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 Fades were on display, especially on Thursday, as the stock market showed signs of exhaustion. Bad news in and for the semiconductor industry seemed to motivate sellers. For example, earnings for Microsoft (MSFT) and Meta Platforms (META) seemed to release some steam on hyped expectations for the AI chips both companies will … Read more
Stock Market Commentary The stock market poetically swung from the depths of despair with a seasonal September drawdown to a sharp rebound in giddy anticipation of rate cuts from the Federal Reserve on Wednesday. The highly anticipated meeting has the potential to set the market’s tone for the remainder of the year. If Chair Jerome … Read more
Stock Market Commentary Welcome to the start of the stock market’s three most dangerous months of the year. A weak jobs report for July helped to send market sentiment into a sharp reversal. The bad economic news suddenly turned the prospect of rate cuts into something to fear. These rate cut fears spun the market … Read more
Stock Market Commentary I saw a simple test for distinguishing bearish and bullish signals after META’s post-earnings swoon last month. A quick rebound following failed tests at resistance complicated the picture. The price technicals and dynamics returned to simple as a synchronized yet quiet breakout unfolded last week across the S&P 500 and the NASDAQ. … Read more
Stock Market Commentary: “The U.S. economy remains fundamentally strong, despite recent mixed data. Recent developments have increased the risk of a future adverse outcome. Our fortress principles are designed to withstandany operating environment.” JP Morgan Chase & Co (JPM), Investor Day 2022, Firm Overview, page 12 Starting from oversold conditions, the market was looking for … Read more
Stock Market Commentary Russia’s invasion of Ukraine has created massive human misery and a historic press of global economic sanctions. With war comes scarcity and the allocation of resources to destroying the resources of others. Financial markets are scrambling to adjust to the new global wartime economy. These charts are just a snapshot of some … Read more
Stock Market Commentary Trading with on-going headline risk is difficult for bulls and bears. I find it useful to pick a narrative, pick an anchor, and stay as disciplined as possible. My foundation remains with the principles of trading contrary to extremes. Last week, the market tested the extremes of oversold trading conditions and survived … Read more
Stock Market Commentary A week ago I pointed out the key signs suggesting the bear cycle was likely already ending. Last week, the S&P 500 (SPY) confirmed the end of the bear cycle with fresh all-time highs. Yet, consistent with this year’s theme, market breadth was left behind in catch-up mode. The momentum on both … Read more
Stock Market Commentary The week began with two straight days of selling for the stock market. Almost everything was in place for a real pullback. Although the S&P 500 (SPY) was less than 2% off its all-time high, my favorite measure of breadth in the stock market, AT40 (T2108), the percentage of stocks trading above … Read more
Stock Market Statistics AT40 = 59.0% of stocks are trading above their respective 40-day moving averages (DMAs) AT200 = 55.6% of stocks are trading above their respective 200DMAs (8-month high) VIX = 27.6 Short-term Trading Call: cautiously bullish Stock Market Commentary The stock market cooling continued all of last week. After a sharp one-day pullback … Read more