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 stock market indices enjoyed an impressive year. However, weak and declining market breadth produced numerous exceptions to the strong performance of indices and ETFs. A number of important and well-known individual stocks corrected, collapsed, and crashed in 2021. For some, the tailwinds of the pandemic ran out. For others, investors tired … Read more
Stock Market Commentary It was a close call. The technical deterioration of the previous week put the Santa rally in peril. At the start of trading last week, the Grinch roasted Santa enough to ignite oversold trading conditions. Santa’s revenge came in the form of a sharp rebound out of the 1-day oversold period. Subsequently, … Read more
Stock Market Commentary In last week’s decision on monetary policy, Federal Reserve Chair Jerome Powell directly and fully acknowledged inflationary pressures in the economy. Perhaps lost in the inflation buzz was Powell’s quick commentary on financial stability during the Q&A session: “…asset valuations are somewhat elevated, I would say.” Of course, various folks in the … Read more
Stock Market Commentary The stock market’s dip into oversold territory lasted a day. Subsequent trading has carved out a new divergence. Big cap stocks like Apple (AAPL) and Microsoft (MSFT) helped bullrush the S&P 500 into an all-time high while a wide swath of stocks were left behind. Accordingly, market breadth is languishing again. The following stocks charts … Read more
Stock Market Commentary The stock market rebounded out of oversold trading conditions but ended the week in ugly fashion. The combination produced fascinating snapshots of an ugly oversold bounce. Expensive growth stocks are rapidly falling out of favor while a convergence of negative headlines and uncertainties is painting plenty of ugly all over the stock … Read more
Stock Market Commentary For one day, the stock market suddenly cared about rising inflation numbers. The recovery mode is already underway. After slamming into the wall of inflation, the stock market is now climbing the wall of inflation. On Friday, in its survey of consumers, the University Michigan had the following to say about the … Read more
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 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 Last week opened with a gap down amid hand-wringing about the potential for contagion from debt problems in China’s property market. However, the week ended like nothing happened. The major indices even managed marginal gains after the dust settled. As is so often the case, the Federal Reserve, under the comforting words … Read more