ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
The U.S. Dollar Index Breaks Down The U.S. dollar broke down last week. The weekly chart below shows the U.S. dollar index (DXY) closed last week at a near 2-year low. Numerous anti-dollar bets are gaining fast thanks to the U.S. dollar’s breakdown. The cryptocurrency Bitcoin (BTC/USD) is joining the party. Bitcoin joins the anti-dollar … Read more
Stock Market Statistics AT40 = 56.1% of stocks are trading above their respective 40-day moving averages (DMAs) AT200 = 32.5% of stocks are trading above their respective 200DMAs VIX = 25.7Short-term Trading Call: neutral Stock Market Commentary Last week started with a growl and ended quietly. The stock market quickly transitioned from confirming a bearish … Read more
The Housing Market Index (HMI) soared to 72 in July. The 14-point move completed a V-shaped recovery in the sentiment of home builders. Unlike the reaction to the surprisingly strong June HMI, the reaction to July’s surprise was definitely positive. The Message in Home Builder Sentiment The National Association of Home Builders (NAHB) explained the … Read more
Stock Market Statistics AT40 = 58.8% of stocks are trading above their respective 40-day moving averages (DMAs) AT200 = 30.8% of stocks are trading above their respective 200DMAs VIX = 27.8Short-term Trading Call: neutral Stock Market Commentary I anticipated a shallow sell-off for a downward resolution to the bearish divergence in the stock market. However, … Read more
Taylor Morrison Home Corporation (TMHC) Taylor Morrison Home Corporation (TMHC) is once again doing its best to prove wrong my skepticism over its acquisition of William Lyons Homes. On July 8th, the company recorded strong sales performance as the housing market continues its swift recovery from the temporary economic shutdown forced by the COVID-19 (coronavirus) … Read more
Stock Market Statistics AT40 = 43.8% of stocks are trading above their respective 40-day moving averages (DMAs) (hit a 2 1/2 – month low the previous day at 34.9%)AT200 = 26.0% of stocks are trading above their respective 200DMAs VIX = 27.3Short-term Trading Call: neutral Stock Market Commentary A strange and two-speed market got even … Read more
Stock Market Statistics AT40 = 53.9% of stocks are trading above their respective 40-day moving averages (DMAs) (2-month low)AT200 = 25.6% of stocks are trading above their respective 200DMAs VIX = 34.7Short-term Trading Call: neutral Stock Market Commentary The damage in the stock market the previous week looked strong enough to eventually take trading conditions … Read more
On June 25th, call options in sportings goods retailer Hibbett Sports (HIBB) sprang to life. At the time, around 1500 October $22.50 calls traded versus 0 open interest. On June 29th, open interest climbed above 2500. For context, HIBB options are sparsely traded. The second highest open interest sits with the Jan 15 ’21 calls … Read more
Stock Market Statistics AT40 = 40.1% of stocks are trading above their respective 40-day moving averages (DMAs) (2-month low)AT200 = 20.1% of stocks are trading above their respective 200DMAs VIX = 34.7Short-term Trading Call: neutral Stock Market Commentary After a one-day respite, the damage in the stock market continued. This time, the damage was more … Read more
The financial markets have presented numerous extremes during the coronavirus pandemic. I rely on the percentage of stocks trading above their respective 40-day moving averages (DMAs), aka AT40 (T2108), as a measure of oversold (below 20%) and overbought (above 70%) extremes in the stock market. In just three months, the stock market went from printing … Read more