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 The S&P 500 (SPY) is up 3.0% since summer trading began the day after the Memorial Day weekend. If not for the poor market breadth, the rally would look like a repeat of last year’s summer of loving stocks (sorry sell in May and go away folks). Semiconductor stocks, particularly NVIDIA Corporation … Read more
Stock Market Commentary For traders like myself who follow market cycles from extreme fear to extreme euphoria, last week’s trading action was astonishing. The stock market was already well overbought and stretched going into Wednesday’s Federal Reserve meeting. Yet, buyers STILL managed to go into extreme stretch mode. The Federal Reserve essentially declared the death … Read more
The bear market intrusion to the oversold period gave way to an explosion of bullish trading action this week. The maximum drawdown of October for the S&P 500 (SPY) was 4.0% well above the average for the month. This extreme move provided the perfect setup for the sharpness of the current oversold bounce. The rubber … Read more
Stock Market Commentary A bear market intrusion upset the dynamics of this oversold period. The NASDAQ is back in bear market territory. Both the NASDAQ and the S&P 500 broke down below their respective 200-day moving averages (DMAs) (the blue line in the charts below) and entered “correction” territory which is 10% below the 52-week … Read more
Stock Market Commentary At the end of September, I asked skeptically whether an oversold bounce could prevent an October swoon. As I suspected at the time, the answer turned out to be no. The market-moving headlines for October have included weighty, tragic, and alarming news making for a demotivating trading environment. An oversold bounce earlier … Read more
Stock Market Commentary It was an unfavorable day in the stock market, as I anticipated in “Small Cap Stocks Uncork Oversold Conditions.” The following post is a summarized transcript of a “show and tell” video I posted to talk through the accumulating extremes in this oversold market. I used ChatGPT to help with the clean-up. … Read more
Stock Market Commentary Oversold trading conditions await no more. The stock market went over hard and dropped into oversold territory with a sinking feeling. Important support levels broke down, interest rates continued to surge, the U.S. dollar continued to race higher, and, returning to a theatre near you for yet another dreadful showing is Groundhog … Read more
Stock Market Commentary A week ago, buyers did their best to push against topping stock indices by restarting overbought conditions. That overbought period lasted just 3 days as a Fitch downgrade of U.S. Treasury debt freshly cooled the summer of loving stocks. The resulting selling confirmed topping conditions and greased the skids of the stock … Read more
(An audio version of this blog post is available on SoundCloud) A no regrets decision is a high quality decision. When backed by a systematic framework, preferably something like the decision chain which I use in my consulting practice, a decisionmaker has reasonably and practically exhausted all available options to improve the inputs to the … Read more
Stock Market Commentary The bulls win big. The summer of loving stocks continued with the bulls overcoming a major hurdle: the overbought threshold for market breadth. After two failed attempts in the last month, the third attempt became the charm. The charm received a strong endorsement from fresh breakouts by the S&P 500 and the … Read more