ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
I did not think the dollar would test the critical multi-year support line this soon. I thought the prospects for an economic recovery that is looking stronger than in competing developed economies would be sufficient to give the dollar a helping hand up despite the Federal Reserve’s best attempts to keep grinding the currency into … Read more
The iShares MSCI Brazil Index Fund ETF (EWZ) broke out in early September, 2010 from an important downtrend pattern. At the time, I lamented that I missed the move because I was still playing the strategy of waiting for a 20% correction in EWZ before making a purchase. On Friday, EWZ completed a roundtrip from … Read more
On Monday, Goldman Sachs added First Solar (FSLR) to its conviction buy list with a $165 price target. The market’s response was swift with FSLR ending the day up 6% and a closing price of $156.40. I wish I had received the memo because I sold off the last of my FSLR positions on Friday. … Read more
The “cooling off” of silver and gold has unfolded very slowly over several months. On Thursday, this process entered yet another phase. This time, silver made a clean and strong break below its 50-day moving average (DMA). Silver even made its first lower low since the latest rally began in late summer. Gold has spent … 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
I was clearly far too early in restarting a pairs trade short Microsoft (MSFT) and long Intel (INTC). Over the past two months, the performance of MSFT has steadily improved, while Intel’s performance has steadily worsened. The MSFT/INTC ratio is now at 10 month highs. Source: stockcharts.com Typically, I would look at this divergence and … Read more
The cooling process for gold and silver has moved slowly and deliberately. The first step featured a fight through parabolic upswings, especially for silver. The next step finally seems underway with the first break of primary (short-term) uptrends. Gold closed below its 50-day moving average (DMA) for the first time since August. Silver closed below … 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
Research In Motion (RIMM) reported earnings December 16, 2010. The general reaction to the report has been muted with the stock trading down 1.7% since the market close before the report. I have followed RIMM’s stock repurchasing activity for a while now, but I neglected to note earlier that RIMM announced the (aggressive) completion of … Read more
I thought it would be fitting to close out another year of blog posts to celebrate the performance of one of my favorite investments: the Australian dollar. Despite beginning the week with another round of tightening by Chinese monetary authorities, the Australian dollar put on another stellar show. The “Aussie” closed the week up over … Read more