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.

Support Test and Inflection Point

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The research I am doing on the 45dma over the last 25 years is a bigger job than I expected so I should have the post out on that next week.

In the short term though, equity indices have been looking pretty interesting and and are at a significant short term inflection point here. The first part of that is that the daily middle band was tested on SPX at the current low today, and that is the key short term support level. There have been a couple of breaks below that in the last few weeks but there has been no daily close below it since SPX broke back over it in early November. If seen, a clear daily close below it would be a significant technical break. Without that break, a retest of the current all time high would be the obvious next target.

SPX daily chart:

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The M2 Channel

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My fondness for ratio charts is unbounded. Allow me to share three of them with you that I believe illustrate how prone the market is right now to a sell-off.

The first is the Dow Jones Composite divided by the M2 money supply. The nature of the current bull market is different than the prior two. In those – – during what were relatively normal times- – – the market ascended, carved out a topping pattern, and then plunged.

Since the Fed has taken their manipulation up to “11”, the market doesn’t have the opportunity to create a rounded top. It does, however, yield a fairly clean channel, and we are mushed at the top of that channel right now.

slopechart COMPQ FR M
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