ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
Day-to-day, Mr. Market’s mood seems to swing dramatically up and down with little consistent rhyme or reason. The neat rationalizations of the bulls one day give way to the equally neat rationalizations of the bears the next day. For example, the market is very undervalued because of record low Treasury bill rates, highly stimulative monetary … Read more
Trade the Oversold Bounce – Stocks, Futures and Options Traders (Dr.Duru) Profits from oversold periods start either from entering the market long on the first oversold day (aggressive) and/or from waiting for VIX to increase at least 20 percent from the first oversold day or entering the market the first day after the oversold period … Read more
The British pound continues its steady ascent from 14-month lows versus the U.S. dollar. This feat is not as remarkable as it could have been given the dollar’s steady descent against all major currencies since June. However, both fundamental and technical developments continue to favor even higher levels. Three weeks after dropping my bearish bias … Read more
Excitement over earnings almost trumped technicals today. The S&P 500 tipped over and then faded back ever so slightly from its 50-day moving average (DMA). Earnings news typically trumps technicals, but I was pretty convinced looming overhead resistance would hold firm no matter then news given the weak buying volume coming into today. Buying volume … Read more
Almost on schedule, the pendulum has swung back to “sell” on the S&P 500. The technical setup on the index shows extremely overbought conditions with buying volume falling just as the index reaches for overhead resistance (see chart below). Combine these conditions with the launch of earnings season, a new round of U.S. economic releases … Read more
It took a little patience, but the bounce from oversold conditions delivered in spectacular fashion on Wednesday with a 3.1% jump. The setup this time was a “bullish hammer” that formed ahead of the U.S. unemployment report last Friday. This is how I described the setup at the time: “The good news is that the … Read more
If the summer ends up trading in a range, it will have a wider berth than I had expected. This week the S&P 500 broke both closing and intra-day lows for 2010 and confirmed an unfolding downtrend. The index is down 8 of the last 9 days. The good news is that the S&P 500 … Read more
The first half of 2010 has ended and another earnings season is upon us. The second quarter should be a time of easy comparisons as the economy hit a trough leading into spring of last year. If there is any credence to the argument that the economy is on a sustainable path to recovery, we … Read more
The strength in the Swiss Franc has accelerated. Even as the euro has stabilized somewhat against the U.S. dollar the past two weeks, the franc continues to set new record highs against the euro. The monthly chart of the euro vs the franc (EUR/CHF) shows how rapidly the franc has gained steam just in the … Read more
As Research In Motion’s stock (RIMM) plunged the last repurchase program underwater, I speculated that RIMM would initiate another share repurchase program if the stock continued to go lower. It now seems that Research In Motion (RIMM) is indeed determined to prop up its stock with its hard-earned cash. During tonight’s earnings call, RIMM announced … Read more