ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
The latest CFTC data on the Commitments of Traders (CoT) shows some important moves in the positioning of speculators. Australian dollar (FXA) While the price of iron ore plunged, bullishness on the Australian dollar (FXA) remained surprisingly strong. I am almost equally surprised to see this bullishness now in full scale retreat as iron ore … Read more
AT40 = 42.8% of stocks are trading above their respective 40-day moving averages (DMAs) AT200 = 54.3% of stocks are trading above their respective 200DMAs VIX = 12.0 (volatility index) – a 17.9% decrease Short-term Trading Call: neutral (bullish only after the latest Trump Turmoil reverses OR oversold conditions, potentially bearish upon a retest of … Read more
I am surprised Fed futures traders still firmly expect a rate hike from the U.S. Federal Reserve in June. Source: CME FedWatch Tool After the stock market sell-off in the wake of more Trump turmoil, the market pegged the odds of a June rate hike from the U.S. Federal Reserve at 64.6%. Above 50% means … Read more
AT40 = 36.5% of stocks are trading above their respective 40-day moving averages (DMAs) AT200 = 51.2% of stocks are trading above their respective 200DMAs VIX = 15.6 (volatility index) – a 46.4% increase!!! Short-term Trading Call: neutral (downgrade from cautiously bullish) Commentary Time to downgrade my cautious bullishness to neutral. The S&P 500 (SPY) … Read more
I may have flipped outright bearish on the U.S. dollar index (DXY0) just in time. My change in sentiment started with my increasing bullishness on the euro (FXE). With the euro constituting about 51% of the U.S. dollar index, I realized that it would be hard to remain bullish on the dollar overall while adopting … Read more
Ahead of the second and final round of the French Presidential election, I noted a burst of euro-optimism. That optimism continued in the form of speculators turning net bullish on the euro for the first time in three years. Source: Oanda’s CFTC’s Commitments of Traders While this flip from bearish to bullish for the first … Read more
The Trump-wind blowing against the Mexican peso is officially over. In late April, I noted how net non-commercial positions (speculators) in the Mexican peso flipped bullish for the first time in two years just as the peso completely reversed its losses from the election of Donald Trump as U.S. President. I showed how prior changes … Read more
I finally have to release my long-standing bullishness on the U.S. dollar index (DXY0) even as the dollar recently managed to bounce off its critical, uptrending 200-day moving average (DMA). Source: FreeStockCharts.com Looking at this chart, I get the feeling of something that is biding its time for a definitive catalyst that pushes it down … Read more
Canada and the U.S. reported jobs numbers for April at the same time last Friday (8:30am Eastern). From the surface, it looks like traders thought MUCH more highly of the Canadian report. The U.S. dollar plunged against the Canadian dollar (FXC) and erased the entire week’s gain for USD/CAD. Source: FreeStockCharts.com Interestingly, traders took a … Read more
The French people will make a final decision on a President in less than 24 hours from the time of writing. Financial markets are in a much different place now than they were two weeks ago ahead of the initial round of voting. Thanks to the “French Fly” optimism is riding high and all assumptions … Read more