ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
The simple answer is yes! The data show that a worse than average August for the S&P 500 (SPY) increases the likelihood of a worse than average September. I use average to mean the average maximum drawdown as calculated and analyzed in “How to Trade During the Stock Market’s Most Dangerous Months“. In this case, … Read more
This year has been a surprisingly good year for speculating. The race to the end of 2023 looked like it priced in a lot of good news, but the good news (in price action) continues apace year-to-date. Thus, I decided to take a fresh look at last year’s claim: “Renaissance IPO ETF A Less Volatile … Read more
I have a good friend that comes up with interesting theories about relationships in the stock market. Recently, he claimed that “more often than not”, on a day where the big cap stocks gain and the iShares Russell 2000 ETF (IWM) does not gain, IWM will experience a daily gain on the next trading day. … Read more
Small caps were hit particularly hard in today’s follow-through to tech stocks pushing against technical limits. The iShares Russell 2000 ETF (IWM) went from a breakout above its 50-day moving average (DMA) despite a surge in interest rates and oil prices to a sharp 50DMA breakdown along with a further spike in interest rates and … Read more
(An audio version of this blog post is available on SoundCloud) A no regrets decision is a high quality decision. When backed by a systematic framework, preferably something like the decision chain which I use in my consulting practice, a decisionmaker has reasonably and practically exhausted all available options to improve the inputs to the … Read more
Stock Market Commentary The stock market delivered a gift on Friday as I scrambled to de-risk following the Bank of Japan’s drama on monetary policy. I braced for selling into bearish pressure and instead was pleasantly greeted by a broad push higher for stocks from the open. After the dust settled on the day, I … Read more
Uptrend in ITB: An Observation of 20-Day and 50-Day Moving Averages The calendar for the seasonal trade in home builders has come to an end. Yet, the iShares U.S. Home Construction ETF (ITB) looks as strong as ever. The uptrend in ITB is well-defined by a primary uptrend in the 20-day moving average (DMA) (the … Read more
That sigh of disappointment was Wall Street looking for signs of a weakening labor market in the June jobs report. Instead, that report showed job creation remains robust in the economy. Not only did the unemployment rate remain steady at a low 3.6% with the economy adding 372,000 jobs (far more than “consensus” expectations), the … Read more
When Cathie Wood anticipated a “doozie of a correction” in early 2021, she surely did not expect a complete collapse in the mania and bubble she had enjoyed during the first year of the pandemic. However, the cash machine betting on the downtrend in the ARK Funds may finally stop operations soon. Last week, one … Read more
Stock Market Commentary: Trading extremes led to a snapback rally as expected. However, the rally was short-lived as bear market action quickly resumed. The stock market looks like it is on the way to oversold trading conditions as March closing lows failed to hold as support. Fear is palpable as traders and investors scramble to … Read more