ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
Stock Market Commentary The S&P 500 (SPY) finally broke down and succumbed to the selling pressure building up in the stock market. A “surprise” surge in inflation as measured by the Consumer Price Index (CPI) delivered the headline catalyst for a day of broad-based selling. Given market breadth was already in the process of narrowing, … Read more
Stock Market Commentary The stock market is a cauldron of contradictions and divergences. Breakdowns below key support levels abound. Stocks suffer post-earnings fades even after companies report strong results, especially in both beaten up growth stocks and resilient big cap tech. Yet, the S&P 500 just rises above the steady erosion of market breadth with … Read more
The Federal Reserve released its report on Financial Stability with an interesting emphasis on potential vulnerabilities from “elevated risk appetites”. The Fed included an evaluation of valuation measures. The report even called out “meme stocks” as part of its evidence. However, the report stopped short of calling the market outright over-valued. Instead, the Fed took … Read more
The Surge The prices of commodities, materials, and their related stocks benefit greatly from the current reflationary macroeconomic environment. One more materials name hit an important milestone this week. Steel company Nucor (NUE) surged right through an all-time high last set in May, 2008. Since last year’s pandemic-drive plunge, NUE has enjoyed its most sustained … Read more
Why Sell In May? “Sell in May” is an old stock market adage that advises investors to sell in May and leave the stock market alone until November. According to Investopedia, the adage identifies May through October as a period of under-performance. The adage survives despite its persistently poor performance as a stand-alone strategy. For … Read more