ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
On January 28, QUALCOMM (QCOM) disappointed the market by guiding earnings and revenue expectations down for its fiscal second quarter (pro forma EPS of $0.49-0.53 vs. $0.57 consensus and $2.4-2.6B in revenue vs. $2.75B consensus). The stock closed down 14% on the day on over 6x the 3-month average volume. This surge of selling represented … Read more
Nowhere is a destination for the average solar stock these days. For example, TAN, the Claymore/MAC Global Solar Energy ETF, has been stuck in a trading range since May of last year. 16 months ago, TAN was selling at the current price of $8.33/share. This dramatic under-performance (for example, relative to the S&P 500) will … Read more
Financial stocks as a group topped in October. The recent surge in selling volume on XLF, the Financial Select Sector SPDR, has dragged prices to a critical support level. The chart below shows the XLF is teetering on the edge of a 6-month trading range. XLF is also testing its 200-day moving average (DMA) (this … Read more
Last week, I suggested that T2108 was at such low levels that the next spike in the VIX would represent a major buying opportunity. Sure enough, the VIX printed only its second higher high of the entire rally off the March lows and buyers rushed immediately into the market (put sellers probably also rushed in … Read more
Toyota’s stock first broke down in late November when it plunged below the 200-day moving average (DMA) for the first time since 2007. Unlike 2007, this technical break led to a sharp rally and not a sustained sell-off. (At the time, I suggested a counter-trend rally was likely, especially if the yen weakened; but I … Read more
The inverse correlation between the U.S. dollar and the stock market has snapped back into play with a vengeance since the 15-month closing highs for the S&P 500 set on January 19th. On that day, the dollar index rose for a second day, forming what was to become the bottom of a small pullback in … Read more
It appears even gold remains caught up in the carry trades that have supposedly kept commodities aloft for months. Gold plunged almost 4% along with a deep sell-off in the general market. As the market suddenly cared again about the prospects for sovereign defaults all over Europe, traders and investors dumped gold – and almost … Read more
After summarizing Fastenal’s dour commentary on non-residential construction, I pointed out that a retest of former resistance would make an attractive entry point on the stock. As planned, I initiated a (swing) trade on Fastenal (FAST) as it probed the 50DMA support over the past several days. Today, FAST bounced off the 50-day moving average … Read more
At the end of December, I suggested that the post-earnings trading in U.S. Steel (X) and Nucor (NUE) would be explosive based upon stealth rallies from the November lows that occurred despite a strong accumulation in puts and shorts on those stocks. On Tuesday, both steel companies delivered disappointing earnings that included cautions regarding continued … Read more
I last wrote about the Brazil Index Fund ETF (EWZ) at the end of the sharp correction in October. At that time, the big headline was that EWZ had lost all its gains from the Olympics-driven rally, and I was anticipating buying EWZ at the end of a total correction of 20% from the closing … Read more