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.

1-2-3? (by Springheel Jack)

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Obviously I've been posting a lot of seriously bearish looking long term charts in recent weeks, and I should take a moment just to emphasize that I don't think that it's time yet to buy in a large supply of ammunition and baked beans and head for the high ground in preparation for the end of the world as we know it. What I am saying is that these setups need to be borne in mind as part of the overall technical mix, and that these patterns being at a late stage of development, at a time when we are looking at the potential for the forced breakup of the eurozone and a string of possible sovereign defaults, is definitely something to think about. I'll be posting some more of these charts today looking at US equity indices. 

Short term however we have a distinctly bullish looking setup developing on SPX after the deep retracement from Tuesday's high. Obviously the declining channel from the high was broken on Tuesday, which was bullish. The deep retracement after Tuesday's high to establish a higher low has then set up a possible W bottom, which has a target in the 1365 area on a break over Tuesday's high at 1328.49. This setup also looks classically like a first wave up, followed by a deeply retracing wave 2, and that would put us currently in a wave 3 up so we'll see how that develops. There are a couple of other comments to add about this however. 

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The Euro Crumble Continues

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Ummm, I thought we'd get a few weeks – maybe even a few months – of a rally in assets, but it seems to have lasted about as long as a 16 year old boy at the end of a really successful prom date.

I sold all my longers earlier today (almost all of them profitably, particularly TBT), but I am remaining cautious on the short side. As of this writing, I am 30% committed, 70% in cash. It's pretty stunning how the Euro is simply unable to get off the mat. Here, yet again, is my long-term target for the Euro:

0522-euro

Possible Bounce Setup (by Springheel Jack)

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SPX made a lower low yesterday and finally tested the 1340 support level. There has been no conviction break as yet. While that remains the case, and with the proviso that I'm expecting more downside and any bounce here will therefore be counter-trend, I'm thinking we may well see a relief bounce here. On the ES 15min chart the falling wedge I posted yesterday has broken up, with the low yesterday slightly below the wedge support level that I gave yesterday morning. With the decline yesterday afternoon a promising W bottom setup has also formed. On the next move over 1345 the pattern target is 1357.25, and we may well see that today or tomorrow, though the chances of seeing that will drop significantly if ES breaks below rising support at 1338 this morning:

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Flying (from the) PIIGS (by Springheel Jack)

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The RSI divergences on the SPX 15min chart have been working very well in recent weeks, and that flipped to sell in the closing hours yesterday in the zone of strong resistance marked on the chart. My lean is therefore down today, though I'd normally expect a sideways to down day after a trend day in any case. As with the last signal the divergence is slight though:

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