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 A new COVID-19 variant created a new normal for financial markets. The following stock charts provide snapshots of how the market reacted to this new reality. Pandemic-sensitive stocks reacted sharply with a holiday-shortened trading session creating extra urgency for traders. Some of these quick trigger moves should reverse at least a bit … Read more
Stock Market Commentary News of a new 30-spike protein COVID-19 variant sent financial markets into a tumble. The rapid news flow combined with a shortened, holiday trading day to deliver broad-based and intense selling pressure. As the market absorbs this latest blow, it should become clearer that COVID-19 is a new normal. That is, the … Read more
Stock Market Commentary Waning market breadth weighed on a broad swatch of stocks last week. I was compelled to let go of some of my worst losing stocks. I feature a few of them in this inaugural Stock Chart Reviews series. My pace of trades will likely slow for the rest of the year unless … Read more
Stock Market Commentary And just like that, the bullish expansion of market breadth hit a wall…a wall of inflation. The October Consumer Price Index (CPI) for all urban consumers apparently surprised financial markets by soaring 0.9% from September and 6.2% over October, 2020. The chart below shows that both surges are at the high end … Read more
Stock Market Commentary The first trading week of November was action-packed. At the start of the week I looked ahead to monetary policy from the Federal Reserve and the October jobs report as key catalysts. While those events were indeed important, the stock market was treated to an overlay of at least two other important … Read more
Stock Market Commentary The market took just one more day to resume the momentum of expanding market breadth. An extreme October set up this bullish start to November with fresh all-time highs for major indices. While small caps as a group just missed an all-time high, the surge in small caps drove a bullish expansion … Read more
Stock Market Commentary The S&P 500 (SPY) bounced back from September’s woes for a 6.9% gain for the month of October. While the gain is extreme, I am even more interested in a different October extreme. Somehow, the index managed to skate through October without a notable drawdown. The maximum drawdown in October for the … Read more
The stock market issued its verdict for Facebook (FB). The beleaguered company reported Q3 earnings, and sellers pressed their bets into a key technical breakdown. FB closed at a 5-month low and below support at its 200-day moving average (DMA) (the blue line below). This event is important because FB has spent so little time … Read more
Stock Market Commentary A week ago I pointed out the key signs suggesting the bear cycle was likely already ending. Last week, the S&P 500 (SPY) confirmed the end of the bear cycle with fresh all-time highs. Yet, consistent with this year’s theme, market breadth was left behind in catch-up mode. The momentum on both … Read more
Stock Market Commentary I turned bearish on the stock market over two weeks ago. Last week began with confirmation as sellers followed through on a fade from a brief rally. Mid-week, the downward momentum came to a screeching halt as buyers took over most of the trading action. I pointed out the key signs suggesting … Read more