ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
The stock market printed a timely and picture-perfect bounce on Friday. Ahead of the rally, I presented the relatively strong case for the bulls based on the previous 3-day pullback. By closing above Wednesday’s high of 1318, the S&P 500 is also poised to continue its gains. However, looking beyond this bounce from support, the … Read more
Buyers are again lifting the stock market from its intra-day lows and providing some potential clues on where to draw the bull/bear lines from a technical perspective. The case for a bullish setup is relatively strong: Three days of high volume selling is washing out sellers. 50-day moving average (DMA) essentially successfully retested, leaving primary … Read more
For one day at least, sellers converged with stock market technicals to deliver a large one-day drop in the S&P 500. As it turned out, the three-month highs in T2108, the percentage of stocks trading above their 40-day moving averages (DMAs), did matter after all. T2108 plunged along with the stock market for its worst … Read more
Over the past two days, I have crowed about silver, pondered whether gold will catch up, and marveled at the doubling in the S&P 500 from the March, 2009 lows. Yet, I failed to put the stories together into one chart for proper context: the S&P 500 priced in gold. Of course, almost every gold … Read more
T2108, the percentage of stocks trading above their respective 40-day moving averages (DMAs), has finally moved higher. For much of 2011, T2108 has lingered just above or just below the overbought threshold of 70% (see my new T2108 resource page). It is now at 74.6%. The last time T2108 was this high was 3 months … Read more
I thought I would get extremely bearish once the S&P 500 reached my upside resistance target of 1300-1310. Yet here we are just five weeks into the year, and the deepest angst I can summon is an uncomfortable sense of “caution.” With T2108 – the percentage of stocks trading above their respective 40-day moving averages … Read more
A month ago, I laid out the case for the S&P 500 sustaining its upward momentum. I pointed to 1300-1310 as the next point of strong resistance. As the S&P 500 nears that point (half of a percent away now), I marvel at how quickly this test has come. T2108, the percentage of stocks trading … Read more
Throughout the stock market’s meandering upward in December, I maintained that technical conditions were not yet overbought. I also noted that T2108, the percentage of stocks trading above their 40-day moving averages (DMAs), would likely not reach the overbought threshold (at least 70%) until a rush of “panicked buyers” sent the market soaring higher. I … Read more
Last week, I claimed that the market is not yet overbought and that any corrections in the short-term will most likely be shallow. Without some specific and new catalyst, traders and investors, especially the ones who missed this latest rally, will treat pullbacks as golden buying opportunities. Moreover, I noted how, as expected, many analysts … Read more
I have seen and heard several headlines pronouncing that the market is overbought, extremely overbought even. Yet, my favorite oversold/overbought indicator, T2108, the percentage of stocks trading above their respective 40-day moving averages (DMAs), has calmly churned around 60% for almost the entire month of December. The market is typically considered overbought after T2108 crosses … Read more