice day for the bears yesterday until the rally in the last hour wiped out the day's losses. Overnight ES has broken to a new high and so far the broken resistance area at 1352-3 is now holding as support. Technically however, despite all the drama, nothing much has changed on the SPX chart apart from a double pinocchio of support from Dec 19th that is suggesting a bigger break downwards soon. Short term I have trendline resistance in the 1362 area, and support is now in the 1344-5 area. The 2011 high was at big resistance in the 1370.6 area and that isn't far away now:

120215 SPX 60min Trendlines

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