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 Financial markets are supposed to act like discounting mechanisms which use the wisdom of the crowd to anticipate important events. The stock market stalled and then broke down ahead of the election. Excluding a last minute rush to buy on election day, I assumed the stock market might have a muted reaction … Read more
Stock Market Commentary Fades were on display, especially on Thursday, as the stock market showed signs of exhaustion. Bad news in and for the semiconductor industry seemed to motivate sellers. For example, earnings for Microsoft (MSFT) and Meta Platforms (META) seemed to release some steam on hyped expectations for the AI chips both companies will … Read more
Stock Market Commentary The U.S. stock market hardly reflected last week’s action-packed news. China scrambled to address a weakening economy with a massive stimulus program with news rolling nearly all week. In Japan, voters elected a Prime Minister who favors a stronger currency in the Japanese yen (FXY). Capping the anti-climactic feeling in U.S. stocks, … Read more
Stock Market Commentary The stock market poetically swung from the depths of despair with a seasonal September drawdown to a sharp rebound in giddy anticipation of rate cuts from the Federal Reserve on Wednesday. The highly anticipated meeting has the potential to set the market’s tone for the remainder of the year. If Chair Jerome … Read more
Alphabet, Inc (GOOG) was my favorite stock in my generative AI trade. No more. After OpenAI announced SearchGPT, GOOG fell 3.0%. The decline followed a 5.0% post-earnings loss and confirmed a bearish breakdown below the 50-day moving average (DMA) (the red line in the chart below). While SearchGPT is still a prototype, even the idea … Read more
Stock Market Commentary Last week further emphasized the continuation of notable divergence from Q2 to Q3. This time, soft inflation data caused a surge in rate cut anticipation that in turn drove a significant rotation away from big cap growth and tech stocks and toward small caps and a whole host of other rate sensitive … 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 week’s trading was punctuated by a single day with an all-time high on the S&P 500 and the NASDAQ in the wake of strong readings on the May S&P Global US Services PMI and the May ISM Non-Manufacturing Index. Unfortunately, that price milestone failed to change the contour of market breath … Read more
Stock Market Commentary I saw a simple test for distinguishing bearish and bullish signals after META’s post-earnings swoon last month. A quick rebound following failed tests at resistance complicated the picture. The price technicals and dynamics returned to simple as a synchronized yet quiet breakout unfolded last week across the S&P 500 and the NASDAQ. … Read more