ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
By now, I think we should recognize that low-volume rallies simply do not last – the odds tend to favor a return of most, if not all, those kinds of gains, sooner than later. Last week, I was particularly puzzled by a low-volume 2.4% rally on the S&P 500 that came on the heels of … Read more
Two weeks ago, I wrote “Sellers Step Out of the Way” to describe an impressive rally from oversold conditions on poor volume on May 27th. The S&P 500 closed up 3.3% that day, just short of the 200-day moving average (DMA). Today, the index finally hurdled over the 200DMA resistance for the first time in … Read more
I last wrote about the Australian dollar during its worst slide since the financial crisis. At the time, I claimed that the slide was probably good for a short-term bounce, but the currency could easily go even lower given macroeconomic concerns. Since then, the Australian dollar has firmed up nicely and formed a potential “W-bottom” … Read more
First Solar (FSLR) has been stuck in a downtrend for two years (see chart below). The stock has traveled a volatile path through this trend, providing strong trading opportunities up or down. For example, a sharp two-month rally from the March, 2009 lows doubled the stock price. Insider buying earlier this year provided a convincing … Read more
At the heights of the stock market’s low-volume spring rally, Ambac Financial (ABK) soared 72% and the 105% on two consecutive days. ABK was up another 50% the next day before closing with a 28% loss. The upward surge was quite startling given ABK was pretty clear in its earnings report at the time about … Read more