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Courtesy of Elliott Wave International, and used with permission:
Why We Are Watching 2021
The April Elliott Wave Theorist is a rare video issue on the outlook for three key market sectors – stocks, commodities and interest rates. Editor Robert Prechter delivered this presentation on January 18, 2021. Interest rates have followed the script by rising sharply, and they have more to go. Commodities gained since that time as well. The current price action in the stock market makes now a good time to keep in mind our timing work in that sector.
We’re going to look at a 200-plus year chart of U.S. stocks prices. The data is the Dow Industrial Average going back to the 1880s. Prior to that, it’s data from different indexes that newspapers and other sources kept back in the 1800s.
Early this year, I took a deep breath and uttered what I thought was a laughable price target on Bitcoin, which was based on its Fibonacci extension. The target was above $73,000 and, hard as it may be to believe, we’re getting awfully close, with “only” about 15% to go.
That meme-iest of meme stocks, GameStop, which I wrote about yesterday, is finally slipping (I bought puts yesterday in my Slope virtual account). What is fascinating to me is how obedient the prices are being with respect to the Fibs. Check out resistance (red arrows) and support (green arrows).
I’ve got to say, I am utterly annoyed with so-called “precious” metals. One would think that, at least in part, the forces behind the explosive rise in cryptocurrency values have the same effect on gold. Nope! Bitcoin, shown below, is exploding higher, whereas gold is just sitting around picking its nose. The metaphor is just as repulsive as gold’s lackadaisical behavior.