ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
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
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
After the stock market finally tumbled from overbought conditions, I concluded that “…hope remains for bullish wishes, but all the warning signs are tilting comfort levels to the bears.” Bears are now making themselves feel right at home. On Tuesday, the S&P 500 lost 1.6% on higher than average volume, creating the kind of strong … Read more
After 46 days, the stock market finally dropped out of overbought conditions. On Friday, T2108, the percentage of stocks trading above their respective 40-day moving averages (DMAs), plunged below the 70% overbought threshold all the way to 62.5%. The stock market had a historic run. These past 46 trading days created the sixth longest overbought … Read more
Another week, another extension of a historic overbought period in the S&P 500. Based on the closing performance of the stock market’s major indices, you probably would not guess that one of the stock market’s largest companies (Cisco) lost 16% on the day. If there was a day for the market to have an excuse … Read more