Understanding financial markets includes understanding some jargon. This glossary provides plain English definitions and descriptions of the most common key terms used on One-Twenty Two.
- 20DMA (20-Day Moving Average): A technical indicator that shows the average closing price of a stock over the past 20 days, often used to identify trends and support/resistance levels.
- 50DMA (50-Day Moving Average): Similar to the 20DMA, this indicator shows the average closing price over the past 50 days and is used to gauge medium-term trends and momentum.
- 200DMA (200-Day Moving Average): A technical indicator representing the average closing price of a stock over the past 200 days, often used to identify long-term trends.
- AI (Artificial Intelligence): Refers to the technologies and processes that simulate human intelligence through software and hardware, including learning, reasoning, and self-correction.
- All-Time High: The highest price level reached by a stock or index during its existence, often signaling strong market or stock performance.
- AT50 (Above the 50DMA): The percentage of stocks trading above their respective 50-day moving averages, used as an indicator of market breadth and to gauge short-term trading conditions.
- AT200 (Above the 200DMA): The percentage of stocks trading above their respective 200-day moving averages, indicating long-term market trends.
- Bear Market: A market condition where the prices of securities are falling, and widespread pessimism causes the negative sentiment to be self-sustaining.
- Bearish Signal: An indication based on technical analysis or market action that suggests stock prices are expected to fall.
- Big Cap Tech Stocks: Large capitalization companies in the technology sector, often leading market performance due to their size and influence.
- Bollinger Band (BB): A technical analysis tool defined by a set of lines plotted two standard deviations (positively and negatively) away from a simple moving average (SMA) of a stock’s price.
- Bond Yields: The return an investor realizes on a bond, which inversely correlates with bond prices; rising yields can signal increasing interest rates or inflation expectations.
- Breakdown: A technical term referring to a security’s price movement through an identified level of support, which is often followed by continued price declines.
- Breakout: A term used when a stock price moves outside a defined support or resistance level with increased volume. It can indicate a continuation or a reversal.
- Bull Market: A market condition characterized by rising stock prices, generally by 20% or more from recent lows, often driven by strong economic indicators and investor confidence.
- Bullish Signal: An indication, either through technical analysis or market conditions, that suggests stock prices are expected to rise.
- Confirmed breakdown/breakout: A closing that suggests the market will sustain a breakdown or breakout. The typical confirmation happens on the second lower close after a breakdown or the second higher close on a breakout.
- Cryptocurrency: Digital or virtual currencies that use cryptography for security, often decentralized and based on blockchain technology.
- DMA (Daily Moving Average): Refers to a moving average calculation that uses a specific number of the most recent closing prices of a security, updated daily.
- Fedspeak: Comments and speeches by Federal Reserve officials, which are closely monitored for clues about future monetary policy.
- Jobs Report: Regularly released government data summarizing employment trends, including job additions, which influence monetary policy and market expectations.
- Market Breadth: A technique used to gauge the direction of the overall market by analyzing the number of stocks above an important trend line; sometimes defined as the number of stocks advancing relative to those declining.
- Overbought Conditions: A technical condition that occurs when there is excessive buying of a stock or market, potentially indicating a price reversal or significant slowdown in upward movement.
- Oversold Conditions: A situation in technical analysis where the price of a stock or market is thought to have fallen too sharply and is due for a correction.
- Rate Cuts: Reductions in the interest rate at which banks can borrow from the Federal Reserve, typically used to stimulate economic growth.
- Resistance: A price level at which a stock or market repeatedly stops rising, due to the emergence of selling pressure that overcomes buying demand.
- Resilience: The ability of a stock or the market to withstand external pressures without significant price decline.
- Short-Term Trading Call: A market outlook based on short-term trading analysis, often influenced by recent price movements and technical indicators, reflecting a trader’s stance such as “bullish”, “bearish”, or “skeptical”.
- SMA (Simple Moving Average): A technical indicator calculated by averaging the closing prices of a security over a specified number of periods, smoothing out price data by constantly updating as new prices become available.
- Support: A price level at which a stock or market repeatedly stops falling, due to the emergence of buying pressure that overcomes selling demand.
- VIX (Volatility Index): Also known as the fear index, it measures the market’s expectation of 30-day volatility derived from the price inputs of options on the S&P 500 (SPY) index.
- Volatility: The degree of variation of a trading price series over time, usually measured by the standard deviation of logarithmic returns.