ONE-TWENTY TWO: Trading Financial Markets
Since the year 2000, delivering a different narrative for students and fans of financial markets: stocks, options, currencies, Bitcoin, and more…
Stock Market Commentary Technical underpinnings are changing fast in the stock market. The first strike against the rally came in the form of initial struggles to break into overbought territory. A second strike has now emerged in the form of an appreciating Japanese yen (FXY). To the extent carry trades – borrowing cheap yen to … Read more
Stock Market Commentary Market breadth tentatively tested the overbought threshold before buyers got a hit and made a dash into overbought conditions. The previous tentativeness created a first strike against the market rally. The dash into overbought conditions refreshed a broad bullishness in the stock market. Long-term interest rates were once again the center of … Read more
Stock Market Commentary Downtrends are over. Bullish breakouts abound. Sellers got one chance last week to try to keep the cork in the bottle of the oversold bounce, but they failed. The stock market insisted on pushing right through. With little time to rest, the S&P 500 and the NASDAQ ended the week with major … Read more
The bear market intrusion to the oversold period gave way to an explosion of bullish trading action this week. The maximum drawdown of October for the S&P 500 (SPY) was 4.0% well above the average for the month. This extreme move provided the perfect setup for the sharpness of the current oversold bounce. The rubber … Read more
Stock Market Commentary A bear market intrusion upset the dynamics of this oversold period. The NASDAQ is back in bear market territory. Both the NASDAQ and the S&P 500 broke down below their respective 200-day moving averages (DMAs) (the blue line in the charts below) and entered “correction” territory which is 10% below the 52-week … Read more
Stock Market Commentary “This may be the most dangerous time the world has seen in decades.” This statement from Jamie Dimon, CEO of JPMorgan Chase (JPM), concluded his commentary on the bank’s Q3 earnings report. These words on Friday morning fittingly concluded a sobering week that started with tragedy and war raging in Gaza and … Read more
After Canada experienced a hot inflation print for the month of August (the Consumer Price Index (CPI)), I aggressively declared the Canadian dollar a buy, long Invesco CurrencyShares Canadian Dollar Trust (FXC) and short USD/CAD. I ignored the technicals of support at an upward sloping 50-day moving average (DMA) (the red line below) on USD/CAD … Read more
Stock Market Commentary It was an unfavorable day in the stock market, as I anticipated in “Small Cap Stocks Uncork Oversold Conditions.” The following post is a summarized transcript of a “show and tell” video I posted to talk through the accumulating extremes in this oversold market. I used ChatGPT to help with the clean-up. … Read more
Stock Market Commentary The last quarter of the year and the third of the stock market’s most dangerous months started off with a swirl of signals. Each of the three major indices exhibited its own behavior. Small cap stocks plunged and uncorked oversold trading conditions. The S&P 500 clung to flatline. The NASDAQ happily shot … Read more
Stock Market Commentary Get used to the sentiment shifts. One day the stock market went oversold and over hard. The next day, an oversold bounce shows signs of life for stocks. In particular a classic bottoming signal came in the form of the “hammer” candlestick. Together, the bounce from oversold territory and the bottoming hammer … Read more