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 upward drift in the stock market continued another week. The latest narrative comes from the cascading impact of the infrastructure bill settled in the Senate (I feel like the U.S. has passed this bill 10 times already!). While more wrangling lies ahead in the House of Representatives, the stock market felt … Read more
A False Breakout I started the week with Micron Technology, Inc (MU) as my favorite trade prospect. The breakout from last week was near poetry. MU enjoyed buying support most of the week as it first pushed through resistance at its 200-day moving average (DMA) (the blue line in the chart below) and next sliced … Read more
Stock Market Commentary Whether market breadth wanes or rallies, the stock market just maintains an upward drift through the path of least resistance. Last week, short-term market breadth partially improved thanks to a strong July jobs report. The lingering weakness from the previous week receded just enough to given the stock market a more bullish … Read more
Stock Market Commentary Welcome to the new world of “The Market Breadth.” I used the switch from AT40 (T2108) to AT50 (MMFI) as my market breadth indicator to improve the name of this blog series. The Market Breadth marks a change from a technical name that sounds like a Space X rocket to an English … Read more
Stock Market Commentary The oversold bounce last week exceeded my expectations. I did not expect the week to end with the S&P 500 and the NASDAQ hitting fresh all-time highs. Both indices seemed to offer limited upside for trading oversold conditions.The oversold bounce also disappointed me. I looked to beaten up stocks as the source … Read more
Stock Market Commentary The stock market melt-up took a one day break. The signs of trouble were ever more clear ahead of the break. Something was wrong with the picture in the stock market. Yet, sellers could barely follow through. The S&P 500 stumbled with a gap down, but buyers stepped right back in at … Read more
Stock Market Commentary A stock market melt-up is in full effect. Investopedia defines a melt-up as “…a sustained and often unexpected improvement in the investment performance of an asset or asset class, driven partly by a stampede of investors who don’t want to miss out on its rise, rather than by fundamental improvements in the economy.” … Read more
Housing Market Intro and Summary The housing data for April and now May confirm that the housing market had a kind of false start to the Spring selling season. Normalization continues to pressure short-term trends. Housing starts, new home sales, existing home sales, and home builder sentiment are in key downtrends. These measures are now … Read more
The Downgrade Zelman & Associates gut-punched home builder stocks with a major downgrade of the sector on June 10th. Zelman used a survey of builders to conclude that soaring housing prices are reducing demand. The survey also revealed “a fourth straight month of weaker-than-seasonal order activity in May”. (I have covered this dynamic as “normalization” … Read more
The Follow-Through: Churning While the S&P 500 (SPY) cruised higher all week, much of the rest of the market resigned to churning. The dichotomy of a market rebound versus the wounds left to heal continued to play out. Many of the follow-through trades for this week churned with the rest of the stock market. See … Read more