ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
Stock Market Commentary: The stock market finished the week with confirmations of the bullish signals that were hard to believe. Accordingly, the follow-through buying served to uphold bullish belief despite the negative headwinds that scream with bearish overtones. Looking back, the current V-move upward looks swift. However, letting bullishness ride through this swing has taken … Read more
Stock Market Commentary: I did not back my way into an explanation for Wednesday’s post-Fed rally in the stock market, and I will not do so to explain the rest of the market’s impressively relentless comeback. In fact, the rally makes little sense given the prevailing narrative of fears over higher rates – not to … Read more
Stock Market Commentary: I will not attempt to back my way into an explanation for today’s impressive rally in the stock market. Maybe the surge is another classic bear market relief rally. Maybe the relief fuel symbolizes a market finally ready to leave a bottom behind. Time will tell. What IS clear is that the … Read more
Stock Market Commentary Russia’s invasion of Ukraine has created massive human misery and a historic press of global economic sanctions. With war comes scarcity and the allocation of resources to destroying the resources of others. Financial markets are scrambling to adjust to the new global wartime economy. These charts are just a snapshot of some … Read more
Stock Market Commentary: The stock market held up surprisingly well last week given the intensifying Russian assault on Ukraine and the accelerating economic sanctions pressing upon Russia. Yet, similar to my concerns for the suffering Ukrainian people, I have increasing doubts that this market “stasis” can last much longer. Specifically, the downtrending 20-day moving averages … Read more
Stock Market Commentary Trading with on-going headline risk is difficult for bulls and bears. I find it useful to pick a narrative, pick an anchor, and stay as disciplined as possible. My foundation remains with the principles of trading contrary to extremes. Last week, the market tested the extremes of oversold trading conditions and survived … Read more
Stock Market Commentary I earlier wrote about a promising divergence between anxiety and breadth in the stock market. However, I cannot help rubbernecking the market’s crashes and accidents. They tell dramatic stories about the folly in price action that can come with easy monetary policy and free money. The market goes through cycles of excitement … Read more
Stock Market Commentary: The market feels heavy and bearish. Yet, the major indices continue to bounce between the edges of their “churn zones.” Last week’s churn delivered a surprising ray of light tantalizing the dour sentiment. While the S&P 500 and the NASDAQ closed with a second straight week of losses, the major breadth indicators … Read more
Back in October and November, Bitcoin (BTC/USD) created renewed excitement when the cryptocurrency challenged its all-time high and then set three new all-time highs. Unfortunately, the breakout turned into a fakeout. Bitcoin peaked with the NASDAQ (QQQ) in November as financial markets moved away from aggressively priced risk assets. However, a more sustainable bottom may … Read more
Stock Market Commentary Last week was full of dramatic price swings. Traders reacted in extreme ways to key earnings results. The wild behavior cascaded out to related stocks. Some of the collateral damage in the blast radius likely came from portfolio managers scrambling to rebalance holdings. I expect this kind of action to continue through … Read more