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: The stock market is expressing its disappointment with the Federal Reserve’s plans to tighten monetary policy. The Fed will have the backdrop of a sharp market sell-off when it meets this week to further execute on those plans. Like a forlorn partner, stocks sent a wistful love note to the Fed asking … Read more
Stock Market Commentary Investor psychology took another hit. A spirited relief rally turned into a dispiriting fade and reversal that had tinges of bear market action. The bear-like fade stretched the stock market closer to oversold trading conditions. All three major indices covered here are now setting multi-month lows. They are also very extended to … Read more
Stock Market Commentary Investor psychology took an important hit this week. During the Goldman Sachs (GS) Q&A period for the Q4 2021 earnings conference call, Chairman and CEO David Solomon dropped an inflation bomb. Solomon claimed that “there is real wage inflation everywhere in the economy, everywhere” (from the Seeking Alpha transcript). Solomon responded to … Read more
“…certainly with valuations where they are, I’m sure we’re going to go through a doozy of a correction this year. At some point. I don’t know when. And I don’t know why. But I do know, it never hurts to take profits and to keep some powder dry so that you have the psychological wherewithal … 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 survived a choppy week. The churn almost looked like stabilization after a disappointing start to the new year. However, the attempt to absorb the news of a hawkish Fed is taking its toll in the form of toppiness. With each passing day I get more and more wary about … Read more
A correction in financial markets is conventionally defined as a decline of at least 10% from an all-time high. At its lows of the day, the NASDAQ (COMPQX) found itself down 9.3% from the all-time high set almost two months ago. The depths of this decline also marked an important breach: the NASDAQ traded below … Read more
Stock Market Commentary The stock market indices benefited from a strong 2021. year. However, under the surface, declining market breadth betrayed the bullish narrative for a wide swath of stocks. A disappointing start to the new year for the indices was even worse for those stocks already limping into the end of last year. The … Read more
Stock Market Commentary The strong end to 2021 mattered for just one day so far in 2022. Presumably fresh passive investments helped create a broad surge on the first day of the year. Wednesday’s release of the minutes from the Federal Reserve’s December meeting changed everything. Apparently, the Fed talk sounded a lot more hawkish … 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