ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
Word went out Friday that BP is considering offering $5 billion in bonds paying 8-10% with 5-10 year maturities. These bonds will likely also be unsecured. Given the real risk this company may not be around to see another birthday, I have to assume only the most yield-hungry investors will paw at this offering. I … Read more
Two weeks ago, I wrote “Sellers Step Out of the Way” to describe an impressive rally from oversold conditions on poor volume on May 27th. The S&P 500 closed up 3.3% that day, just short of the 200-day moving average (DMA). Today, the index finally hurdled over the 200DMA resistance for the first time in … Read more
I last wrote about the Australian dollar during its worst slide since the financial crisis. At the time, I claimed that the slide was probably good for a short-term bounce, but the currency could easily go even lower given macroeconomic concerns. Since then, the Australian dollar has firmed up nicely and formed a potential “W-bottom” … Read more
Risk Index Spike Means Carry Trade ‘Sell-off,’ Barclays Says – BusinessWeek A gauge of risk has surged to the highest level in 15 months, signaling investors are reversing strategies of borrowing money in countries with low interest rates to invest in high-yielding assets, Barclays Plc said. (tags: forex trading_strategy carry_trade) A quintuple nine-to-one up day … Read more
First Solar (FSLR) has been stuck in a downtrend for two years (see chart below). The stock has traveled a volatile path through this trend, providing strong trading opportunities up or down. For example, a sharp two-month rally from the March, 2009 lows doubled the stock price. Insider buying earlier this year provided a convincing … Read more
In December, 2009, Federal Reserve Chairman Ben Bernanke insisted that gold’s surge was not signaling increased inflation expectations because it was simply following along with the general rise in commodities. Now that gold stands head and shoulders above the commodity pack, Bernanke is expressing his bewilderment at gold’s strength. Gold is still not a signal … Read more
At the heights of the stock market’s low-volume spring rally, Ambac Financial (ABK) soared 72% and the 105% on two consecutive days. ABK was up another 50% the next day before closing with a 28% loss. The upward surge was quite startling given ABK was pretty clear in its earnings report at the time about … Read more
I am always intrigued by the words of optimism and the steadfast bullish arguments in the midst of market sell-offs. I am not talking about technical assessments calling for a short-term bounce. I am talking about the “everything is just fine” variety. Monday’s Nightly Business Report provided a picture-perfect example of such talk from Bernarnd … Read more
While the euro catches all the headlines about its tremendous slide against the U.S. dollar, the British pound has followed closely behind. The pound has lost 12% against the U.S. dollar since its January peak while the euro has lost 18% in that same time. The pound has lost 15% since its post-recovery peak in … Read more
The 2004 Fed Transcripts: A Methodical, Diabolical Destruction of America's "Wealth" The Federal Reserve releases transcripts of the Federal Open Market Committee (FOMC) meetings with a five-year lag (as required by law, the Fed would like to burn them). Transcripts for 2004 meetings were released on April 30, 2010. The Dow Jones Industrial Average fell … Read more