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 A liquidity-driven bounce off support took a small breather last week. The major stock market indices ended the week with a small loss. On the way there, overbought trading conditions ended for a day. As the major indices languished, the stock market dipped in and out of overbought conditions on an intraday … Read more
Bollinger Bands (BBs) are a powerful trading tool. They define an expected range of volatility in a stock based on recent price action. When that volatility contracts, the Bollinger Bands squeeze into a narrow channel. The resolution of that squeeze – to the upside or downside – can create a powerful continuation of or change … Read more
Stock Market Commentary What a week to start the year’s trading. It started with a definitively bearish end to extended overbought conditions. Overbought conditions bullishly resumed in the middle of the week despite an insurrection in Washington D.C. The week ended with a confirmation of the freshly bullish sentiment in the market. The trading action … Read more
Stock Market Commentary The extended overbought period still looks tenuous. For the second trading day in a row, AT40 (T2108), the percentage of stocks trading above their respective 40-day moving averages (DMAs), broke down below the overbought threshold of 70% before closing at 73.0%. The major indices do not reveal these weakening overbought conditions. The … Read more
Stock Market Commentary The Federal Reserve signaled an incremental improvement in its economic outlook by making an allowance for limited stock repurchases and dividends by the country’s top financial institutions. As a result, bank stocks apparently soared in after hours trading. That fresh rally in financials should extend to a positive open on Monday and … Read more