ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
The British pound’s bounce from May’s 14-month lows versus the U.S. dollar has surpassed all my expectations. The currency has stumbled at key resistance points as expected, but the trend upward has been persistent and undeniable. The pound has followed a steep channel straight up. The pound is now sitting right at its 200-day moving … Read more
Momentum continues to swing swiftly in favor of the bulls. The stock market is now pushing deep into overbought territory just three weeks after it was fashionable again to talk about a double dip recession. Last week, the S&P 500 broke a downtrend I assumed would hold for at least a few more weeks. It … Read more
With tongue reaching for the cheek last week, I declared the market both extremely undervalued and very overvalued, guessing that “as earnings season grinds on, I suspect the near-predictable pattern of post-earnings fades will finally wear thin, giving way to more bullish behavior.” I did not expect the turn to happen so clearly and dramatically … Read more
I spoke a day to soon on the bearish downtrend on XLI, the SPDRs Select Sector Industrial ETF. A healthy 3% one-day gain sent the ETF hurtling over resistance and into breakout territory. The next line of resistance is the June high or the “left shoulder” formed in late May/early June, depending on your perspective. … Read more
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