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.

QE Rhymes (by Springheel Jack)

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I've been mentioning the comparison with the start of QE2 almost every day since QE3 was announced. QE2 was also trailed in advance, with a steep rise into the announcement, a break up on the announcement over the daily bollinger bands on SPX, and then a short term high there that was followed by a retracement. Obviously SPX in the wake of the QE3 announcement has been following the same script so far, and that may well continue, as the stats for Mondays recently, and also for this week historically, are both flat to down. Here's the chart of the QE2 period showing the post QE2 announcement retracement on SPX:

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Dow Theory Musings (by Springheel Jack)

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ES broke declining resistance overnight and we may be seeing the start of a move to test the highs, very possibly to make a double or M top for the retracement that I am expecting to see. The main alternate scenario is that the retracement low is now in and we are seeing the start of a new wave up and that's possible, but I'm leaning strongly against that at the moment. 

On the SPX 60min chart the retracement from the highs so far looks like a bull flag, which is a good reason to think that we might see a test of the highs soon. If this rising channel on SPX from the June low is going to hold, then the maximum likely within that channel would be in the 1380-5 area, with the upper bollinger band in the 1482 area today. Equally if that channel is going to hold then the main retracement has not yet got going, and I have a possible target for that at the intersection of rising channel support and the May high in the 1415 area at the start of October:

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Forks in the Road (by Springheel Jack)

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Every so often you reach an important fork in the road where a market must take one way or the other, and once taken, the option not taken becomes very low probability. Yesterday was such a day. I told my brother in the morning that if we were going to see a major top on equities in 2012 then that was likely to be yesterday around 1440 SPX. Obviously QE3 was announced in the afternoon and 1440 was broken with a lot of confidence. I'd like to see that confirmed with a weekly close today over 1450, but I'm now no longer seriously considering the possibility of a major top in equities in 2012, and am writing off all the huge bear patterns that have formed over the last three years on many instruments and indices as a huge bear trap. I'll be expanding on that with various charts in the next few days but it what it is, and we are where we are. The trend is now most likely up well into 2013. 

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SPX at Key Resistance Test (by Springheel Jack)

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Obviously I've been talking about this likely SPX test of pivot resistance in the 1440 area for a while now, and with the SPX close on Friday at 1437.92, that test is obviously upon us. There is very strong resistance in the 1440 – 1450 area, and it is made up first of that pivot level resistance, and second at double trendline resistance just under 1450. 

The first of those resistance trendlines you can see on the 60min chart, and it is the resistance trendline for a rising wedge that may be forming from the June low. Only two touches of the upper trendline so far so the trendline is not confirmed:

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