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 Whether market breadth wanes or rallies, the stock market just maintains an upward drift through the path of least resistance. Last week, short-term market breadth partially improved thanks to a strong July jobs report. The lingering weakness from the previous week receded just enough to given the stock market a more bullish … Read more
Stock Market Commentary Welcome to the new world of “The Market Breadth.” I used the switch from AT40 (T2108) to AT50 (MMFI) as my market breadth indicator to improve the name of this blog series. The Market Breadth marks a change from a technical name that sounds like a Space X rocket to an English … Read more
Stock Market Commentary A stock market melt-up is in full effect. Investopedia defines a melt-up as “…a sustained and often unexpected improvement in the investment performance of an asset or asset class, driven partly by a stampede of investors who don’t want to miss out on its rise, rather than by fundamental improvements in the economy.” … Read more
The Follow-Through Intro The stock market followed a rare stumble with a broad-based rebound from “oversold enough” conditions. Stocks were generally up across the board as buyers rushed in to grab “bargains.” AT40 (T2108), the percentage of stocks trading above their respective 40-day moving averages (DMAs), jumped from 37% to 46%. My favorite technical indicator … Read more
Stock Market Commentary The Federal Reserve seemed to change the rules of the game. To-date, easy money policies and stubborn dovishness in the face of rising inflation was a formula for higher asset prices, reflation and inflation-friendly trades, and even rising fears of an over-heating economy. Last week, Federal Reserve Chair Jay Powell shifted the … Read more
Stock Market Commentary Summer trading in the U.S. traditionally starts after the Memorial Day holiday weekend. The period typically features lower levels of liquidity and, accordingly, periods of listless trading interrupted by bursts of wild volatility. While the “sell in May and go away” adage is a poor trading strategy, August is the year’s most … Read more
Stock Market Commentary Last week featured an intense barrage of earnings reports. The collective response on the major indices was a major yawn. The S&P 500 finished flat for the week. The NASDAQ and the iShares Trust Russell 2000 Index ETF both softened by 0.4%. Financials were a notable exception as the Financial Select Sector … Read more
Stock Market Commentary The week began with two straight days of selling for the stock market. Almost everything was in place for a real pullback. Although the S&P 500 (SPY) was less than 2% off its all-time high, my favorite measure of breadth in the stock market, AT40 (T2108), the percentage of stocks trading above … Read more
Stock Market Commentary The split personality of the stock market resolved into major breakdowns in the stock market on Tuesday…for about 30 minutes. Apparently increasing inflation fears gave way to the soothing words of Federal Reserve Chairman Jerome Powell at the Fed’s semiannual monetary policy report to Congress. Buyers quickly met the latest sharp and … Read more
Stock Market Commentary After the stock market ended its last overbought period, I hesitated to drop my short-term trading call back to bearish. Three days later and the market has yet to snap back into overbought trading conditions. As the major indices levitate, my favorite breadth indicator, AT40 (T2108), the percentage of stocks trading above … Read more