ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
In early December, I was hopeful that the Turkish lira would finally find its footing. The Central Bank of the Republic of Turkey (CBRT) was aggressively hiking rates and currency reserves sat at record levels. The high interest rate (40% at the time) made betting on eventual currency appreciation appear worth the risk. While collecting … Read more
A week ago, the Central Bank of the Republic of Turkey (CBRT) hiked its policy interest rate another whopping 500 basis points to 40%. The response in currency markets was a collective yawn. The CBRT explained that while inflation performed in-line with expectations, “the existing level of domestic demand, the stickiness in services inflation, and … Read more
The bear market intrusion to the oversold period gave way to an explosion of bullish trading action this week. The maximum drawdown of October for the S&P 500 (SPY) was 4.0% well above the average for the month. This extreme move provided the perfect setup for the sharpness of the current oversold bounce. The rubber … Read more
Stock Market Commentary A bear market intrusion upset the dynamics of this oversold period. The NASDAQ is back in bear market territory. Both the NASDAQ and the S&P 500 broke down below their respective 200-day moving averages (DMAs) (the blue line in the charts below) and entered “correction” territory which is 10% below the 52-week … Read more
After Turkish President Recep Tayyip Erdoğan’s “war of economic independence” came to an official end, I waited for evidence that the Central Bank of the Republic of Turkey (CBRT) would get serious about fighting inflation. The monetary evidence may have arrived on August 24th in the form of a monster rate hike from 17% to 25%. In … Read more