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 My bullishness waned with last week’s manic trading action. I called the resulting patterns choppiness toppiness to reflect a biding sense that the market is churning out some kind of lasting top. Still, under the surface of the churn is a fresh divergence. The stock market is full of digital lows and … Read more
Stock Market Commentary The stock market indices benefited from a strong 2021. year. However, under the surface, declining market breadth betrayed the bullish narrative for a wide swath of stocks. A disappointing start to the new year for the indices was even worse for those stocks already limping into the end of last year. The … Read more
Stock Market Commentary The stock market indices enjoyed an impressive year. However, weak and declining market breadth produced numerous exceptions to the strong performance of indices and ETFs. A number of important and well-known individual stocks corrected, collapsed, and crashed in 2021. For some, the tailwinds of the pandemic ran out. For others, investors tired … Read more
Stock Market Commentary It was a close call. The technical deterioration of the previous week put the Santa rally in peril. At the start of trading last week, the Grinch roasted Santa enough to ignite oversold trading conditions. Santa’s revenge came in the form of a sharp rebound out of the 1-day oversold period. Subsequently, … 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
Stock Market Commentary A new COVID-19 variant created a new normal for financial markets. The following stock charts provide snapshots of how the market reacted to this new reality. Pandemic-sensitive stocks reacted sharply with a holiday-shortened trading session creating extra urgency for traders. Some of these quick trigger moves should reverse at least a bit … Read more
Stock Market Commentary The first trading week of November was action-packed. At the start of the week I looked ahead to monetary policy from the Federal Reserve and the October jobs report as key catalysts. While those events were indeed important, the stock market was treated to an overlay of at least two other important … Read more
Stock Market Commentary The market took just one more day to resume the momentum of expanding market breadth. An extreme October set up this bullish start to November with fresh all-time highs for major indices. While small caps as a group just missed an all-time high, the surge in small caps drove a bullish expansion … Read more
Stock Market Commentary The S&P 500 (SPY) bounced back from September’s woes for a 6.9% gain for the month of October. While the gain is extreme, I am even more interested in a different October extreme. Somehow, the index managed to skate through October without a notable drawdown. The maximum drawdown in October for the … Read more
Stock Market Commentary A week ago I pointed out the key signs suggesting the bear cycle was likely already ending. Last week, the S&P 500 (SPY) confirmed the end of the bear cycle with fresh all-time highs. Yet, consistent with this year’s theme, market breadth was left behind in catch-up mode. The momentum on both … Read more