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 In announcing the official end of monetary tightening, Federal Reserve Chair Jerome Powell mentioned some form of the word “recalibration” nine times from his introductory statement to the Q&A portion of the press conference. Specifically, “….it’s a process of recalibrating our policy stance away from where we had it a year ago, … Read more
Stock Market Commentary The S&P 500 is down 4.1% month-to-date. This loss makes this month a below average September for a maximum drawdown and fulfills September’s reputation as one of the index’s three most dangerous months of the year. As I noted last week, August’s extreme drawdown significantly increased the risk of September being worse … Read more
Stock Market Commentary This year’s Jackson Hole confab hosted by the Kansas City Federal Reserve delivered for financial markets. In his prepared speech, Fed Chair Jerome Powell issued an historic and classic sound bite for all of the history of monetary policy (emphasis mine): “The time has come for policy to adjust. The direction of … Read more
Stock Market Commentary Welcome to the start of the stock market’s three most dangerous months of the year. A weak jobs report for July helped to send market sentiment into a sharp reversal. The bad economic news suddenly turned the prospect of rate cuts into something to fear. These rate cut fears spun the market … Read more
Stock Market Commentary Bears still look ready to bow out, but they still have their paws firmly planted on high-tech stocks, especially semiconductors. The market rotations out of tech are nudging enough stocks higher, especially small caps, to rechallenge the threshold defining overbought conditions for market breadth. The stark divergence in stocks greatly reduces the … Read more
Stock Market Commentary A plunge in market breadth on Wednesday made me expect a more bearish take on the markets for my next blog post. A sharp rebound led by strong earnings from various retail companies, quickly changed the narrative from a continued NVDA hangover to a bullish divergence and then a bullish setup. Friday’s … Read more
Stock Market Commentary The simple and quiet breakout for the stock market found follow-through last week. Both the S&P 500 and the NASDAQ hit fresh all-time highs during the week. The April CPI (consumer price index) report paved the way on Wednesday’s all-time highs. A softer than “expected” number revived hopes for a rate cut … Read more
Stock Market Commentary A curious break in the trading action unfolded as financial markets wrestled with two “disappointing” inflation reports. Both the CPI (consumer price index) and wholesale inflation (the producer price index or PPI) came in slightly higher than “expected” (headline and core). The data just tell me expectations are unrealistic or at best … Read more
Stock Market Commentary A decisive end to the extended overbought period signaled the arrival of bearish conditions last week. Bears boldly sold for one more day before a “stock bulls taunt” forced suddenly hesitant bears into a partial retreat. A sharp market divergence is now taking hold. While the major indices rallied off support and … Read more
Stock Market Commentary The stock market got a case of the uglies last week. The end of summer trading transitioned right into a swift drawdown for the stock market’s second of the three most dangerous months of the year. The fresh breakdowns in the major indices accompanied new lows for market breadth. Suddenly, what I … Read more