ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
The stock market has churned and gone nowhere for 10 trading days, a distinct break in the steady drip upward that saw traders, investors, and even trading-bots seizing upon nearly every dip as a buying opportunity. For six months a very basic equation has dominated: printing money = higher stock prices. For now, a conditional … Read more
On Friday, CNBC reported that on that day options players placed large bets bullish on the dollar: “The options market is gearing up for a bull run in the dollar after February’s non-farm payrolls showed improvement in the U.S. jobs picture. Options traders saw sizeable downside put buying in the EUR/USD…Before Friday’s payrolls data, the … Read more
After falling as much as 15% this year, Goldcorp (GG), my favorite way to trade gold, has shot up 20%. The move through February was almost a straight line and the stock moved particularly strongly last week. *Chart created using TeleChart: While I sold the last of my trading positions in GG last week, this … Read more
Higher oil prices are not helping solar stocks. Instead, earnings disappointments and hand-wringing in Italy over solar subsidies and policy have put downward pressure on almost the entire sector. While it seems the second half of 2011 could be rough for solar stocks, the current sell-off seems to be creating some buying opportunities. First Solar … Read more
In “The Tech Trade,” Eric Savitz provides details on a downgrade of Amazon.com (AMZN) by UBS. The title seems quite alarming: “Amazon: Streaming Video Will Pressure Margins, UBS Warns.” After I realized UBS was taking its price target from $195 to $180, just above AMZN’s current price of $177, I wondered why this research note … Read more
The stock market printed a timely and picture-perfect bounce on Friday. Ahead of the rally, I presented the relatively strong case for the bulls based on the previous 3-day pullback. By closing above Wednesday’s high of 1318, the S&P 500 is also poised to continue its gains. However, looking beyond this bounce from support, the … Read more
The risk of holding TBT, the Pro Shares UltraShort 20+ Year Treasury, rose significantly last week. The sudden surge in oil prices in response to the rebellion in Libya has put the double-dip recession back into play and once again lodged it into the frontal lobes of market players. Recession fears bring fresh affinity for … Read more
Buyers are again lifting the stock market from its intra-day lows and providing some potential clues on where to draw the bull/bear lines from a technical perspective. The case for a bullish setup is relatively strong: Three days of high volume selling is washing out sellers. 50-day moving average (DMA) essentially successfully retested, leaving primary … Read more
When oil is on the move, place bets on oil. This was my advice when waving off the thesis that solar stocks are oil plays. Indeed, over the past two days that oil has surged, most solar stocks have sold off alongside the stock market. And while I sold my latest trading position in USO … Read more
For one day at least, sellers converged with stock market technicals to deliver a large one-day drop in the S&P 500. As it turned out, the three-month highs in T2108, the percentage of stocks trading above their 40-day moving averages (DMAs), did matter after all. T2108 plunged along with the stock market for its worst … Read more