ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
With tongue reaching for the cheek last week, I declared the market both extremely undervalued and very overvalued, guessing that “as earnings season grinds on, I suspect the near-predictable pattern of post-earnings fades will finally wear thin, giving way to more bullish behavior.” I did not expect the turn to happen so clearly and dramatically … Read more
IMAX sold off almost 10% the day after heavy bullish trading on the stock’s options. This setback proved temporary as IMAX immediately turned around and set fresh 10-year highs on Monday. The chart below shows the recent action: *Chart created using TeleChart: The payoff on the calls has been tremendous so far. The March 15 … Read more
Interpreting the trading volume in options is typically difficult (I did an analysis in three parts last year). But I am most fascinated when a herd of speculators get caught leaning in the very wrong direction. This is what happened with IMAX. Schaeffer’s Research reported on heavy, bullish activity in the trading of IMAX options … Read more
At this point, everyone should be used to looking at charts of stocks and indices that look like they are topping out, many in climactic fashion (click here for a review of Caterpillar; click here for a review of Intel). Add healthcare stocks to the growing list. Specifically, the Health Care Select Sector SPDR ETF, … Read more
Over the past three days, the S&P 500 finally broke upward out of a five-week trading range (the NASDAQ has had a much more aggressive breakout). Well before this latest bullish move, many stocks and whole sectors soared higher in a “stealth” rally. Steel companies U.S. Steel (X) and Nucor (NUE) are two stocks in … Read more