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 first trading week of November was action-packed. At the start of the week I looked ahead to monetary policy from the Federal Reserve and the October jobs report as key catalysts. While those events were indeed important, the stock market was treated to an overlay of at least two other important … Read more
Stock Market Commentary The market took just one more day to resume the momentum of expanding market breadth. An extreme October set up this bullish start to November with fresh all-time highs for major indices. While small caps as a group just missed an all-time high, the surge in small caps drove a bullish expansion … Read more
Stock Market Commentary The S&P 500 (SPY) bounced back from September’s woes for a 6.9% gain for the month of October. While the gain is extreme, I am even more interested in a different October extreme. Somehow, the index managed to skate through October without a notable drawdown. The maximum drawdown in October for the … Read more
Stock Market Commentary A week ago I pointed out the key signs suggesting the bear cycle was likely already ending. Last week, the S&P 500 (SPY) confirmed the end of the bear cycle with fresh all-time highs. Yet, consistent with this year’s theme, market breadth was left behind in catch-up mode. The momentum on both … Read more
Stock Market Commentary I turned bearish on the stock market over two weeks ago. Last week began with confirmation as sellers followed through on a fade from a brief rally. Mid-week, the downward momentum came to a screeching halt as buyers took over most of the trading action. I pointed out the key signs suggesting … Read more
Stock Market Commentary The strong start to September which characterized the persistent complacency in the stock market soon gave way to the kind of selling that characterizes one of the most dangerous months of the year. September came to a bearish end with a 4.8% loss on the month for the S&P 500. The index … Read more
The Follow-Through: Strong Start for Stocks The month of September enjoyed a strong start as last week’s fairy dust from J-Pow continued to work its magic. Short-term market breadth with AT50, the percentage of stocks trading above their 50-day moving averages (DMAs), also continuing higher while leaving behind the longer-term breadth indicator in AT200, the … Read more
The Follow-Through: Quick Hits Weakness still lingers from the oversold bounce, but two trades I mentioned in my last Market Breadth post turned into quick hits in the first two days of trading this week. On Monday, Tesla (TSLA) quickly hit my initial profit target on a calendar call spread. I also snagged the calendar … Read more
Stock Market Commentary The stock chickens have come to roost on declining market breadth. The stock market indices still generally appear fine, but an ever growing swath of individual stocks have fallen further and further behind. Last week in particular, sellers delivered an extended beating on individual stocks. The signs of waning confidence in the … Read more
Stock Market Commentary The stock market melt-up took a one day break. The signs of trouble were ever more clear ahead of the break. Something was wrong with the picture in the stock market. Yet, sellers could barely follow through. The S&P 500 stumbled with a gap down, but buyers stepped right back in at … Read more