ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
Last year, 2017, featured an incredibly low number of days with big price moves for the S&P 500 (SPY). In particular, there were only eight (8), days when the S&P 500 gained at least 1% or lost 1% or more (for ease of explanation I will call this concept “days with at least 1% changes”). … Read more
A recent Business Insider (BI) heading warned boldly: “Why Warren Buffett’s record-breaking cash stockpile should have investors very worried.” The BI’s evidence comes in the form of a record stash of over $130B of idling cash combined with major indices, like the S&P 500 (SPY), at or near all-time highs. Putting the two observations together, … Read more
AT40 = 27.3% of stocks are trading above their respective 40-day moving averages (DMAs) AT200 = 36.2% of stocks are trading above their respective 200DMAs (new 2-year closing and intraday lows) VIX = 23.6 Short-term Trading Call: neutral Commentary In my last Above the 40, I tried to highlight the positives even as the negatives … Read more
The volatility index, the VIX, closed below 11 on April 24, 2017. That launched 184 trading days of extremely low volatility (ELV). The VIX is now just 1 more trading day away from finally bringing this historic event to an end. By my definition, it takes 20 trading days of the VIX closing above 11 … Read more
AT40 = 38.3% of stocks are trading above their respective 40-day moving averages (DMAs) AT200 = 54.7% of stocks are trading above their respective 200DMAs VIX = 17.3 (28.5% increase!) Short-term Trading Call: bullish Commentary “We cannot tolerate pervasive and persistent misconduct at any bank and the consumers harmed by Wells Fargo expect that robust … Read more
Trying to chase volatility higher has been like chasing fancy footwork. The S&P 500 (SPY) last completed a drawdown of 5% or more on November 4, 2016. That ended a period of pre-election weakness that began in early to mid-August, 2016. The last drawdown of 5% or more before that occurred around Brexit when the … Read more
AT40 = 64.0% of stocks are trading above their respective 40-day moving averages (DMAs) AT200 = 60.4% of stocks are trading above their respective 200DMAs VIX = 9.4 (volatility index) (2nd lowest VIX since at least 1990!) Short-term Trading Call: cautiously bullish Commentary The S&P 500 (SPY) is soaring high since its impressive breakout two … Read more
Nice Save Bears have taken numerous shots yet the bulls have consistently blocked them all. The S&P 500 (SPY) is barely off its all-time highs and has survived all number of setbacks. These setbacks seem to get more and more shallow. Monday, April 3rd, 2017 delivered another classic example. The morning began with very convincing … Read more
The volatility index, the VIX, has closed below 11 for 2 straight days, 3 of the last 6, and 6 of the last 13 days. Source: FreeStockCharts.com These low levels of the VIX seem dangerously low, and I have labelled them as such in my recent “Above the 40” posts. Yet, I have discovered the … Read more
(This is an excerpt from an article I originally published on Seeking Alpha on January 9, 2017. Click here to read the entire piece.) Two years ago, I wrote “The Problem with the January Barometer.” {snip}… the January barometer failed one more time with 2016 delivering a stellar 9.5% gain. Hopefully, 2016 helps put the … Read more