ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
The financial markets finally got a bailout package for Greece – and they vigorously sold off on the news. (Yes, there are plenty of other negatives out there as well…all ignored until now). The good news is that the S&P 500 remains higher than it was back in January when the stock market last cared … Read more
Ever since moving this site to a more standard blog format last September, I have been able to write more articles, more consistently. In that time, I hope I have delivered some value to those listening out there in the blogosphere. Now, it is time for a partial hiatus as I attend to personal and … Read more
Although the S&P 500 almost touched its high for the year on its eighth up day out of the last nine trading days, the VIX (the volatility index) increased almost 4%. So, as the S&P 500 scrapes at fresh 18-month highs, the VIX is bouncing from 21-month lows. The chart below shows the current action … Read more
The stock market’s bounce from oversold conditions has been as impressive as almost all other such bounces over the past year. I noted in early February that several technical indicators were pointing to a buying opportunity. One of those indicators, the percentage of stocks trading above their 40-day moving averages (also known as “T2108“), is … Read 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