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 The summer of discontent is proving more abrupt, sharp, and violent than I expected. The promising rally out of the shadow of the bear stopped cold at the steep downtrends formed by 20-day moving averages (DMAs) (the dotted lines in the charts below). A test of 50DMA resistance (the red lines below) … Read more
Stock Market Commentary Traders switched up sentiment in the stock market with a flash. After struggling under the shadow of the bear for nearly two weeks, buyers made a bullish dash for stocks. The major indices flipped from key fades at critical resistance to convincing slices through key resistance. The broad based buying put a … Read more
Stock Market Commentary The edginess of the stock market continued this week. After “turnaround Tuesday” delivered broad based gains for the market, Fed Chair Jerome Powell’s testimony in front of Congress produced a familiar fade in the shadow of a bear market. Surprisingly, the buying was enough to end oversold conditions. Yet, the major indices … Read more
Stock Market Commentary Central banks are scrambling in the face of what is becoming a summer of discontent. Last week was chock full of news from monetary policy. The Federal Reserve, the Bank of England (BoE), and even the Swiss National Bank all took action against inflation. The European Central Bank (ECB) held an (underwhelming) … Read more
Stock Market Commentary The rumors were true. The Federal Reserve decided to pump up interest rates by 75 basis points (bps) (0.75%) instead of the 50 bps originally anticipated by financial markets. The historic move was the largest point increase since 1994. During the press conference explaining the latest decision on monetary policy, Chair Jerome … Read more
Stock Market Commentary Over two years ago, a lethal virus forced the economy to shut down. The Federal Reserve was one of many to rush to the rescue with historic sums of liquidity. Today, the economy stubbornly runs hot, and the Fed is rushing to “shut down” financial markets to cool down economic activity “just … Read more
Stock Market Commentary First, a strong jobs report unnerved the stock market. Next, strong inflation unraveled the stock market as bear market trading beat stocks back to oversold’s edge. Perhaps ironically, the White House sounded an early alarm bell about the inflation report and gave market participants a head start in selling. Sellers quickly flipped … Read more
Stock Market Commentary Good employment news came in the form of the May jobs report. The unemployment rate stayed flat at 3.6% while the U.S. economy added 390,000 jobs. Both the number of unemployed and the unemployment rate are essentially back to the pre-pandemic levels of February, 2020. The labor force participation rate remains 1.1% … Read more
Stock Market Commentary After 8 weeks of downward selling pressure, it is hard to pivot thinking on the stock market. Yet, the technical situation requires just such a switch. While the first oversold dip of May was unconvincing, I did flip (cautiously) bullish after the stock market closed oversold for the first time in 519 … Read more
Stock Market Commentary: The Federal Reserve released the minutes from its May policy meeting. While reporting on the minutes suggest the content contained nothing new, the stock market found rally material anyway. Perhaps it was a relief rally from the fallout in social media stocks. The broad-based buying pushed the stock market out of a … Read more