ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
Bitcoin (BTC/USD) has had an interesting – and surprising – relationship with the recent crash in financial markets. Bitcoin fell 39.1% on March 12th just as the crash was accelerating. The S&P 500 (SPY) continued to sell off for another week and a half after Bitcoin crashed. By the time the S&P 500 bottomed Bitcoin … Read more
Canadian Dollar After the Bank of Canada announced its latest update on monetary policy, the U.S. dollar gained about 1.7% on the Canadian dollar. I thought perhaps the Bank of Canada delivered some incredibly awful news. Nothing in the statement was a surprise. Indeed, the Bank of Canada essentially suggested it would not take rates … Read more
When the stock market sell-off began in earnest in late February, the U.S. dollar index (DXY) surprisingly plunged along with the major indices. I accepted the narrative explaining that the dollar’s decline came from the euro’s gain as “risk-off” traders rushed to close out euro shorts in carry trades. The swiftness of the risk-off move … Read more
My first warning on Bitcoin (BTCUSD) came when Bitcoin failed to push through overhead resistance from October’s brief and failed run-up (see the horizontal line above) despite the bullish case being made at the time about the breakout. The most convincing warning came when the cryptocurrency sold off with the stock market in late February. … Read more
In an earlier post on Sunday, I provided reasons to believe that the market was finally drawing a line in the sand for a sustainable bottom. With anticipation, I pronounced I would go on a shopping spreed down to S&P 500 (SPY) 2600. At the time of writing, it looks like I may have to … Read more
This post is a quick addendum to the Above the 40 post I published just ahead of a complete freefall in global financial markets. At the time of writing, futures are showing a 5% drop in the S&P 500 (SPY)! The crash is reflected in real-time in the currency markets. I actively watch the Australian … Read more
If there were ever a time for Bitcoin (BTCUSD) to soar, the Coronavirus-inspired sell-off in global financial markets should be that time. The cryptocurrency increased 6.7% this week, but that gain did not even finish reversing the last big down day on February 26th when the U.S. stock market dropped into oversold territory. BTCUSD is … Read more
AT40 = 7.0% of stocks are trading above their respective 40-day moving averages (DMAs) (oversold day #3, dropped as low as 5.1%)AT200 = 21.4% of stocks are trading above their respective 200DMAs (13-month low, dropped as low as 17.8%)VIX = 40.1 (was as high as 49.5%)Short-term Trading Call: bullish Stock Market Commentary Oversold I had … Read more
Fed to the Rescue If you are sitting at home wringing your hands about catching a virus from the outside world, I am guessing you are not exactly relieved to hear that the U.S. Federal Reserve may try to come to your rescue with more rate cuts. Yet, easy money is what central banks know … Read more
AT40 = 9.2% of stocks are trading above their respective 40-day moving averages (DMAs) (oversold day #2)AT200 = 26.8% of stocks are trading above their respective 200DMAs (near 13-month low)VIX = 39.2 (up 42.1%)Short-term Trading Call: bullish Stock Market Commentary Oversold The stock market is only into its second oversold day, but the technical extreme … Read more