ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
As the smoke started to clear from Friday’s post-Brexit carnage, one currency rose particularly well from the ashes: the Australian dollar (FXA). For example, against the U.S. dollar, the Aussie bounced perfectly off support at its 200-day moving average (DMA) and even maintained its earlier 50DMA breakout. Source: FreeStockCharts.com AUD/USD traded around 0.76 around the … Read more
On June 6, 2016 (U.S. time), the Reserve Bank of Australia released its latest statement on monetary policy. The pronouncement was as pedestrian as ever, including leaving rates untouched. The most notable difference from the current and the previous statement appears to be the RBA’s reflections on inflation. In the current statement, the RBA made … Read more
(This is an excerpt from an article I originally published on Seeking Alpha on February 14, 2016. Click here to read the entire piece.) Google Trends continues to prove itself useful in assessing the potential for important turns in the direction of gold, specifically the SPDR Gold Shares (GLD). On November 29, 2015, I wrote … Read more
The disappointing inflation numbers for Australia did not just take down the Australian dollar (FXA). Financial markets also rushed to ramp up the odds of a rate cut in the next policy meeting for the Reserve Bank of Australia (RBA). Source: ASX RBA Rate Indicator Even if the RBA takes a pass on a rate … Read more
I have become accustomed to a relatively predictable reaction to moves in the market’s expectations for rate hikes from the U.S. Federal Reserve. Last week began in the wake of the market finally bringing its expectations for the next rate hike back into 2016. The cascade of impacts from there were predictable: a stronger U.S. … Read more
(This is an excerpt from an article I originally published on Seeking Alpha on January 19, 2016. Click here to read the entire piece.) For a brief moment on January 15, 2016, the S&P 500 (SPY) looked ready to extend the sell-off that ended with the August Angst of 2015. At 1858, the index was … Read more
The U.S. dollar index ended 2015 on a strong note, but it has yet to develop any post-Fed momentum. Of the ten trading days following the rate hike from the U.S. Federal Reserve, the index has closed below that day’s intraday high five days. Notably, the intraday LOW of that day is still holding strong … Read more
This past week was an important one for monetary policy. The Bank of England (BoE) made clear it is willing to put off rate hikes as long as necessary. Despite its words that suggest otherwise, the Bank is NOT biased for action. U.S. Federal Reserve Chair Janet Yellen made it clear that, all else being … Read more
The market is once gain gearing up for a December rate hike from the U.S. Federal Reserve. Today’s nudge came from Janet Yellen her first public commentary since last week’s decision on monetary policy. At that time, a simple and clever change in language convinced the market to pull in the month for a first … 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