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’s bearish divergence is too strong to ignore. The S&P 500 and the NASDAQ achieved all-time highs while market breadth sunk again this week. Both short-term and long-term market breadth indicators are at key support levels. Even if market breadth somehow rebounds from current levels, I find myself getting yet … Read more
Stock Market Commentary A plunge in market breadth on Wednesday made me expect a more bearish take on the markets for my next blog post. A sharp rebound led by strong earnings from various retail companies, quickly changed the narrative from a continued NVDA hangover to a bullish divergence and then a bullish setup. Friday’s … Read more
Stock Market Commentary I looked to last week’s earnings from NVIDIA Corporation (NVDA) with great anticipation. The indices gathered momentum with all-time highs and seemed to point to a big moment for NVDA. NVDA did indeed have a big moment, but it helped precious few. In fact, NVDA’s gain looked like a net loss. Buyer’s … Read more
Stock Market Commentary I saw a simple test for distinguishing bearish and bullish signals after META’s post-earnings swoon last month. A quick rebound following failed tests at resistance complicated the picture. The price technicals and dynamics returned to simple as a synchronized yet quiet breakout unfolded last week across the S&P 500 and the NASDAQ. … Read more
Stock Market Commentary In the prior week a post-earnings pricequake from Meta Platforms (META) dominated the stock market headlines. Last week, an Apple buyquake dominated the headlines and week-ending trading after the company announced a record $110B buyback. The subsequent gain in AAPL turned my simple test dividing bearish and bullish trading action into a … Read more
Stock Market Commentary Can a bullish divergence create a bottom for stocks? The stock market ended last week with an emphatic “YES!” A wild week got treacherous after Thursday’s META pricequake. Investors rushed for the exits after Meta Platforms (META) reported earnings. The sympathy selling went far and wide. Fortunately, earnings from Alphabet (GOOG) and … Read more
FactSet’s John Butters laid out a case for the “Magnificent Seven” companies losing the majority of their earnings growth dominance by the end of the year. In “Are the ‘Magnificent 7’ the Top Contributors to Earnings Growth for the S&P 500 for Q1?“, Butters showed how analyst expectations for year-over-year earnings growth for the top … Read more
Stock Market Commentary Last week was a week like few other for the volatility index, the VIX. In my last Market Breadth I made the case for the VIX mattering again. A VIX follow-through demonstrated even more strength and resilience. The resulting closing high for the year is a firmer bearish signal for the stock … Read more
Stock Market Commentary While I watch the tense trading unfold in NVDA, the VIX, the volatility index, has suddenly returned to my radar as an indicator of interest. Thursday’s stock market setback came with a surging VIX that closed at a new high of the year. The regular programming of the volatility faders actually failed … Read more
Stock Market Commentary A curious break in the trading action unfolded as financial markets wrestled with two “disappointing” inflation reports. Both the CPI (consumer price index) and wholesale inflation (the producer price index or PPI) came in slightly higher than “expected” (headline and core). The data just tell me expectations are unrealistic or at best … Read more