ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
“Fed May Launch New Round of Stimulus.” So rang the headlines. The Federal Reserve seemed poised to launch another round of quantitative easing if only it had a weak economy to generate the proper excuse. An Associate Press article about steel stocks suggested that the market’s rally was specifically about the prospect of potential stimulus: … Read more
China’s sugar rush may be ending | James Saft China is an economy addicted to investment, a sort of fun house mirror of the U.S.’s addiction to consumption, with an astounding 93 percent of GDP growth in 2009 attributable to investment. That’s a strategy that worked well for years, but China’s response to the global … Read more
What has changed in the two months it took for silver to stampede its way up $15 (a 43% gain) and back? Did the Federal Reserve raise rates? Did the Federal Reserve threaten the market with rate hikes? Did the housing market rebound sharply, generating an expectation for higher rates? Did inflation expectations adjust sharply? … Read more
With the S&P 500 hitting fresh 3-year highs this week, the index is poised to recapture the previous uptrend that was interrupted by March’s double calamities of the Japan earthquake and hostilities in Libya. The stock market is overbought with T2108, the percentage of stocks trading above their respective 40-day moving averages (DMAs), at a … Read more
Tuesday’s expected gap down and steady buyback created a LOT of amazing charts. Many stocks I have reviewed bounced with picture-perfect accuracy off key support levels like 50DMAs and 200DMAs. The chart of the dollar index also caught my attention (as it so often does). For the past two days, the U.S. dollar has clung … Read more
After falling as much as 15% this year, Goldcorp (GG), my favorite way to trade gold, has shot up 20%. The move through February was almost a straight line and the stock moved particularly strongly last week. *Chart created using TeleChart: While I sold the last of my trading positions in GG last week, this … Read more
Over the past two days, I have crowed about silver, pondered whether gold will catch up, and marveled at the doubling in the S&P 500 from the March, 2009 lows. Yet, I failed to put the stories together into one chart for proper context: the S&P 500 priced in gold. Of course, almost every gold … Read more
I did not think the dollar would test the critical multi-year support line this soon. I thought the prospects for an economic recovery that is looking stronger than in competing developed economies would be sufficient to give the dollar a helping hand up despite the Federal Reserve’s best attempts to keep grinding the currency into … Read more
The “cooling off” of silver and gold has unfolded very slowly over several months. On Thursday, this process entered yet another phase. This time, silver made a clean and strong break below its 50-day moving average (DMA). Silver even made its first lower low since the latest rally began in late summer. Gold has spent … Read more
The cooling process for gold and silver has moved slowly and deliberately. The first step featured a fight through parabolic upswings, especially for silver. The next step finally seems underway with the first break of primary (short-term) uptrends. Gold closed below its 50-day moving average (DMA) for the first time since August. Silver closed below … Read more