ONE-TWENTY TWO: Trading Financial Markets
Since the year 2000, delivering a different narrative for students and fans of financial markets: stocks, options, currencies, Bitcoin, and more…
The S&P 500 is now over 4% off the lows from oversold conditions. 40% of this entire move came on today’s surge as the dollar plunged over 1% versus the euro. The thrills occurred DESPITE poor news flow from the Greek sovereign debt drama: for example, imminent strikes to protest austerity measures and German hesitancy … Read more
The inverse correlation between the U.S. dollar and the stock market has snapped back into play with a vengeance since the 15-month closing highs for the S&P 500 set on January 19th. On that day, the dollar index rose for a second day, forming what was to become the bottom of a small pullback in … Read more
On Friday, the S&P 500 broke down below the 50-day moving average (DMA) on high volume and volatility spiked over 50% during two days of heavy selling (charts at the end of this post). The S&P 500 has been here before. Since the March lows, this is the… Fourth break below the 50DMA: previous breaks … Read more
By now, everyone has noticed that the inverse relationship between the stock market and the U.S. dollar has broken. For December, the U.S. dollar index is up a healthy 4.7% while the S&P 500 is up 2.1%. I created two charts to demonstrate the dramatic nature of the change relative to trading before December. The … Read more
Whenever the market sells off, it is good to track whether the selling marks any change in character in the health of the market. Back in June, the change in character was marked by the deepest oversold conditions since March. Those conditions deepened into July and helped provide the fuel for the next strong leg … Read more
It turns out that the lower lows I noted in T2108, the percentage of stocks that are trading above their 40-day moving averages (DMAs), were indeed leading to at least one more lower low. T2108 fell dramatically today, from 48% yesterday to 23% today. This breaks the July lows as well as the series of … Read more
We have all heard the claims that traders take the summer off, choosing to exchange their flashing computers for the calm, cool breezes of the beaches of the Hamptons, Martha’s Vineyard, etc… Yet, year after year, it has appeared to me that summers deliver plenty of noteworthy trading action. I finally decided to take a … Read more
The VXX is an ETF that “offers exposure to a daily rolling long position in the first and second month VIX futures contracts and reflects the implied volatility of the S&P 500 index at various points along the volatility forward curve” (from Yahoo!Finance). This means it offers a method for placing bets on the direction … Read more
Caterpillar, Inc. (CAT) closed out Tuesday’s trading with an impressive 6% gain on volume 58% higher than average. *Chart created using TeleChart: For six weeks, CAT bounced inside a small trading channel as it consolidated impressive gains from the July lows and July’s earnings report. CAT is plowing ahead despite lingering and extremely high skeptical … Read more