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.

Short Term High Probably In (by Springheel Jack)

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I sent the following tweet out shortly after the highs yesterday morning:

If we are going to see a reversal on SPX soon, odds favor the high this morning. Hit the top SPX rising wedge. Hit support Vix falling wedge.

After the retracement yesterday I think the odds are excellent that a short term high is in, and my retracement targets on SPX would be a test of support in the 1305-10 area, though that would be disappointingly shallow, then a test of rising support from November in the 1270-80, and if that was broken then main support from the October low in the 1250-60 areas. Those last two targets have ten point ranges because they are moving targets, and the exact target would depend on when those trendlines were reached. The lowest risk long entry IMO would be at the test of rising support from the November lows, with a stop below the rising support trendline from the October lows:

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Fed Expects Stagnation – BUY! (by Springheel Jack)

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Well that was a wild Fed day yesterday and the news was that the Fed is so confident that current policies won't work that it will leave real interest rates negative until the end of 2014. Equities surged on what passes for good news nowadays. Bernanke was surprisingly candid in the questions afterwards, and admitted that current interest rate policies were in effect a massive redistribution from savers to borrowers. No getting anything past that guy it seems. In a country so resistant to tax rises it seems remarkable that this (in effect) massive redistributive tax on savers, worth a conservative $300m per year to the government alone, attracts so little attention. Funny old world.

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The Ten Year 2.10% and Market Tops (by Piker Trader)

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Ten Year:  Since October the 10 year has remained in a tight range and now it is testing the top of this range at 21.00 or a 2.10% yield.   TNX test the top of this range on Monday and has since backed off of it.  Since October there has been a pattern in the market with TNX as it hits 21.00 .   Each time TNX gets to this level it foreshadowed the next "dip" in the market.  It occurred in November and December and also back in  September.  

Overall: Watch 21.00 on the then year, if it breaks above it the market will rally but as of right now based on some of the stalling action going on and the pattern that has formed with TNX a dip lower is more likely. 

Checkout more post at Pikertrader.com

Wild Card Fed Day (by Springheel Jack)

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Some are born great, some achieve greatness, and some have greatness thrust upon them.

I'm a Shakespeare buff so you'll to put up with the odd quote. This one is from Malvolio in Twelfth Night and the relevance today is that the same sort of gradation could be applied to trendlines, which might then go:

Some trendlines are clear early, some become clear later, and some arrive so late that you've stopped looking for them

In this case the low yesterday on SPY and SPX was at rising support from the December 19th low. I've been complaining for weeks that the there was no decent support trendline from there, and I wasn't even looking for it yesterday. Nonetheless, it is now established and it is now therefore also clear that we are looking at a rising wedge from that Dec 19th low. We might yet see a new high within that rising wedge, but it should be marginal. Wedge resistance is under 1330 SPX and I'd be extremely surprised to see the wedge break up with confidence here. Here's the updated setup on the SPX 30min chart with the wave count:

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Looks Promising (by Springheel Jack)

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The rising support trendline for the current move up on SPX broke and retested yesterday, and the setup for a retracement here looks very promising. That retracement should stay above 1267 SPX unless we see a major bearish break. The rising wedge target is 1277 SPX and an IHS may be forming with a target in the 1296 SPX area. ES has broken strong support at 1305 overnight which is also encouraging:

I have a nice looking rising channel on NDX as well with channel support in the 2400 area. That's worth keeping an eye on as the next obvious trendline support is a long way below:

The moment of truth for gold is here, with it starting to test the double resistance at declining resistance and the broken 150 DMA yesterday. A break above would look very bullish but a failure here obviously just the opposite. Until that resistance breaks this is a short entry level of course:

Given the geopolitical situation on oil, I should be seeing some bull setups on CL (March) here, but I'm not. There is double resistance overhead at broken support and declining resistance, and this chart would at least look less bearish if that is broken. Until that happens however I'm seeing an H&S target at 92.5 and if CL gets below the double-top neckline at 92.9, the double-top target is 81.8. Both targets look ambitious given the current situation with Iran, but unless we see a break up through double resistance not far above, CL has a very nice topping setup here with targets a long way below current levels. From a technical perspective the decent risk/reward swing setup is still short:

EURUSD has so far fallen 18 pips short of the 1.308 target I gave yesterday, but has reversed at a possible alternate sloping neckline for the IHS that I think maybe forming here. Ideally it would now retrace into the 1.285 area to form the right shoulder, and if it were to play out then the IHS target would be in the 1.35 area. Negative divergence on the 60min RSI looks promising for retracement here:

On the bigger picture for USD, a significant bounce for EURUSD should set up the right shoulder on a possible much larger IHS on USD that would target the 90.5 area. There is a question in my mind as to whether the battered Euro can manage a strong bounce here, but a retrace on USD into rising support in the 77 area would set up a very nice USD long play. As ever time will tell:

ZB hasn't made my downside target at 139'25 or declining support in the 140'10 area, but is nonetheless showing signs that it may be making a short term low here. I'm watching the steep declining resistance trendline for a break up. RSI also looks promising:

I'm leaning short today, but we might yet see a bounce from the overnight lows and the gap fill looks possible unless SPX gaps below 1309, in which case it will seem less likely. Retracements have been disappointingly shallow lately, but I'm ideally looking for the SPX rising wedge target at 1277 as my downside target in a retracement that should last two to four days. After that I'll be looking for a move up to higher highs unless we see a breach of 1267 SPX, which would cast my current view on SPX into doubt.

I'd love to call a major interim top here but I'm not seeing that as likely yet. There are a couple of charts that would support that though, and I'll certainly be watching my line in the sand at 1267 SPX in case of a break below. The first bearish chart that I haven't posted today is my 6yr SPX chart that shows a perfect test of declining resistance from the 2007 top at the high yesterday. The second chart is the Vix chart, which triggered a Vix Sell (equities) Signal with the close back within the daily BBs yesterday. A higher Vix close today would confirm that signal and that would promising for a high here, though the track record of these signals is somewhat mixed. We shall see.