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 Inflation was the big story last week. I covered the details in “Bonds Try to Weigh on A Market Trying Harder to Look Past Stabilizing Inflation“. The stock market had a curiously mixed reaction that highlighted an on-going bearish divergence for the month of December. A market breadth breakdown contradicted impressive strength … Read more
Stock Market Commentary Imagine that. Key support holds firm across the major indices. A telling post-election reversal turned into proof positive that unrelenting bulls remain all-in for the stock market. Not even a further escalation in World War 3 brought pause to the rebounds off support (Russia fired an intermediate-range ballistic missile into Ukraine and … Read more
Stock Market Commentary Fades were on display, especially on Thursday, as the stock market showed signs of exhaustion. Bad news in and for the semiconductor industry seemed to motivate sellers. For example, earnings for Microsoft (MSFT) and Meta Platforms (META) seemed to release some steam on hyped expectations for the AI chips both companies will … Read more
Stock Market Commentary The U.S. stock market hardly reflected last week’s action-packed news. China scrambled to address a weakening economy with a massive stimulus program with news rolling nearly all week. In Japan, voters elected a Prime Minister who favors a stronger currency in the Japanese yen (FXY). Capping the anti-climactic feeling in U.S. stocks, … Read more
Stock Market Commentary The S&P 500 is down 4.1% month-to-date. This loss makes this month a below average September for a maximum drawdown and fulfills September’s reputation as one of the index’s three most dangerous months of the year. As I noted last week, August’s extreme drawdown significantly increased the risk of September being worse … Read more
Alphabet, Inc (GOOG) was my favorite stock in my generative AI trade. No more. After OpenAI announced SearchGPT, GOOG fell 3.0%. The decline followed a 5.0% post-earnings loss and confirmed a bearish breakdown below the 50-day moving average (DMA) (the red line in the chart below). While SearchGPT is still a prototype, even the idea … Read more
Stock Market Commentary In the prior week a post-earnings pricequake from Meta Platforms (META) dominated the stock market headlines. Last week, an Apple buyquake dominated the headlines and week-ending trading after the company announced a record $110B buyback. The subsequent gain in AAPL turned my simple test dividing bearish and bullish trading action into a … Read more
Stock Market Commentary A curious break in the trading action unfolded as financial markets wrestled with two “disappointing” inflation reports. Both the CPI (consumer price index) and wholesale inflation (the producer price index or PPI) came in slightly higher than “expected” (headline and core). The data just tell me expectations are unrealistic or at best … Read more
Stock Market Commentary Instead of climbing a wall of worry, the market is climbing a wall of frustration (I stole that from a friend of mine). No matter what economic indicators bears stare at to declare impending doom, the jobs market just keeps coming in hot month-after-month. While a widening swath of stocks are breaking … Read more
Stock Market Commentary Despite strike one and strike two against the market rally, buyers are stretching out this overbought period. The jobs report for November seemed to further support the case of an economy that survived the Fed’s rate hike cycle even as the case recedes for near-term rate cuts. The stock market responded by … Read more