ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
Last week, I claimed that the deeply oversold conditions presented a short-term buying opportunity, but that the downward trend in the percentage of stocks trading above their respective 40-day moving averages (DMAs) and 200DMAs (T2108 and T2107) pointed to a steadily weakening market in the near future. I expected sellers to step up at the … 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
Last week, I suggested that T2108 was at such low levels that the next spike in the VIX would represent a major buying opportunity. Sure enough, the VIX printed only its second higher high of the entire rally off the March lows and buyers rushed immediately into the market (put sellers probably also rushed in … 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