ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
AT40 = 63.4% of stocks are trading above their respective 40-day moving averages (DMAs)AT200 = 55.1% of stocks are trading above their respective 200DMAsVIX = 12.9Short-term Trading Call: neutral Stock Market Commentary The stock market is keeping the faith. The previous week ended with a U.S. GDP report for Q1 2019 that represented well the … Read more
Housing Market Intro/Summary In the March Housing Market Review, I described how the iShares US Home Construction ETF (ITB) was breaking out despite an unimpressive collection of housing data (in the aggregate and trendwise). Last month, I updated my analysis of the seasonal trading strategy for home builders and pointed out the historical tendency for … Read more
AT40 = 61.6% of stocks are trading above their respective 40-day moving averages (DMAs)AT200 = 53.9% of stocks are trading above their respective 200DMAsVIX = 12.7Short-term Trading Call: neutral (change from bearish) Stock Market Commentary The week ended with a U.S. GDP report for Q1 2019 that represents well the state of the stock market: … 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 Reserve’s program of monetary tightening has been fighting the bond market since the process began about 3 years ago. Over that period, the Fed has painstakingly tried to hike rates in a way that would avoid roiling markets. Unfortunately for the Fed, long-term rates on U.S. Treasuries failed to cooperate and barely budged … Read more
The Swiss National Bank (SNB) released its latest decision on monetary policy on Thursday, March 21. Apparently the warnings from the SNB were drowned out by the rallies in financial markets that day. The SNB dropped its growth forecast, its inflation forecast, and reiterated that economic risks are biased to the downside. I took particular … Read more
AT40 = 54.1% of stocks are trading above their respective 40-day moving averages (DMAs)AT200 = 38.8% of stocks are trading above their respective 200DMAsVIX = 16.1Short-term Trading Call: bearish Stock Market Commentary The above tweet begins the dilemmas that lay ahead for short-term trading after I first flipped bearish ahead of Thursday’s selling. First, I … Read more
It is time to abandon my bullish expectations for the Australian dollar (FXA). On March 6th Philip Lowe, the chair of the Reserve Bank of Australia (RBA), reminded financial markets that the near future holds the same likelihood for a rate cut as it does a rate hike: “There are plausible scenarios under which the … Read more
The latest airing of Marketplace included a segment titled “Making sense of housing market data.” The segment explained the five key housing data points that Marketplace uses to gauge the health of the housing market: housing starts, new home sales, existing home sales, pending home sales, and the Case-Shiller Home Price Index. In my monthly … Read more
After reading the February 6th Address to the National Press Club of Australia by Philip Lowe, Governor of the Reserve Bank of Australia (RBA), I am not so sure the market “got it right.” The following statement alone was used to suggest that the RBA might cut rates in the near future: “Looking forward, there … Read more