ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
(This is an excerpt from an article I originally published on Seeking Alpha. Click here to read the entire piece.) {snip} Two months ago or so, a friend directed my attention to Jeremy Grantham’s GMO Quarterly Newsletter for April, 2011 titled “Time to Wake Up: Days of Abundant Resources and Falling Prices Are Over Forever.” … Read more
I keep hearing the ominous statistic that no sitting U.S. President has ever won an election with unemployment over 7.2%. I finally decided to look more closely at the numbers after I read another version of this statistic that said no U.S. President since the 1930s has ever won an election with unemployment over 7.2%. … Read more
2011 has been a rough year for Google (GOOG) as the stock continues to underperform relative to the S&P 500. GOOG is down 14% year-to-date while the S&P 500 is up 6.5%. I was premature in mid-May speculating that GOOG had finally reached some kind of bottom in the wake of its bond-offering. However, a … Read more
On July 1, 2011, Brett Arends wrote in MarketWatch a piece lambasting groupthink and crowd psychology in “Dominique Strauss-Kahn and your money; Commentary: Wisdom of the crowd comes into question yet again.” The article was an intriguing way to relate the rush to judge DSK in mass media in the absence of complete information to … Read more
(T2108 measures the percentage of stocks trading above their respective 40-day moving averages [DMAs]. To learn more about it, see my T2108 Resource Page.) T2108 Status: 70% and overbought. VIX Status: 16. General (Short-term) Trading Call: Close more bullish trades (longs), initiate new bearish trades (shorts). Commentary The S&P 500 closed the week with a … Read more
Greenspan on QE2, Greece and the Debt Ceiling (Fed's Massive Stimulus Had Little Impact) – CNBC The Federal Reserve's massive stimulus program had little impact on the U.S. economy besides weakening the dollar and helping U.S. exports, Federal Reserve Governor Alan Greenspan told CNBC Thursday…On Greece, Greenspan a default is likely…Greenspan was also pessimistic about … Read more
In mid-May, I warily eyed copper as it looked ready to lead the correction in commodity prices into a complete breakdown (see “Silver Fails Resistance; All Eyes on Copper’s Support“). However, over the past six weeks, copper prices have held firm by clinging to the 200-day moving average (DMA) line of support. Source: Stockcharts.com This … Read more
(T2108 measures the percentage of stocks trading above their respective 40-day moving averages [DMAs]. To learn more about it, see my T2108 Resource Page.) T2108 Status: 60% and neutral. VIX Status: 17. General (Short-term) Trading Call: Hold. Sell a few more longs and start identifying potential shorts. Commentary The current 4-day rally exhibits the kind … Read more
Copper Sector Set to Shine on Growing Demand – TheStreet Even though copper is down from its all-time high of $4.62 a pound, analyst reports continue to project that robust demand from China will help boost prices toward the end of 2011. On the supply side, analysts say that copper is in the midst of … Read more
The slogging has been a little tough since I recommended buying First Solar (FSLR) on the other side of an earnings disappointment. FSLR did disappoint and after the stock broke down from post-earnings consolidation, I insisted the stock remained a buy even as short interest reached new highs. After bouncing 11% so far this week, … Read more