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 Downtrends are over. Bullish breakouts abound. Sellers got one chance last week to try to keep the cork in the bottle of the oversold bounce, but they failed. The stock market insisted on pushing right through. With little time to rest, the S&P 500 and the NASDAQ ended the week with major … 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
NVIDIA Races Ahead Money manager Cathie Wood of ARK Invest is known for being unconventional by making concentrated bets on highly speculative companies, what Wood calls betting on innovation that solves problems. So of course Wood has AI-related bets in the various ARK funds. The ARK Autonomous Technology & Robotics ETF (ARKQ) in particular holds … Read more
Stock Market Commentary The market took just one more day to resume the momentum of expanding market breadth. An extreme October set up this bullish start to November with fresh all-time highs for major indices. While small caps as a group just missed an all-time high, the surge in small caps drove a bullish expansion … Read more
Stock Market Commentary The S&P 500 (SPY) bounced back from September’s woes for a 6.9% gain for the month of October. While the gain is extreme, I am even more interested in a different October extreme. Somehow, the index managed to skate through October without a notable drawdown. The maximum drawdown in October for the … Read more
Stock Market Commentary A week ago I pointed out the key signs suggesting the bear cycle was likely already ending. Last week, the S&P 500 (SPY) confirmed the end of the bear cycle with fresh all-time highs. Yet, consistent with this year’s theme, market breadth was left behind in catch-up mode. The momentum on both … Read more
Stock Market Commentary I flipped bearish on the stock market over a week ago because of a significant breakdown in the S&P 500 (SPY). Moreover, the breakdown occurred alongside vulnerable breadth indices and a bottoming volatility index (VIX). As a result, when the index closed lower than the previous week’s low, I braced for follow-through. … Read more
Stock Market Commentary The upward drift in the stock market continued another week. The latest narrative comes from the cascading impact of the infrastructure bill settled in the Senate (I feel like the U.S. has passed this bill 10 times already!). While more wrangling lies ahead in the House of Representatives, the stock market felt … Read more
Stock Market Commentary Welcome to the new world of “The Market Breadth.” I used the switch from AT40 (T2108) to AT50 (MMFI) as my market breadth indicator to improve the name of this blog series. The Market Breadth marks a change from a technical name that sounds like a Space X rocket to an English … 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