ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
When U.S. President Donald Trump threatened to close the U.S. border with Mexico last November, the U.S. dollar was in the process of making a major top against the Mexican peso (USD/MXN). When Trump threatened a border closure again on March 29th, oddly enough, a minor relief rally in USD/MXN came to an end. At … Read more
Major central banks typically cut interest rates in response to economic stresses; they ease when the data force them to do so. Some important exceptions in recent history happened 1) in 2016 when Mark Carney’s Bank of England cut rates as a cushion against the potential downsides of the pro-Brexit vote, and 2) when the … Read more
“The federal funds rate is now in the broad range of estimates of neutral–the rate that tends neither to stimulate nor to restrain the economy. As I noted, my colleagues and I think that this setting is well-suited to the current outlook, and believe that we should be patient in assessing the need for any … Read more
Time for me to buy iPath Bloomberg Cocoa SubTR ETN (NIB) again. NIB gapped down to start the week at least partially on the news of a surplus from the Ivory Coast. From Reuters: Cocoa arrivals at ports in top grower Ivory Coast reached 1.547 million tonnes between Oct. 1 and March 3, exporters estimated … Read more
AT40 = 76.8% of stocks are trading above their respective 40-day moving averages (DMAs) (25th overbought day)AT200 = 45.8% of stocks are trading above their respective 200DMAsVIX = 13.6Short-term Trading Call: neutral Stock Market Commentary The trading action on the major indices is practically a broken record. An extended overbought rally just grows older and … Read more