ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
The Bank of Canada changed its tune from the its last pronouncement on monetary policy. At that time, the Bank was very confident about the Canadian economy even as it mapped out the downside risks of the U.S. vs China Trade War. The Trade War remains unresolved three months later, and the Bank of Canada … Read more
This is a moment of truth for the stocks of homebuilders. The iShares Dow Jones Home Construction ETF (ITB) last week hit a 21-month high that exactly coincided with a climactic high in January, 2018. The subsequent selling this week seemed to unfold like clockwork. The selling was particularly notable given the S&P 500 (SPY) … Read more
Overall Assessment I am neutral on Pulte Homes (PHM). The company’s Q3 2019 earnings report was good but not spectacular. I am warily eyeing year-over-year net income and earnings per share declines even as the company experiences robust demand and buys back shares. Most importantly, with a 2.0 price/book ratio, PHM is relatively expensive compared … Read more
AT40 = 59.3% of stocks are trading above their respective 40-day moving averages (DMAs)AT200 = 53.9% of stocks are trading above their respective 200DMAsVIX = 13.1Short-term Trading Call: neutral Stock Market Commentary A Sufficient Resolution Seems about right. Just as I switch from a (cautiously) bearish stance to neutral, the stock market throws more definitively … Read more
AT40 = 59.4% of stocks are trading above their respective 40-day moving averages (DMAs)AT200 = 53.1% of stocks are trading above their respective 200DMAsVIX = 12.7Short-term Trading Call: neutral (see below) Stock Market Commentary A Sufficient Resolution I still harbor lingering skepticism, but the S&P 500’s recovery from the last hiccup and its subsequent slow … Read more