ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
{revised August, 2024} The Most Dangerous Months The stock market’s most dangerous months are August, September, and October. Since 1951, the S&P 500 (SPY) has suffered its three highest average maximum drawdowns in these months. A drawdown occurs when sellers put downward pressure on prices. The maximum drawdown is the largest (most negative) such loss … Read more
AT40 = 51.3% of stocks are trading above their respective 40-day moving averages (DMAs)AT200 = 48.9% of stocks are trading above their respective 200DMAsVIX = 18.6Short-term Trading Call: cautiously bearish Stock Market Commentary The Big Question: Another Q4 Sell-Off? “Last year can’t happen because of last year” Tim Seymour, CNBC’s Fast Money, October 1, 2019 … Read more
It seems like the odds favor a strong bounce to close the year if only to bring the December drawdown a little closer to historic norms. At least the timing would be right given deep oversold trading conditions. Of course, a “reversion to the mean” is not reason enough to expect a strong year-end rally. … Read more
The S&P 500’s maximum drawdown for October was 9.4% on a closing price basis. That was the third worst October for the S&P 500 (SPY) on a drawdown basis since since 1951. Only the 30.1% maximum drawdown from October, 1987 and the 27.2% maximum drawdown from October, 2008 were worse. THAT is some awful company … Read more
October is the stock market’s second most dangerous month based on average drawdown on the S&P 500 (SPY). This year’s October is living up to the reputation after an October, 2017 that never delivered a close below September’s month-ending price. So far this month the S&P 500 has lost 5.0% with a maximum drawdown of … Read more
(T2108 measures the percentage of stocks trading above their respective 40-day moving averages [DMAs]. It helps to identify extremes in market sentiment that are likely to reverse. To learn more about it, see my T2108 Resource Page. You can follow real-time T2108 commentary on twitter using the #T2108 hashtag. T2108-related trades and other trades are … Read more