ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
This week, I blithely accumulated call options on Goldman Sachs (GS) ahead of and after the Federal Reserve’s latest declaration on monetary policy. I assumed that the Fed’s calming influence would remind market participants that the economy is fine and the prospects are good. Under that scenario financial stocks would do well as long-term interest … Read more
Just a week and a half ago I was pointing to a promising breakout for Teucrium Corn ETF (CORN). That move turned out to be the top of that rally. Source: FreeStockCharts.com I am still holding my core position in CORN, but I am now looking to buy this dip with a short-term trading position. … 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
AT40 = 48.7% of stocks are trading above their respective 40-day moving averages (DMAs) AT200 = 51.9% of stocks are trading above their respective 200DMAs VIX = 16.4 Short-term Trading Call: bullish Commentary It’s like deja vu again. The smoke just barely cleared from defusing Trump’s tripwire over trade wars, and now the market is … Read more
The seasonal trade on home builders for 2017/2018 showed its first sign of trouble when the iShares US Home Construction (ITB) fell sharply off its 10+ year high in January on the same day the S&P 500 (SPY) set a new (and its last) all-time high. Almost two weeks later, in early February, the under-performance … Read more
AT40 = 25.4% of stocks are trading above their respective 40-day moving averages (DMAs) AT200 = 43.9% of stocks are trading above their respective 200DMAs VIX = 19.9% Short-term Trading Call: neutral (caveats below!) Commentary As I feared was likely, the S&P 500 (SPY) wasted no time in breaking its 50-day moving average (DMA) support. … Read more
AT40 = 31.2% of stocks are trading above their respective 40-day moving averages (DMAs) AT200 = 48.0% of stocks are trading above their respective 200DMAs VIX = 18.6 (17.7% gain) Short-term Trading Call: bullish (caveats below!) Commentary During the thick of the sell-off earlier this month, I stated with tongue-in-cheek that Federal Reserve Chair Jerome … Read more
AT40 = 32.8% of stocks are trading above their respective 40-day moving averages (DMAs) AT200 = 49.5% of stocks are trading above their respective 200DMAs VIX = 19.5 Short-term Trading Call: cautiously bullish (downgrade from bullish – see below for more details) Commentary The trading contours in the aftermath of an oversold episode can move … Read more