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: After much resistance to Fed hawkishness, the U.S. stock market gave way to fresh bearishness. The major indices dropped into new depths of the bear den. The stocks below are snapshots of the latest deterioration in the price action and decline in the technical health underlying the stock market. The ARK funds … Read more
Stock Market Commentary Russia’s invasion of Ukraine has created massive human misery and a historic press of global economic sanctions. With war comes scarcity and the allocation of resources to destroying the resources of others. Financial markets are scrambling to adjust to the new global wartime economy. These charts are just a snapshot of some … Read more
Stock Market Commentary Trading with on-going headline risk is difficult for bulls and bears. I find it useful to pick a narrative, pick an anchor, and stay as disciplined as possible. My foundation remains with the principles of trading contrary to extremes. Last week, the market tested the extremes of oversold trading conditions and survived … 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
The Follow-Through: Churning While the S&P 500 (SPY) cruised higher all week, much of the rest of the market resigned to churning. The dichotomy of a market rebound versus the wounds left to heal continued to play out. Many of the follow-through trades for this week churned with the rest of the stock market. See … Read more
Stock Market Commentary Even the Federal Reserve must sit back and marvel as the S&P 500 (SPY) refuses to rest for long. Post-Fed handwringing sent the stock market into a period of doubt over previous assumptions of inflation fears. The previous week even ended with oversold conditions looming. However, as is the case with so … 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
Stock Market Commentary All March long the stock market wrestled with inflation fears. After the S&P 500 (SPY) successfully rallied away from its 50-day moving average (DMA) (red line in the chart below) in early March, I recognized signs that the stock market’s churn was a sign of digestion of these fears. Yet, so-called growth … Read more
Stock Market Commentary After sweeping away bearish signals, the stock market moved right into overbought territory last week. The week started with a small gap up to all-time highs, and the stock market never looked back. More importantly, the volatility index (VIX) hit a new low since the stock market broke down almost a year … Read more
Stock Market Commentary The stock market gapped up and never looked back in the wake of the Presidential Inauguration. Subsequently, buyers produced mixed follow-through for two days. Big cap tech defied the narrative of a rotation into value and industrial names by delivering the most convincing follow-through. A third drop from overbought conditions in a … Read more