Divergent Fortunes and Trends – Housing Market Review (June, 2020)

Housing Market Intro and Summary I asked in my last Housing Market Review whether the housing downturn could already be coming to a swift end. The stocks of home builders delivered that message and more and more earnings reports from home builders are apparently delivering messages of a sharp recovery. A widening divergence between existing … Read more

A Stock Market On Edge – Above the 40 (June 26, 2020)

Stock Market Statistics AT40 = 40.1% of stocks are trading above their respective 40-day moving averages (DMAs) (2-month low)AT200 = 20.1% of stocks are trading above their respective 200DMAs VIX = 34.7Short-term Trading Call: neutral Stock Market Commentary After a one-day respite, the damage in the stock market continued. This time, the damage was more … Read more

Soliton: How to Trade A Secondary Stock Offering

Last week, I anticipated that Soliton would announce a secondary offering of stock following the release of a successful trial of its cellulite treatment. Soliton (SOLY) delivered with after hours news of a secondary stock offering in the form of an SEC filing. So now what? At the time of writing, traders responded to the … Read more

A Trampling at the Frontlines of the Stock Market – Above the 40 (June 24, 2020)

Stock Market Statistics AT40 = 47.9% of stocks are trading above their respective 40-day moving averages (DMAs) (2-month low)AT200 = 21.5% of stocks are trading above their respective 200DMAs VIX = 33.8Short-term Trading Call: neutral Stock Market Commentary The damage in the stock market is only visible upon close examination. The top technicals for the … Read more

Stock Market Risk and Reward from Rising VIX and End of Overbought Period

AT40 (T2108) closed at 68.7% and once again dropped out of overbought trading conditions.

The financial markets have presented numerous extremes during the coronavirus pandemic. I rely on the percentage of stocks trading above their respective 40-day moving averages (DMAs), aka AT40 (T2108), as a measure of oversold (below 20%) and overbought (above 70%) extremes in the stock market. In just three months, the stock market went from printing … Read more

Why Lennar and Other Home Builder Stocks Failed to Rally On Good News

The Message in Home Builder Sentiment The National Association of Home Builders (NAHB) reported a tremendous surge in the sentiment of home builders. The Housing Market Index (HMI) soared from 37 in May to 58 in June. Just two months after suffering a historic plunge, sentiment among home builders is right back to positive territory. … Read more

Overbought Period Ends With A Trapped S&P 500 – Above the 40 (June 19, 2020)

Stock Market Statistics AT40 = 68.7% of stocks are trading above their respective 40-day moving averages (DMAs) (ended 5 days overbought, over 70%)AT200 = 25.7% of stocks are trading above their respective 200DMAs VIX = 35.1Short-term Trading Call: neutral Stock Market Commentary When the NBA suspended/cancelled its basketball season in March, I wrote about how … Read more

Soliton: What Awaits the Stock After News on Cellulite Trial

“The Company’s cash, cash equivalents and restricted cash on hand is sufficient to fund the Company’s operations into December 2020 but not beyond.” This quote from the May 14 earnings report from Soliton (SOLY) is tattooed in my mind as I consider the implications of the company’s recent good news on cellulite treatment. On June … Read more

Bottoming U.S. Dollar Ends Bargain Shopping in Mexican peso, South African rand

The U.S. dollar index (DXY) continues to pivot around its 200-day moving average (DMA). Last week, the U.S. dollar bounced before retesting the lows from March. The U.S. dollar now looks ready to challenge its 200DMA as resistance; it will likely complete another cycle by rallying at least to the previous highs above the 200DMA. … Read more