ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
When I last wrote about the Mexican peso three months ago, I described the NAFTA-driven context surrounding the breakdown of USD/MXN below its 50-day moving average (DMA). I was still holding onto a long-standing short on USD/MXN. I managed to keep holding this short until Wednesday evening (April 4, 2018). Source: TradingView.com I closed my … Read more
The ink just dried on my last Housing Market Review. In that piece I lamented the on-going lagging performance of home builders and stagnating housing housing data, and thus concluded that it was time to call an end to the seasonal trade on home builders. Just two days later, home builders surged upward in sympathy … Read more
AT40 = 38.7% of stocks are trading above their respective 40-day moving averages (DMAs) AT200 = 42.4% of stocks are trading above their respective 200DMAs VIX = 20.0 Short-term Trading Call: neutral Commentary The bears did their best to spook the market, but they failed to break it down. The foundations felt wobbly for most … Read more
This picture is exactly what I do not want to see as the stock market struggles to hold critical technical supports: a major index of economically-sensitive stocks confirming a breakdown of support at its 200-day moving average (DMA). The Materials Select Sector SPDR ETF (XLB) lost 1.3% on a day when the S&P 500 (SPY) … Read more
AT40 = 31.2% of stocks are trading above their respective 40-day moving averages (DMAs) AT200 = 39.4% of stocks are trading above their respective 200DMAs VIX = 22.5 Short-term Trading Call: neutral Commentary The market from another planet continues to wobble wildly on its axis. Today was the day for investors to make more withdrawals … Read more
AT40 = 25.6% of stocks are trading above their respective 40-day moving averages (DMAs) AT200 = 37.5% of stocks are trading above their respective 200DMAs (2-year closing low) VIX = 24.9 Short-term Trading Call: neutral Commentary On Friday, President Trump characterized the pre-Trump stock market as something “from another planet.” Surely he meant the last … Read more
I heard commentary after the Fed’s proclamation on monetary policy on March 21st that the Fed is “one vote away” from 4 rate hikes this year. Yet, something strange happened along the way to over-speculation on the number of rate hikes in 2018: the traders putting their money on the line on the 30-Day Fed … Read more
AT40 = 42.9% of stocks are trading above their respective 40-day moving averages (DMAs) (traded as low as 37.6%) AT200 = 47.9% of stocks are trading above their respective 200DMAs VIX = 19.0 (traded as high as 21.9) Short-term Trading Call: neutral Commentary In my last Above the 40 post, I described how the stock … Read more
I had high hopes for Meritage Homes (MTH) before and after the company reported earnings last month. Home builders were leading the market into a big sell-off, and I expected MTH to set the record straight on the health of the housing market. The headline earnings were solid but not quite inspiring enough. The stock … Read more
AT40 = 49.0% of stocks are trading above their respective 40-day moving averages (DMAs) AT200 = 50.1% of stocks are trading above their respective 200DMAs VIX = 15.8 Short-term Trading Call: bullish Commentary Another proclamation on monetary policy from the Federal Reserve is just 3 trading days away. Hanging in the balance is the S&P … Read more