ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
This blog takes a particular interest in studying and learning from stock market extremes. This year, 2020, is full of stock market extremes with the summer and the first day of post-summer trading delivering their own extremes. Summer vs Post-Summer Performances and Stock Market Extremes Measuring summer as the first trading day of June to … Read more
Sam Ro is a managing editor at Yahoo Finance. Ro’s tweet with data from FactSet and Goldman Sachs (GS) shows how just 5 stocks – Facebook (FB), Amazon.com (AMZN), Apple (AAPL), Microsoft (MSFT), and Alphabet (GOOG) – dominate the S&P 500 (SPY). The top 1 percent seem to be the only story worth telling given … Read more
Purists in the financial markets often decry the “voodoo” of technical analysis. The U.S. jobs report for May, 2020 is an extreme version of how the fundamentals can also fail to provide sufficient guidance for trading and investing in financial markets. Economists and other sooth-sayers in consensus expected the U.S. economy to lose 8.3 million … Read more
The Australian dollar (FXA) tends to be correlated with the S&P 500 (SPY). The Japanese yen (FXY) tends to be inversely correlated with the S&P 500 (SPY). The exceptions to these relationships are notable because the inevitable return to these relationships usually present unique trading opportunities. The drivers of these relationships are related to trader … Read more
Back in 2012 and 2013, I wrote pieces describing some interesting daily trading patterns in the S&P 500 (SPY). The effects looked big enough to matter. In particular, Mondays and Tuesdays showed outsized performance differences from other days in the week. The performance divergences were very large in the first 5 months of 2013 as … Read more