ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
In “Jim Bianco: “Arguably One of the Worst Forecasts In Fed History’” I wrote about the prospects of trading soaring interest rates with the iShares 20+ Year Treasury Bond ETF (TLT). I have recently and belatedly faded rallies in TLT by buying puts and taking small profits on the way back down. (TLT goes up when … Read more
Stock Market Commentary A promising week of post-oversold trading ended in tensions over inflation, interest rates, and Ukraine. Overall, the stock market remains locked in churn. Yet, the view from individual stocks can provide cause for greater alarm. End of the week selling in big cap tech raised a red flag against my overall bullishness … Read more
Stock Market Commentary And just like that, the bullish expansion of market breadth hit a wall…a wall of inflation. The October Consumer Price Index (CPI) for all urban consumers apparently surprised financial markets by soaring 0.9% from September and 6.2% over October, 2020. The chart below shows that both surges are at the high end … Read more
Stock Market Commentary I feel like a broken record pointing out the shrinking participation accompanying the stock market’s persistent rally. However, the downtrend in market breadth becomes more and more notable over time. More signals converged this week of eroding underlying conditions despite the all-time highs on the S&P 500 and the NASDAQ. Even the … Read more
The Follow-Through Intro The biggest follow-through trades from “Key Stock Sectors Missed A Breakout In Market Breadth – Above the 40” (June 11, 2021) erupted in the housing-related plays. Big cap tech looks more ready than ever to reestablish its leadership position over the market. The stock market had an initial negative reaction to the … Read more
Stock Market Commentary The stock market struggled for months against the downtrend line on market breadth. The struggle ended last week. My favorite technical indicator of breadth AT40 (T2108) broke out and closed the week at 61.9%. Now I start a countdown toward a test of the overbought threshold. However, several sectors dampened the week’s … Read more
North American: The United States “What we’re seeing now is an economy that seems to be at an inflection point….we feel like we are at a point where the economy is about to start growing much more quickly, and job creation coming in much more quickly…we see strong growth and strong job creation starting right … Read more
Stock Market Commentary A great stock market divergence continued last week. However, the market overall is looking more and more resilient as it continues to digest inflation fears. Even the biggest victim of the great divergence, the NASDAQ (COMPQX), remains well above its lows for the month. A very dovish session with Federal Reserve Chair … Read more
Stock Market Commentary The stock market got quite tricky last week. A day after buyers re-established control, sellers returned with a sustained fury. The selling on Thursday reflected the stock market’s split personality while the follow-up selling on Friday seemed broader. The pressure on the the stock market looks like an ominous setup for March … Read more
Stock Market Commentary After sweeping away bearish signals, the stock market moved right into overbought territory last week. The week started with a small gap up to all-time highs, and the stock market never looked back. More importantly, the volatility index (VIX) hit a new low since the stock market broke down almost a year … Read more