ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
AT40 = 37.4% of stocks are trading above their respective 40-day moving averages (DMAs) AT200 = 57.8% of stocks are trading above their respective 200DMAs VIX = 13.0 (volatility index) Short-term Trading Call: bearish Commentary In my last “Above the 40“, I noted how the stock market took a pause in deference to the growing … Read more
Perhaps the shift was not large enough. Perhaps it was the magnetism of the 50-day moving average (DMA). After the Federal Reserve released the minutes from its last meeting on monetary policy, the U.S. dollar index (DXY0) promptly weakened. The dollar closed the day marginally lower after trading for a small gain in the morning. … Read more
A little over two weeks ago, I wrote “Yen Bulls Finally Back Down” to mark an important milestone: for the first time in a year, currency speculators went net short the Japanese yen (FXY). I closed out my long USD/JPY position and waited for the U.S. Federal Reserve meeting as well as confirmation of the … Read more
By now, traders should know the drill on these highly anticipated events that promise dire potential consequences… Traders build positions in anticipation of or to hedge against the potentially “adverse” outcome of the highly anticipated event. An outcome interpreted as adverse occurs and markets respond accordingly. The expected response to an adverse outcome turns out … Read more
(This is an excerpt from an article I originally published on Seeking Alpha on November 14, 2016. Click here to read the entire piece.) {snip} These quotes came from Mark Carney, governor of the Bank of England (BoE), in response to questions during the Q&A period of the November Inflation Report. I believe Carney reminded … Read more
(This is an excerpt from an article I originally published on Seeking Alpha on November 6, 2016. Click here to read the entire piece.) Analysts are once again making a case for using the Swiss franc (FXF) as a hedge against a big event. Last time, the franc was supposed to be a hedge against … Read more
Gold and silver may have finally topped out. The first technical clues came after SPDR Gold Shares (GLD) reversed all its incremental gains form the post-Brexit trade. I used that event and other indicators to posit a top for gold in late July. GLD promptly bounced from that support level. A month later I reiterated … Read more
Last week was full of important news for forex trading. As a dollar bull, euro bear, and yen bear, the week presented particular challenges that hedging could only soothe a little bit. I had a good run with these positions in recent weeks. As forex goes, a setback was due – just too bad the … 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
(This is an excerpt from an article I originally published on Seeking Alpha on June 1, 2016. Click here to read the entire piece.) After London’s former mayor Boris Johnson first announced his support for Great Britain’s exit from the European Union (EU), aka “Brexit,” the British pound (FXB) sold off for the rest of … Read more