ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
The news headlines rang out today that Russia’s leader Vladimir Putin gave the orders to send “peacekeeping” troops into two breakaway regions of Ukraine. Stock market futures reacted instantly. Yahoo had a particularly dramatic headline declaring that futures “tanked.” Reflexively, I checked CNBC to review the preliminary damage: S&P futures down 1.8% and the NASDAQ … Read more
Deteriorating market breadth flashed warning signs for the stock market once again. A signal from the currency market is adding weight to the warning: the Australian dollar versus the Japanese yen (AUD/JPY). AUD/JPY represents the divergence dragging on the stock market. AUD/JPY topped out from March to June, a period over which many individual stocks … Read more
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
“Other scenarios for the recovery phase can readily be envisaged. Given the relatively rapid decline in the number of new COVID-19 cases in Australia, it is possible to contemplate an upside scenario where most domestic restrictions on activity are relaxed a little sooner and the economy recovers somewhat faster than in the baseline scenario. The greater … Read more
This post is a quick addendum to the Above the 40 post I published just ahead of a complete freefall in global financial markets. At the time of writing, futures are showing a 5% drop in the S&P 500 (SPY)! The crash is reflected in real-time in the currency markets. I actively watch the Australian … Read more
Last week’s geo-political drama had all the makings of an escalation to all-out war. A country incensed about the assassination of its top general lobbed missiles at airbases its enemy occupies in a neighboring country. Everyone braced for the typical response of attacking the sites that lobbed the missiles. With its borders breached by the … Read more
With the U.S. dollar index (DXY) last tested its 200-day moving average (DMA) support, I pondered the possibilities for a breakdown. The U.S. dollar index typically sustains moves through its 200DMA, whether a breakout or a breakdown, so I braced myself for the need to jettison my long dollar positions. Instead of follow-through, the U.S. … Read more
The economic data continue to worsen in Europe. While it is difficult to find signs of concern in U.S. markets, wariness is etched in a few key corners of financial markets. Precious Signals Notably, the precious metals gold and silver look ready for a fresh upward push. Gold and silver can perform well in times … Read more
AT40 = 28.8% of stocks are trading above their respective 40-day moving averages (DMAs) AT200 = 39.9% of stocks are trading above their respective 200DMAs (2-month low)VIX = 19.9Short-term Trading Call: cautiously bullish (see caveats below) Stock Market Commentary Presidential Decrees “Q Six hundred and twenty-three points — that’s what the Dow was down today … Read more
The threat of Chinese resistance to sky high iron prices was just enough to put a halt to a parabolic run-up in prices. After a sharp drop, iron ore prices quickly rebounded and have remained relatively flat for about two weeks. The stocks of related iron-ore companies turned around after an initial sharp sell-off. Last … Read more