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: For those desperately looking for the “Fed pivot”, today’s Federal Reserve statement on monetary policy disappointed with a validation of the breakdown leading into the Fed meeting. Fed Chair Jerome Powell was almost unrelenting from start to finish with his efforts to stay on message: inflation remains too high, and the Fed … Read more
Stock Market Commentary: Inflation is everywhere in the global economy, and inflation will hang around for some time to come. The inflation problem is so bad that the Federal Reserve does not think inflation will return to its 2% target for another three years. While economists and pundits debate about how long inflation will last, … Read more
Stock Market Commentary: I stuck to my cautiously bullish short-term trading call in my last “Market Breadth” post. Signature stocks Apple and NVIDIA lead a relentless comeback that symbolizes a market that finally had nowhere to go but up. Buyers ignored a hawkish Federal Reserve and the escalation of violence from Russia’s invasion of the … Read more
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 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 For one day, the stock market suddenly cared about rising inflation numbers. The recovery mode is already underway. After slamming into the wall of inflation, the stock market is now climbing the wall of inflation. On Friday, in its survey of consumers, the University Michigan had the following to say about 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
Stock Market Commentary I flipped bearish on the stock market over a week ago because of a significant breakdown in the S&P 500 (SPY). Moreover, the breakdown occurred alongside vulnerable breadth indices and a bottoming volatility index (VIX). As a result, when the index closed lower than the previous week’s low, I braced for follow-through. … 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: Churning While the S&P 500 (SPY) cruised higher all week, much of the rest of the market resigned to churning. The dichotomy of a market rebound versus the wounds left to heal continued to play out. Many of the follow-through trades for this week churned with the rest of the stock market. See … Read more