ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
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
The S&P 500 printed fresh 2-year highs last week with decent volume. This marks a successful follow-through to the breakout from November’s trading channel. Given the index is now tagging the upper-Bollinger Band, it is even more likely that this move will be sustained, at least in the short-term. The longer-term chart suggests that the … Read more