ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
Stock Market Commentary: Put all the headlines aside. Last week was all about the technicals. Picture-perfect support unfolded for the major indices and stopped bearish momentum dead in its tracks. Suddenly, the stock market went from the verge of confirming a short-term top from early February to looking ready to make a run at challenging … Read more
Stock Market Commentary: Was the second trading day of February the peak for the S&P 500? After a 1.4% gain nearly finished reversing the losses from last August’s Jackson Hole, the index lost momentum. While the index churned for the following 2 weeks, trashed stocks from 2022 continued to soar. Even that momentum seemed to … Read more
Stock Market Commentary: Last week was a bullish week for the stock market. Key breakouts on the major indices made a bullish case for stocks as buying strength conjured up overbought trading conditions. Yet another post-CPI celebration sealed the deal on a bullish convergence leading into the report on inflation. While it is tempting to … Read more
Stock Market Commentary: I expressed my surprise after the stock market soared in response to Fed Chair Jerome Powell’s inflation-fighting speech. I thought Powell simply reiterated known information with more reminders of the Fed’s inflation-fighting commitment. Since then, two strong economic reports in a row have sent the stock market into rapid retreat from that … Read more
Stock Market Commentary: Social unrest from fresh COVID lockdowns in China are already a distant memory for the U.S. stock market. Just as quickly as the stock market bearishly failed once again to hold overbought trading conditions, market breadth flipped the script to surge and rush back to overbought. Buyers and bulls celebrated a speech … Read more
Stock Market Commentary: Federal Reserve Bank of St. Louis President James Bullard did his best to dissuade financial markets from optimistic interpretations of recent softish inflation reports. The press release summarizing recent remarks was enough to send chills in the Fed pause/plateau/pivot theorists: “the policy rate is not yet in a zone that may be … Read more
Stock Market Commentary: I continue to underestimate just how much these bear market rallies price in misplaced optimism over monetary policy from the Fed. Although Chair Jerome Powell remained overall consistent with the Fed’s hawkish, inflation-fighting message, the stock market plunged after an initial post-release surge. Accordingly, the latest bear market breakthrough came to an … Read more
Stock Market Commentary: What was resistance for over two months is slowly becoming support for the stock market. The bullish trading action of the last week created an important breakout that confirmed the bottoming action from the previous week’s bullish engulfing pattern. While the stock market may continue to chase its tail before fighting its … Read more
Stock Market Commentary: A month ago, a CPI Shocker brought a bear market rally to an abrupt end and created an historically bad September. Today’s CPI Shocker, another inflation reading that came in hotter than expected (imagine that), generated a completely different, and bullish, response. The stock market gapped down at the open and buyers … Read more
Stock Market Commentary: Extreme trading behavior finally appeared right after I insisted the stock market looked uninteresting despite dropping into oversold conditions. Oversold conditions did a stretch toward the year’s lows and created enough concern to finally send the volatility index soaring. Looming over the trading action all day was a collapse in the British … Read more