ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
Apple Dividing Rally from Churn The latest cycle of the Apple Trading Model (ATM) happened between a legal setback for Apple and a product launch event. The week began somewhat hopeful with a small gain. Sellers ended the prospects for the Apple trade by fading the product announcement with a 1.0% loss and a close … Read more
Stock Market Commentary The weight of deteriorating market breadth was undermining the stock market even as on-going rotations kept the indices floating higher. Last week, the tone made one of those periodic, yet still small, shifts. When news broke that Epic Games won a key provision of its lawsuit against Apple and its Apple Store, … Read more
Stock Market Commentary August was a breeze, and the stock market strolled in September. A few pebbles rolled into the path this week. The indices delivered divergent behavior which brings up familiar themes of rotation. Most notably, the rotations pressured market breadth as small caps in particular displayed fresh signs of weakness. The Stock Market … Read more
The Follow-Through: Bounce Stock market traders delivered a classic bounce from oversold trading conditions. The S&P 500 (SPY) confirmed a picture-perfect test of support at its 50-day moving average (DMA). The NASDAQ (COMPQX) pulled off a picture-perfect toe tap of its lower Bollinger Band (BB). The iShares Trust Russell 2000 Index ETF (IWM) confirmed a … Read more
Stock Market Commentary Unlike the months long process of declining market breadth, the resolution into an oversold trading period came swift, fast, and in a hurry. I thought my wait for an oversold trading period would last more days and weeks. Instead, a further plunge in market breadth combined with other important price signals to … Read more
Stock Market Commentary The stock market melt-up took a one day break. The signs of trouble were ever more clear ahead of the break. Something was wrong with the picture in the stock market. Yet, sellers could barely follow through. The S&P 500 stumbled with a gap down, but buyers stepped right back in at … Read more
Stock Market Commentary A meme rush pushed the stock market toward summer trading. A breakout for market breadth launched summer trading. Small cap stocks appeared to lead the way even as the S&P 500 and the NASDAQ wilted for the close of trading. The divergence still leaves the stock market poised for an eventual rendezvous … 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 yet another episode of momentary panic proceeded by a virtual “all clear” signal. In the middle of the week, the S&P 500 (SPY) broke down just as the stock market hit extremes. Subsequently, buyers stepped into the breach. As a result, the very next day, the stock market rebounded … Read more
Stock Market Commentary The S&P 500 (SPY) finally broke down and succumbed to the selling pressure building up in the stock market. A “surprise” surge in inflation as measured by the Consumer Price Index (CPI) delivered the headline catalyst for a day of broad-based selling. Given market breadth was already in the process of narrowing, … Read more