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: Inflation is everywhere in the global economy, and inflation will hang around for some time to come. The inflation problem is so bad that the Federal Reserve does not think inflation will return to its 2% target for another three years. While economists and pundits debate about how long inflation will last, … Read more
In a blunt and direct discussion, Bank of Canada (BoC) Governor Tiff Macklem made a compelling case for fighting inflation by declaring that “the economy has entered this period of excess demand with considerable momentum and high inflation, and we are committed to getting inflation back to target.” To do so, the BoC hiked its … Read more
Stock Market Commentary: I will not attempt to back my way into an explanation for today’s impressive rally in the stock market. Maybe the surge is another classic bear market relief rally. Maybe the relief fuel symbolizes a market finally ready to leave a bottom behind. Time will tell. What IS clear is that the … Read more
Stock Market Commentary: The fresh sag in the S&P 500 and the NASDAQ makes the stock market look like it is running low on fuel. The damage is timely just ahead of the next meeting of the Federal Reserve. In these circumstances, I would expect the Fed to deliver soothing words to the stock market … Read more
Stock Market Commentary: The stock market held up surprisingly well last week given the intensifying Russian assault on Ukraine and the accelerating economic sanctions pressing upon Russia. Yet, similar to my concerns for the suffering Ukrainian people, I have increasing doubts that this market “stasis” can last much longer. Specifically, the downtrending 20-day moving averages … Read more
Stock Market Commentary Last week was full of dramatic price swings. Traders reacted in extreme ways to key earnings results. The wild behavior cascaded out to related stocks. Some of the collateral damage in the blast radius likely came from portfolio managers scrambling to rebalance holdings. I expect this kind of action to continue through … Read more
Stock Market Commentary: The churn zones continued to hold sway over the market last week. Buyers effectively fought off a descent into a bear market by rallying the major indices up and out of the churn zone. Still, the narrative of churn stands thanks to a refresh of fear from Facebook’s post-earnings blow-up. Meta Platforms, … Read more
Stock Market Commentary: I started last week’s trading with a call for discipline over precision. That post turned out to be timely as the bears and bulls took the stock market on a wild ride through the Fed’s latest monetary policy decision (more on that in a future post). The indices plunged deeply on Monday … Read more
Stock Market Commentary Investor psychology took an important hit this week. During the Goldman Sachs (GS) Q&A period for the Q4 2021 earnings conference call, Chairman and CEO David Solomon dropped an inflation bomb. Solomon claimed that “there is real wage inflation everywhere in the economy, everywhere” (from the Seeking Alpha transcript). Solomon responded to … Read more
Stock Market Commentary My bullishness waned with last week’s manic trading action. I called the resulting patterns choppiness toppiness to reflect a biding sense that the market is churning out some kind of lasting top. Still, under the surface of the churn is a fresh divergence. The stock market is full of digital lows and … Read more