Slope Of Hope with Tim Knight

An Interesting Discrepancy!

Interesting SPY/TLT Ratio

Here's what (SPY/TLT) looked like as of last night:

And here's what happened at the green-arrow point last August:

Priceless

As regular Slopers know, I've been touting my 2008/2011 $HUI analog quite a bit. I thought it would be interesting to show it in ProphetCharts without any price data.

I've augmented this graph with a trio of simple moving averages. The left arrow shows where we were in late July 2008, and the right arrow shows where we are right now, 37 months later.

From 37 months - if you add 3 and 7 together, you get 10, and if you in turn add 1 and 0 together, you get 1, a Fibonacci number. OK, OK, just kidding.

In any case, I think this is a fascinating parallel. Stay tuned.

 

Giving Back

Over the many years (nearly six!) I've been writing this blog, I have received hundreds of nice emails and gifts. Today I got a particularly nice one, which I am showing here with the author's permission:

I just wanted to say thank you – for both your blog and ProphetCharts.  I have been reading the blog for about a year now (and just began posting), and have been using Prophet for nearly as long.  As soon as I started using thinkorswim I really fell in love with it.

So – I spend half my life using things that you’ve created, and given how much money I’ve made in that time, I thought I owed you a thanks, at the very least.  And a few clicks on your blog’s ads once in a while, when I’m feeling saucy.  You’ve taught me (and I’m sure thousands of others) more than I can really say, so, one more time – thanks!

I really appreciate that, and I'd like to take up the theme of gratitude. Besides the aforementioned support of Slope's sponsors, I'd like to ask Slopers, as I do from time to time, to give a little to those less fortunate. Being the sort with a soft spot in his heart for animals, I tend to suggest Best Friends Animal Sanctuary, but honestly, be the target charity oriented toward humans or animals, this is the season for sharing.

And it doesn't hurt that it's still in time for 2010 tax deductions! In any case, thanks for being part of this marvelous community, and thanks especially to those who extend a helping hand to others. See you Monday morning.

Cavium and a Lesson in Perspective

It occurred to me recently that one of the mental trip-ups that can happen when looking at a chart is to think that a chart has "bottomed" or "topped" simply because the price has reached an extreme within the frame of the chart. Mentally, I suspect, we subconsciously assume the border of a chart represents some kind of boundary. This limits us, in my opinion, to seeing just how high (or low) a chart can ultimately go. The only "limit", after all, is $0.

One long position I have, Cavium, is a good example of this. Looking at the chart normally, it seems to have "topped out". But when I use the Resize Graph feature in ProphetCharts, I can make a lot of white space above the current price to see more clearly the potential blast higher a stock like this could take. (You can learn about Resize Graph, or any other ProphetCharts feature, in my book, naturally).

Irrespective of all this, I think it's an interesting graph as a long position:

New Filter Feature in ProphetCharts

Confidence Indicator

Here's a fascinating synthetic indicator you can construct in ProphetCharts with the ratio symbol shown in the graph. By dividing the Fidelity Capital & Income Fund by the Long-Term Treasury Fund, you can get a sense as to the relative values (and willingness of the investing public to take risk) over a long period (in the graph shown below, over a decade) and see major inflection points in the market.

I think it's healthy to keep the big picture like this in mind, days like 9/1 notwithstanding.

Ribbon Study and the S&P

I was going through all the technical indicators in ProphetCharts today, and I found something rather interesting about the Ribbon Study. Looking at the daily chart, the ribbons (which are made up of sixteen different moving averages) tend to "harden" to show broad turning points, creating strong support or resistances for the price action. I don't latch on to many technical indicators, but I confess that I found this was thought-provoking:

Gold's Upward Push

Friend-of-Slope Gary Savage has been touting precious metals a long time, and he's certainly been doing well lately. As an experiment, I punched in (GLD/SPY) in ProphetCharts to see what the ratio chart would look like, and here it is:

GLD is very close to pushing past its all-time high of June 28th. If it does, it'll be interesting to see just how high it goes. Gary writes that gold and the Dow will reach a 1:1 ratio ultimately (example: 6000 on the Dow and $6,000/ounce for gold, or whatever the prices may be). We shall see!

Jerking Back and Forth

There's a new version of ProphetCharts (a product you can learn so-much-more-about here!) and I wanted to point out a couple of spiffy new features.

First off, there are "Previous" and "Next" buttons, located to the left of the symbol entry. These let you thumb back and forth through charts you have seen before. For instance, if you enter ten symbols, you might want to "flip back" to see what you were just looking at, so these buttons let you move back and forth through your symbol history, much like a browser.

We've also added Sectors, a new module. This is really terrific, not only because the sectors and sub-sectors have individual symbol components, but also because the sectors and sub-sectors themselves are chartable! I had great fun last night looking at 10-year daily line graphs of these various groups. "Top-down" traders are going to love this!

I hope you enjoy these new ProphetCharts goodies; there are more on the way all the time.