In our permabull, new-highs-every-day market of ours, it is still worth examining the major cash index charts. I have been remarks about each chart in the caption area.
Index Review
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.
Wild Thing
In my post on 28th April I was talking about the Hormuz crisis but noting that when SPX made a new all time high on 19th February 2020, well after it was so obvious that COVID-19 was going to be a big problem that panic hoarders had caused a worldwide shortage of toilet paper, it reached a major resistance trendline and I was speculating that we might see that again here, giving a trendline target 200 handles higher in the 7360 area.
In my last post on 6th May I was looking at the resistance trendline again on the SPX weekly chart and that rising trendline was being close to being hit in the 7385 to 7400 area. It has since been hit and exceeded in what might be a bearish overthrow, but a have also since drawn in an alternate high-quality resistance trendline that is being hit today. SPX could go a bit higher, but the obvious upside trendline targets have now been hit.
(more…)Not There Yet
If the long-term picture provides for precious metals to beat the stuffing out of equities, the patterns have been playing out beautifully. However, for an impatient person like me, I have to admit that there’s plenty of room left for stocks to rally (or metals to weaken) until we fully retrace the massive topping patterns that have already been put in place.
Sell in May ……….
The old market saw goes that you should sell in May and go away, and rarely if ever in my view has that been more true than it is this year.
That isn’t to say that equity indices can’t go higher in the short term. I wrote a post on Tuesday looking at possible upside targets on SPX and QQQ that I would like to see hit, and have more modest upside targets on DIA and IWM that I’ll also look at today.
When we see the high for this move made, whether at those targets or lower, I think the prospects for equities over the summer look bleak. I covered some of the reasons for that in a post last Thursday on my The Bigger Picture substack looking at why the Iran War was largely irrelevant in the context of the economic shock being created by the closure of the Strait of Hormuz. If you haven’t already read that I’d suggest that you do that.
(more…)Deja Vu All Over Again
In my post at the start of last week I was looking at the escalating economic shock that is the closure of the Strait of Hormuz, but also noting that the lack of patterns on equity indices from the late March lows were nonetheless looking higher.
US equity indices haven’t gone up a lot since then, with the exception of an impressive performance on QQQ, but I’m still thinking that SPX and QQQ in particular may go higher still and have some trendline targets to put forward in the event that turns out to be the case.
First though I’d like to look quickly at the current status of the Iran War and then take you on a walk down memory lane looking at the weeks before the last really big crisis in equities, which was of course the early weeks of the pandemic in 2020.
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