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 At the beginning of August, you might have looked uninformed predicting that the S&P 500 would end up printing its 4th straight monthly gain. At its lows, the index wiped out gains from the previous two months and almost reversed May as well. Now, the index hovers just below its all-time high … Read more
Stock Market Commentary This year’s Jackson Hole confab hosted by the Kansas City Federal Reserve delivered for financial markets. In his prepared speech, Fed Chair Jerome Powell issued an historic and classic sound bite for all of the history of monetary policy (emphasis mine): “The time has come for policy to adjust. The direction of … Read more
Stock Market Commentary The stock market’s V-shaped recovery finished reversing most of the losses from the August calamity. Small caps are once again the laggards. During this recovery the market swung from recessions fears to recession relief. The prospects for interest rate cuts no longer seemed to matter on either side of the V-shape. The … Read more
Stock Market Commentary Be ready so that you don’t have to get ready. A perfect storm of fears converged upon the market at today’s open. Recession fears, deleveraging from the end of the carry trade, and perhaps even fresh geopolitical fears from the Middle East, spun the market even further off the road. Retail brokerage … Read more
Stock Market Commentary Welcome to the start of the stock market’s three most dangerous months of the year. A weak jobs report for July helped to send market sentiment into a sharp reversal. The bad economic news suddenly turned the prospect of rate cuts into something to fear. These rate cut fears spun the market … Read more
Stock Market Commentary Last week ended with an historic tech outage that took down operations around the globe. This event was a poetic punctuation to a week that featured a sharp and toppy end to overbought conditions. The stock market’s tech outage features blow-off tops, double-tops, and some key breakdowns in individual stocks. Still, while … Read more
Stock Market Commentary The latest overbought period lasted two days, a typical duration. However, the start of the period was atypical given the fuel from historic heroics from small cap stocks. The end of the overbought period was remarkable by delivering some of the clearest topping signals of the year. Key indices that soared into … Read more
Stock Market Commentary The second quarter of the year ended with notable divergence. The third quarter picked up where the second quarter left off. Q3 took the Q2 baton of notable divergence, sending big cap stocks ever higher while leaving most of the market further behind. The jobs report seemed to be strong enough and … Read more
Stock Market Commentary The S&P 500 (SPY) is up 3.0% since summer trading began the day after the Memorial Day weekend. If not for the poor market breadth, the rally would look like a repeat of last year’s summer of loving stocks (sorry sell in May and go away folks). Semiconductor stocks, particularly NVIDIA Corporation … Read more
Stock Market Commentary The stock market’s bearish divergence is too strong to ignore. The S&P 500 and the NASDAQ achieved all-time highs while market breadth sunk again this week. Both short-term and long-term market breadth indicators are at key support levels. Even if market breadth somehow rebounds from current levels, I find myself getting yet … Read more