ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
The first half of 2010 has ended and another earnings season is upon us. The second quarter should be a time of easy comparisons as the economy hit a trough leading into spring of last year. If there is any credence to the argument that the economy is on a sustainable path to recovery, we … Read more
For 14 months the S&P 500 has trended upward from the March lows. However, with the S&P 500 now down 3.9% for the year, the last 8 of these 14 months have produced no net gain in the index. Another 3% drop will produce the first lower low on the index since July, 2009. The … Read more
The percentage of stocks trading above their respective 40-day moving averages, T2108, closed at 19%, below the 20% threshold that indicates an oversold stock market. The stock market has reached these levels only one other time since the March, 2009 lows – this was in February when the market last cared about the sovereign debt … Read more
Last week, I claimed that the deeply oversold conditions presented a short-term buying opportunity, but that the downward trend in the percentage of stocks trading above their respective 40-day moving averages (DMAs) and 200DMAs (T2108 and T2107) pointed to a steadily weakening market in the near future. I expected sellers to step up at the … Read more
“…I stick by the rule that low-volume buying begets high-volume selling; weeks of gains can be erased within a manner of days once sellers finally get motivated.” This quote came from my commentary in late March titled “Some Lazy Thoughts for a Complacent Market“. At the time, I was reacting to the extreme overbought technical … Read more
The news has rippled across the globe that the U.S. Securities Exchange Commission (SEC) finally got around to charging Goldman Sachs with fraud: “The SEC alleges that Goldman Sachs structured and marketed a synthetic collateralized debt obligation (CDO) that hinged on the performance of subprime residential mortgage-backed securities (RMBS). Goldman Sachs failed to disclose to … Read more
The S&P 500 is now over 4% off the lows from oversold conditions. 40% of this entire move came on today’s surge as the dollar plunged over 1% versus the euro. The thrills occurred DESPITE poor news flow from the Greek sovereign debt drama: for example, imminent strikes to protest austerity measures and German hesitancy … Read more
LDK Solar (LDK) dropped 15% today as the company announced it will issue 18.9 American Depository Receipts as part of a larger bid to remain a going concern. LDK filed a 6K with the SEC summarizing its problems with cash flow, and its plan to arrest its descent into bankruptcy. The introduction states: “We are … Read more
In a year where Chinese solar companies have generally out-performed American solar companies, LDK stands out as a laggard. LDK is down 31% for the year whereas every other major Chinese solar stock traded on the American exchanges is no worse than flat on the year. When Q-Cells announced it would terminate a supply contract … Read more
On November 5, Research In Motion (RIMM) announced a buyback of up to $1.2B in shares starting November 9 and lasting for up to a year. When I read this announcement, I pounced on the stock the minute pre-market trading opened. This was quite a mental exercise for me because I had just closed out … Read more