Follow-Through Trades: Another Bounce from “Oversold Enough”

The Follow-Through Intro Stocks and Indices Covered S&P 500 (SPY) Nasdaq (COMPQX) iShares Trust Russell 2000 Index ETF (IWM) volatility index (VIX) AGNC Investment Corp (AGNC) Allegheny Technologies Incorporated (ATI) Applied Materials (AMAT) Australian dollar vs Japanese yen (AUD/JPY) Best Buy (BBY) BHP Group Limited (BHP) Corning Incorporated (GLW) DoorDash (DASH) Financial Select Sector SPDR … Read more

A Rare Stumble for the Stock Market As Oversold Conditions Loom – Above the 40 (June 18, 2021)

Stock Market Commentary The Federal Reserve seemed to change the rules of the game. To-date, easy money policies and stubborn dovishness in the face of rising inflation was a formula for higher asset prices, reflation and inflation-friendly trades, and even rising fears of an over-heating economy. Last week, Federal Reserve Chair Jay Powell shifted the … Read more

Fakeout in Market Breadth Breakout and A Currency Warning – Above the 40 (June 17, 2021)

Stock Market Commentary The drag I described in the wake of the Federal Reserve’s pronouncements on monetary policy eroded the stock market a lot more than I thought. Market breadth printed a major fakeout with my favorite indicator plunging in the wake of deep selling in inflation-related trades from commodities to industrials to financials. The … Read more

A Fresh Crack in the Stock Market’s Complacency

A Fresh Crack from the Currency Market At the time of writing, the Australian dollar versus the Japanese yen (AUD/JPY) is falling below its 50-day moving average (DMA) (the red line in the chart below) for the first time since last September. This move is the latest yellow, perhaps red, flag on the stock market … Read more

A Rolling Interruption for the Stock Market’s Reopen Trade – Above the 40 (March 23, 2021)

Stock Market Commentary After writing the last Above the 40 post, I thought the market would soon force me off the fence and onto the bullish side of the pasture. Even with post-Fed churn in play, the market looked like it was digesting inflation fears pretty well. Instead, a rolling interruption for the stock market’s … Read more

A Great Stock Market Divergence – Above the 40 (March 12, 2021)

Stock Market Commentary A great stock market divergence clarified itself last week. Growth stocks, especially the expensive and/or speculative kind, took a back seat to industrial and consumer names and other stocks primed to benefit most from the global economies reopening on a fresh wave of liquidity. This divergence renders a generalized view of the … Read more

High-Tech Stocks Break Down In Fallout from Fierce Bear-Bull Battle – Above the 40 (March 5, 2021)

Stock Market Commentary The stock market continued its streak of trickiness. Buyers and sellers played a fierce bear-bull battle starting with one of the biggest fake-out one-day rallies since last September 2nd’s near parabolic run-up. Fresh money flowed into funds to start the month of March to for gains of 2.4% on the S&P 500 … Read more

Tricky Trading Quickly Took Stocks from Strength to Weakness – Above the 40 (February 26, 2021)

Stock Market Commentary The stock market got quite tricky last week. A day after buyers re-established control, sellers returned with a sustained fury. The selling on Thursday reflected the stock market’s split personality while the follow-up selling on Friday seemed broader. The pressure on the the stock market looks like an ominous setup for March … Read more

Another Swift Drop In Stocks Paved the Way for Fresh Buying Power – Above the 40 (February 24, 2021)

Stock Market Commentary The split personality of the stock market resolved into major breakdowns in the stock market on Tuesday…for about 30 minutes. Apparently increasing inflation fears gave way to the soothing words of Federal Reserve Chairman Jerome Powell at the Fed’s semiannual monetary policy report to Congress. Buyers quickly met the latest sharp and … Read more

A Split Personality Market Emerges from the End of Overbought Conditions – Above the 40 (February 19, 2021)

Stock Market Commentary The week ended with a split personality. While the S&P 500 meandered and the NASDAQ flattened, small caps rebounded convincingly. Financials also forged ahead. As a result, the recent end to overbought conditions may only signal (mild) bearish conditions for a portion of the stock market. The Stock Market Indices The S&P … Read more