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 churn zones continued to hold sway over the market last week. Buyers effectively fought off a descent into a bear market by rallying the major indices up and out of the churn zone. Still, the narrative of churn stands thanks to a refresh of fear from Facebook’s post-earnings blow-up. Meta Platforms, … Read more
Stock Market Commentary: I started last week’s trading with a call for discipline over precision. That post turned out to be timely as the bears and bulls took the stock market on a wild ride through the Fed’s latest monetary policy decision (more on that in a future post). The indices plunged deeply on Monday … Read more
Stock Market Commentary: The week’s trading started with intraday extremes to the downside and upside. With such wild swings at work, it is tempting to look backward and conclude that timing bottoms and tops are possible. This reach for precision distracts from the discipline required to navigate through the volatility. Relying on trading and investing … Read more
Stock Market Commentary: The stock market is expressing its disappointment with the Federal Reserve’s plans to tighten monetary policy. The Fed will have the backdrop of a sharp market sell-off when it meets this week to further execute on those plans. Like a forlorn partner, stocks sent a wistful love note to the Fed asking … Read more
Stock Market Commentary Investor psychology took another hit. A spirited relief rally turned into a dispiriting fade and reversal that had tinges of bear market action. The bear-like fade stretched the stock market closer to oversold trading conditions. All three major indices covered here are now setting multi-month lows. They are also very extended to … Read more
Stock Market Commentary Investor psychology took an important hit this week. During the Goldman Sachs (GS) Q&A period for the Q4 2021 earnings conference call, Chairman and CEO David Solomon dropped an inflation bomb. Solomon claimed that “there is real wage inflation everywhere in the economy, everywhere” (from the Seeking Alpha transcript). Solomon responded to … Read more
Stock Market Commentary The stock market survived a choppy week. The churn almost looked like stabilization after a disappointing start to the new year. However, the attempt to absorb the news of a hawkish Fed is taking its toll in the form of toppiness. With each passing day I get more and more wary about … Read more
A correction in financial markets is conventionally defined as a decline of at least 10% from an all-time high. At its lows of the day, the NASDAQ (COMPQX) found itself down 9.3% from the all-time high set almost two months ago. The depths of this decline also marked an important breach: the NASDAQ traded below … Read more
Stock Market Commentary The strong end to 2021 mattered for just one day so far in 2022. Presumably fresh passive investments helped create a broad surge on the first day of the year. Wednesday’s release of the minutes from the Federal Reserve’s December meeting changed everything. Apparently, the Fed talk sounded a lot more hawkish … Read more
Stock Market Commentary The rebound from oversold conditions leading into Christmas provided just enough fuel for a one day Santa Claus rally. After the week started with a rush for Santa, the excitement fizzled like kids opening their last Christmas gifts. Still, the rally was enough and ended 2021 on a strong note. The S&P … Read more