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 The week opened with market breadth dropping to within five percentage points of the oversold threshold. This was the closest encounter with oversold since late October, 2023. The stock market never looked back from there. A favorable mid-week inflation report helped propel the stock market with the assistance of declining long-term bond … Read more
Stock Market Commentary Writing about financial markets always feels surreal when tragedy and disaster dominate the news headlines. My cognitive dissonance gets particularly poignant when the stock market does not reflect the scale and scope of events. As massive fires rage in Los Angeles causing to-date $135B to $150B in economic losses and loss of … Read more
Stock Market Commentary If you followed December’s deterioration in market breadth and/or paid attention to the inflation numbers and the smoke signals from the Federal Reserve, today’s market sell-off does not surprise you. What surprises me at the time of writing is the complete collapse in market breadth. The stock market essentially plunged from euphoria … Read more
Stock Market Commentary The stock market has a natural law of “physics.” Overly enthusiastic trading, whether up or down, eventually meets an opposite and sometimes equal force. This natural instability of extremes forms a basis of my market breadth trading rules. The enthusiastic post-election surge exhausted buyers enough to create a post-election reversal. Moreover, my … Read more
Stock Market Commentary The Federal Reserve took the stage right after the U.S. presidential election. The Federal Reserve and Fed Chair Jerome Powell delivered as expected. The unrelenting bulls had no reason to stop the momentum from the post-election rally. Powell stuck to the Fed’s script and unrelenting bulls kept charging. The uneventful meeting had … Read more