ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
Once again, long-term support has successfully held for the dollar. The options market revealed that players were moving in anticipation of this bounce, but some observers were caught trying to use fundamentals to explain the action. Since the payroll number was the biggest news on Friday, it seemed players were bullish on the dollar because … Read more
On Friday, CNBC reported that on that day options players placed large bets bullish on the dollar: “The options market is gearing up for a bull run in the dollar after February’s non-farm payrolls showed improvement in the U.S. jobs picture. Options traders saw sizeable downside put buying in the EUR/USD…Before Friday’s payrolls data, the … Read more
Buyers are again lifting the stock market from its intra-day lows and providing some potential clues on where to draw the bull/bear lines from a technical perspective. The case for a bullish setup is relatively strong: Three days of high volume selling is washing out sellers. 50-day moving average (DMA) essentially successfully retested, leaving primary … Read more
For one day at least, sellers converged with stock market technicals to deliver a large one-day drop in the S&P 500. As it turned out, the three-month highs in T2108, the percentage of stocks trading above their 40-day moving averages (DMAs), did matter after all. T2108 plunged along with the stock market for its worst … Read more
Over the past two days, I have crowed about silver, pondered whether gold will catch up, and marveled at the doubling in the S&P 500 from the March, 2009 lows. Yet, I failed to put the stories together into one chart for proper context: the S&P 500 priced in gold. Of course, almost every gold … Read more
The dollar approached critical support last week and neatly bounced just as I had hoped and expected. However, as I examine the technical prospects for an extended rally, I cannot shake a resurgent sense of bearishness about the dollar. The daily chart shows some pretty tough overhead resistance awaits any further rally in the dollar: … Read more
After scanning through the latest quarterly release of the “Statement of Monetary Policy” from the Reserve Bank of Australia, I was reminded that currency traders are trying to prepare for eventual rate hikes from the European Central Bank (ECB) and the Bank of England (BoE): “While financial markets continue to expect the US federal funds … Read more
I did not think the dollar would test the critical multi-year support line this soon. I thought the prospects for an economic recovery that is looking stronger than in competing developed economies would be sufficient to give the dollar a helping hand up despite the Federal Reserve’s best attempts to keep grinding the currency into … Read more
The “cooling off” of silver and gold has unfolded very slowly over several months. On Thursday, this process entered yet another phase. This time, silver made a clean and strong break below its 50-day moving average (DMA). Silver even made its first lower low since the latest rally began in late summer. Gold has spent … Read more
A month ago, I laid out the case for the S&P 500 sustaining its upward momentum. I pointed to 1300-1310 as the next point of strong resistance. As the S&P 500 nears that point (half of a percent away now), I marvel at how quickly this test has come. T2108, the percentage of stocks trading … Read more