ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
The Follow-Through: Strong Start for Stocks The month of September enjoyed a strong start as last week’s fairy dust from J-Pow continued to work its magic. Short-term market breadth with AT50, the percentage of stocks trading above their 50-day moving averages (DMAs), also continuing higher while leaving behind the longer-term breadth indicator in AT200, the … Read more
Stock Market Commentary Pattern trading uses consistent bets on repeated behaviors in financial markets. Over the course of time, pattern trading delivers profits from the diligent application of rules based on standard, technical setups in stock charts. The persistent uptrends and trading ranges in this pandemic stock market have delivered a surprisingly long stretch of … Read more
Stock Market Commentary The S&P 500 (SPY) lost 0.7% for just its 4th down day of the 12 trading days of August. The index closed at an all-time high the previous day. The pullback looks like just one more tiny pinprick in the middle of a monster run-up during this pandemic. Yet the ongoing deterioration … Read more
Stock Market Commentary The upward drift in the stock market continued another week. The latest narrative comes from the cascading impact of the infrastructure bill settled in the Senate (I feel like the U.S. has passed this bill 10 times already!). While more wrangling lies ahead in the House of Representatives, the stock market felt … Read more
Stock Market Commentary Welcome to the new world of “The Market Breadth.” I used the switch from AT40 (T2108) to AT50 (MMFI) as my market breadth indicator to improve the name of this blog series. The Market Breadth marks a change from a technical name that sounds like a Space X rocket to an English … Read more
Stock Market Commentary The oversold bounce last week exceeded my expectations. I did not expect the week to end with the S&P 500 and the NASDAQ hitting fresh all-time highs. Both indices seemed to offer limited upside for trading oversold conditions.The oversold bounce also disappointed me. I looked to beaten up stocks as the source … Read more
The Follow-Through: Bounce Stock market traders delivered a classic bounce from oversold trading conditions. The S&P 500 (SPY) confirmed a picture-perfect test of support at its 50-day moving average (DMA). The NASDAQ (COMPQX) pulled off a picture-perfect toe tap of its lower Bollinger Band (BB). The iShares Trust Russell 2000 Index ETF (IWM) confirmed a … Read more
Stock Market Commentary Unlike the months long process of declining market breadth, the resolution into an oversold trading period came swift, fast, and in a hurry. I thought my wait for an oversold trading period would last more days and weeks. Instead, a further plunge in market breadth combined with other important price signals to … Read more
Stock Market Commentary The stock market melt-up took a one day break. The signs of trouble were ever more clear ahead of the break. Something was wrong with the picture in the stock market. Yet, sellers could barely follow through. The S&P 500 stumbled with a gap down, but buyers stepped right back in at … Read more
The Follow-Through Intro The stock market followed a rare stumble with a broad-based rebound from “oversold enough” conditions. Stocks were generally up across the board as buyers rushed in to grab “bargains.” AT40 (T2108), the percentage of stocks trading above their respective 40-day moving averages (DMAs), jumped from 37% to 46%. My favorite technical indicator … Read more