ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
While the volatility index (VIX) is only reluctantly responding to the latest turmoil in financial markets, other safety trades are moving in full steam. The “safety trade” I left out of my last post covering the stock market was the Swiss franc (FXF). At the time of writing the Swiss franc fell to a near … Read more
AT40 = 45.4% of stocks are trading above their respective 40-day moving averages (DMAs) (2+ month low)AT200 = 38.8% of stocks are trading above their respective 200DMAsVIX = 16.5 (20.9% gain)Short-term Trading Call: bearish Stock Market Commentary Friday’s trading action provided delayed confirmation of my short-term bearish trading call. The week previous to the last, … Read more
AT40 = 35.5% of stocks are trading above their respective 40-day moving averages (DMAs) AT200 = 31.6% of stocks are trading above their respective 200DMAs VIX = 20.5 Short-term Trading Call: neutral Commentary via GIPHY The bears took back complete control of the market. Friday, they sent up the warning signal with the screeching of … Read more
I am riding the long U.S. dollar index (DXY) trade based on two simple drivers: 1) a U.S. Federal Reserve pacing for four rate hikes in 2018, and 2) an expanding trade war, especially against China, which on balance will create more demand for U.S. dollars especially relative to those currencies who stand to lose … Read more
AT40 = 31.2% of stocks are trading above their respective 40-day moving averages (DMAs) AT200 = 48.0% of stocks are trading above their respective 200DMAs VIX = 18.6 (17.7% gain) Short-term Trading Call: bullish (caveats below!) Commentary During the thick of the sell-off earlier this month, I stated with tongue-in-cheek that Federal Reserve Chair Jerome … Read more
AT40 = 64.0% of stocks are trading above their respective 40-day moving averages (DMAs) – ended a 1-day overbought period AT200 = 62.7% of stocks are trading above their respective 200DMAs VIX = 11.7 Short-term Trading Call: bullish Commentary It figures that just one day after the stock market finally crossed into overbought territory, it … Read more
Speculators have not been this bullish on the euro since at least 2008. Source: Oanda’s CFTC’s Commitments of Traders These charts reveal a distinct sentiment shift on the euro this year. Since 2008, speculators spent the majority of the time as firm euro bears. The new high in net long positioning going into 2018 signals … Read more
AT40 = 68.2% of stocks are trading above their respective 40-day moving averages (DMAs) (high of 69.4%) AT200 = 57.2% of stocks are trading above their respective 200DMAs VIX = 10.2 Short-term Trading Call: cautiously bullish Commentary In my last Above the 40 post, I noted how the stock market bent but stubbornly refused to … Read more
Currency speculators have not been this bullish on the Mexican peso in about four years. The Canadian dollar (FXC) has enjoyed such bullishness for a year longer. Source for charts: Oanda’s CFTC’s Commitments of Traders I have traded alongside these bulls for several months now, but I decided this week to pull in the reins … Read more
The Japanese yen (FXY) is the one major currency that has been notably weaker than the U.S. dollar for most of the past month. USD/JPY peaked in December, 2016, but it looks like the sell-off bottomed out in April. Source: FreeStockCharts.com This yen weakness has been particularly evident against strong currencies, like the euro (FXE), … Read more