ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
Housing Market Intro and Summary A month ago, housing-related stocks managed to stabilize despite deteriorating data. Reality caught up in June with a fresh round of selling in the stocks of home builders. A surprising jump in new home sales provide some relief for an otherwise on-going din of negative housing news. The National Association … Read more
TLDR: Coinbase Global, Inc (COIN) did not directly answer the question about a new disclosure: can a bankruptcy filing by Coinbase result in the loss of a customer’s assets? The Rolling Disaster I am one unhappy Coinbase (COIN) shareholder. After alternating between buying and shorting COIN at much higher levels, I finally settled on buying … Read more
The reaction to the Q1 2022 earnings report from KB Home (KBH) symbolizes the skepticism that enshrouds housing-related stocks when the economic cycle turns against them. KBH management was almost as bullish as can be during the earnings conference call. Yet, sellers took KBH down the next day by 4.6%. Last week, KBH tested its … Read more
Stock Market Commentary I gave the summary for the week in my last “Market Breadth” post. I will just add here that the stock charts are full of images of a stock market running low on fuel. I tell just a small part of the narrative below. Stock Chart Reviews – Below the 50-day moving … Read more
Stock Market Commentary Trading with on-going headline risk is difficult for bulls and bears. I find it useful to pick a narrative, pick an anchor, and stay as disciplined as possible. My foundation remains with the principles of trading contrary to extremes. Last week, the market tested the extremes of oversold trading conditions and survived … Read more
Stock Market Commentary I earlier wrote about a promising divergence between anxiety and breadth in the stock market. However, I cannot help rubbernecking the market’s crashes and accidents. They tell dramatic stories about the folly in price action that can come with easy monetary policy and free money. The market goes through cycles of excitement … Read more
“…certainly with valuations where they are, I’m sure we’re going to go through a doozy of a correction this year. At some point. I don’t know when. And I don’t know why. But I do know, it never hurts to take profits and to keep some powder dry so that you have the psychological wherewithal … 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
Credit Suisse downgraded Peloton Interactive (PTON) from outperform to neutral. The analyst at Credit Suisse also slashed their price target from $112 to $50. Despite a price target higher than the previous day’s closing price of $40.70, PTON still fell 5.4% to $38.51 and a 19-month low. So why did PTON sink on an analyst … Read more
Splunk (SPLK) started last week with a gap down and 18.1% plunge in the wake of the resignation of CEO Doug Merritt. I thought the sell-off was an over-reaction given Graham Smith, the Chair of Splunk’s Board of Directors, stepped in to play interim CEO. However, the accompanying preliminary Q3 earnings report gave me pause. … Read more