Yet Another Timely Lesson from Economic Exuberance

“One-Twenty Two” is a different narrative for students and fans of financial markets. This blog often examines the investing and trading implications of extremes in financial markets. By definition, an extreme condition marks a top or a bottom in prices and invites contrary thinking. For example, the cyclical concepts of “overbought” and “oversold” measure temporary … Read more

Rate Cut Promises Rescued A Stock Market Near Oversold – Above the 40 (June 7, 2019)

AT40 = 38.9% of stocks are trading above their respective 40-day moving averages (DMAs) AT200 = 44.8% of stocks are trading above their respective 200DMAsVIX = 18.9Short-term Trading Call: cautiously bullish Stock Market Commentary From opening at the edge of oversold trading conditions to closing on near panic buying, last week was a wild week! … Read more

Bitcoin Price Gets Extreme Relative To A Surge In Interest

Bitcoin (BTC/USD) is putting the Google Trends indicator to the test. The price of Bitcoin is surging at the same time this key indicator of sentiment is also surging (on a relative basis). Per the Google Trends hypothesis I have demonstrated over time, this surge in excitement is signaling an imminent reversal in the parabolic … Read more

Bitcoin Reawakens: Price and Search Trends Signal A Sustained Bottom

I have finally jumped into the crypto-era. Bitcoin broke out into the first “convincing” and buyable technical pattern I have seen since the bubble burst over a year ago. Breakout Anyone who follows cryptocurrencies knows by now that Bitcoin (BTC/USD) broke out last week. The move was a powerful one that launched the cryptocurrency out … Read more

Google Search Trends Confirm the Bitcoin Run-Up

I am a fan of using Google Trends for understanding the dynamics of financial markets. I have specifically used it in the past for analyzing extremes in sentiment and trading on gold. Given Bitcoin’s latest historical surge – this time through $11,000 – I wondered whether Google (GOOG) searches were increasing alongside the price of … Read more

Ulta Beauty Gets Ultra Ugly

I first wrote about Ulta Beauty (ULTA) in early September, 2016 after it confirmed a bearish breakdown from support at its 50-day moving average (DMA). I never traded the stock and missed the entire recovery and 31% gain to the last peak and all-time high in early June, 2017. It took another bearish breakdown for … Read more

Housing Market Review – A Notable Change In Tone (August, 2017)

The last Housing Market Review covered data reported in July, 2017 for June, 2017. The month from there marked a significant change in tone for home builders. The change in tone starts with the iShares U.S. Home Construction ETF (ITB) and its failure to hold support at its 50-day moving average (DMA) for the first … Read more

Chipotle Mexican Grill: A Quick Lesson In Trending

Last week, I thought a quick burst of morning buying in Chipotle Mexican Grill (CMG) was a potentially bullish sign for the hapless CMG. I anticipated buyers might finally be ready to stave off the relentless selling pressure. I even bought a call option and shares as a part of my speculation. So far, the … Read more

Forex Critical: Speculators In the Euro Last Did This Three Years Ago

Ahead of the second and final round of the French Presidential election, I noted a burst of euro-optimism. That optimism continued in the form of speculators turning net bullish on the euro for the first time in three years. Source: Oanda’s CFTC’s Commitments of Traders While this flip from bearish to bullish for the first … Read more

Above the 40 (May 11, 2017) – S&P 500 Snaps Back As SNAP, Well, Snapped

AT40 = 49.1% of stocks are trading above their respective 40-day moving averages (DMAs) AT200 = 57.2% of stocks are trading above their respective 200DMAs VIX = 10.6 (volatility index) Short-term Trading Call: bullish Commentary The week started with the volatility index, the VIX, plunging to a 14-year low. I held onto my put options … Read more