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 Bearish engulfing patterns flag potential tops at the end of uptrends. They represent the potential exhaustion of buying power as price first opens above the previous day’s high and then closes below the previous day’s close. Thus, the latest round of bearish engulfing patterns in major indices and major stocks should be … Read more
Stock Market Commentary Last week was an intense week of trading. The ever-escalating conflict in the Middle East disturbed markets. However, the initial negative reaction in futures market was mostly erased by the time of the market open on Thursday. The indices even managed to gain ground before getting faded. Thus, the market still fundamentally … Read more
Stock Market Commentary The economic numbers keep coming up roses for the stock market. Last week’s celebration was driven by a soft inflation report for October that further emboldened buyers. A fresh surge in bond prices (lower yield) led the way as small caps in particular rocketed higher. The relentless buying pressure also solidified the … Read more
Stock Market Commentary: The Federal Reserve was an anti-climactic headliner last week. The Fed proceeded with a 25 basis points rate hike couched in words that suggested that inflation remained the Fed’s biggest concern. In the Q&A portion of the press conference, Chair Jerome Powell essentially downgraded the Panic of 2023 to the Speed Bump … Read more
Stock Market Commentary: The latest cryptocurrency scandal and implosion distracted the market (and me) from the upside potential of the October CPI (Consumer Price Index) report. Likely contagion, real and psychological, from crashing crypto prices helped drive distraught trading that created technical breakdowns across the major indices. U.S. midterm elections on Tuesday also apparently failed … Read more
Stock Market Commentary: What was resistance for over two months is slowly becoming support for the stock market. The bullish trading action of the last week created an important breakout that confirmed the bottoming action from the previous week’s bullish engulfing pattern. While the stock market may continue to chase its tail before fighting its … Read more
Stock Market Commentary I earlier wrote about a forlorn stock market writing a love note to the Federal Reserve. This love note comes in the form of a basket of sell-offs. The selling is so broad and so deep that traders could throw a dart and find descriptive stock charts. The examples below are some … Read more
Stock Market Commentary My bullishness waned with last week’s manic trading action. I called the resulting patterns choppiness toppiness to reflect a biding sense that the market is churning out some kind of lasting top. Still, under the surface of the churn is a fresh divergence. The stock market is full of digital lows and … Read more
Stock Market Commentary The stock market indices benefited from a strong 2021. year. However, under the surface, declining market breadth betrayed the bullish narrative for a wide swath of stocks. A disappointing start to the new year for the indices was even worse for those stocks already limping into the end of last year. The … Read more
AT40 = 66.3% of stocks are trading above their respective 40-day moving averages (DMAs) – Day #1 of an overbought period AT200 = 63.6% of stocks are trading above their respective 200DMAs VIX = 11.9 Short-term Trading Call: bullish Commentary The S&P 500 (SPY) made a resounding comeback from the previous day’s reversal. The move … Read more