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: Sellers followed through with yesterday’s post-Fed selling. With losses across the board, market breadth dropped into oversold trading conditions. Yet, as I explained could be the case, the stock market looks uninteresting. Because the major indices are fresh off important breakdowns, substantial downside risk remains. Because the volatility index actually closed down … Read more
Stock Market Commentary: The stock market is delivering fertile ground for bear market green shoots. Market breadth in the form of AT50 (MMFI), the percentage of stocks trading above their respective 50-day moving averages (DMAs), closed at a one month high. Under the hood are individual stocks achieving convincing 50DMA breakouts and closing out primary … Read more
Stock Market Commentary: Fears of a recession are running high as the Federal Reserve scrambles to normalize monetary policy. The Fed is racing against an economic clock. It needs to get rates as close to the “neutral rate” as possible before a weakening economy finally forces them to reverse course. The higher the rates when … Read more
Stock Market Commentary Good employment news came in the form of the May jobs report. The unemployment rate stayed flat at 3.6% while the U.S. economy added 390,000 jobs. Both the number of unemployed and the unemployment rate are essentially back to the pre-pandemic levels of February, 2020. The labor force participation rate remains 1.1% … Read more
Stock Market Commentary: With the prospects of a bottom for this bear market, I am getting a little more interested in individual stock narratives. The bear market rubble is extensive. The gems are dispersed across a wide area. These stock charts provide one framework for sifting through the trash and the opportunity. {note: in this … Read more
Stock Market Commentary: The Federal Reserve released the minutes from its May policy meeting. While reporting on the minutes suggest the content contained nothing new, the stock market found rally material anyway. Perhaps it was a relief rally from the fallout in social media stocks. The broad-based buying pushed the stock market out of a … Read more
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