ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
{revised August, 2024} The Most Dangerous Months The stock market’s most dangerous months are August, September, and October. Since 1951, the S&P 500 (SPY) has suffered its three highest average maximum drawdowns in these months. A drawdown occurs when sellers put downward pressure on prices. The maximum drawdown is the largest (most negative) such loss … Read more
Stock Market Commentary August was a breeze, and the stock market strolled in September. A few pebbles rolled into the path this week. The indices delivered divergent behavior which brings up familiar themes of rotation. Most notably, the rotations pressured market breadth as small caps in particular displayed fresh signs of weakness. The Stock Market … Read more
Overall Assessment I am bullish on Tri Pointe Homes (TPH). The Tri Pointe Homes Q2 2021 earnings report delivered strong results, including records for home sales revenue, pre-tax profit, and the value of the backlog. Management reported familiar themes of strong demand and constrained inventories across demographics and geographies. Margins improved as the company once … Read more
Stock Market Commentary The stock market breezed through August and now strolls into September. The S&P 500 breezed to a 2.9% gain for the month of August, its seventh month in a row of gains. The NASDAQ breezed even higher with a 4.0% gain for August. The stroll into September ignored the disappointment in the … Read more
Housing Market Intro and Summary Despite more evidence of slowing conditions in the housing market, home builder stocks remained relatively resilient in August. The underlying dynamics of demand remain in place even as housing prices remain lofty and continue to conjure up images of a housing bubble for market commentators and pundits. A supportive Federal … Read more