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: Yesterday’s surge in the Japanese yen (FXY) may have exhausted enough sellers to clear the path for some holiday cheer in the stock market. Suddenly, the market seemed to transition from the heavy burdens of a stubbornly hawkish Fed to the alluring hopes from a lack of (scheduled) negative catalysts for the … Read more
Stock Market Commentary: Social unrest from fresh COVID lockdowns in China are already a distant memory for the U.S. stock market. Just as quickly as the stock market bearishly failed once again to hold overbought trading conditions, market breadth flipped the script to surge and rush back to overbought. Buyers and bulls celebrated a speech … Read more
Stock Market Commentary: I continue to underestimate just how much these bear market rallies price in misplaced optimism over monetary policy from the Fed. Although Chair Jerome Powell remained overall consistent with the Fed’s hawkish, inflation-fighting message, the stock market plunged after an initial post-release surge. Accordingly, the latest bear market breakthrough came to an … Read more
Stock Market Commentary: The stock market has swung so much between hope and despair that it looks like a dog chasing its tail down a hill. Accordingly, “The Market Breadth” has careened from soaring headlines to danger signs. A steep downtrend has remained in place since the last peak in August. Since that time 200-day … Read more
Stock Market Commentary: A month ago, a CPI Shocker brought a bear market rally to an abrupt end and created an historically bad September. Today’s CPI Shocker, another inflation reading that came in hotter than expected (imagine that), generated a completely different, and bullish, response. The stock market gapped down at the open and buyers … Read more
Stock Market Commentary: Riddle me this. How many months does it take for a “lagging indicator” to reflect reality? The labor market has defied expectations almost all year, and during most of that time it seems like too many pundits have dismissed the data as a lagging indicator of some long lost economic reality. The … Read more
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: The recession that Wall Street wants remains elusive according to the August jobs report. The data show the labor participation rate increased with job growth and a minimal increase in the unemployment rate: a recipe for the (mythical?) economic soft landing. The reaction in the stock market reflected the duality in interpreting … Read more
Stock Market Commentary: Now I see why there was so little fanfare about the end of the bear market. Last week’s trading looks like a warm-up for a bear market comeback. The S&P 500 and the iShares Russell 2000 ETF (IWM) printed bearish confirmations of resistance at their respective 200-day moving averages (DMAs) (the blue … Read more
Stock Market Commentary: The stock market is delivering fertile ground for bear market green shoots. Market breadth in the form of AT50 (MMFI), the percentage of stocks trading above their respective 50-day moving averages (DMAs), closed at a one month high. Under the hood are individual stocks achieving convincing 50DMA breakouts and closing out primary … Read more