ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
The bullish post-earnings scenario I painted for Apple (AAPL) worked out relatively well in the first day of trading. After AAPL quickly topped out, my proposed strategy for a calendar call spread rapidly transformed from under-performing the benchmark weekly $210 call strategy to outperforming. In the immediate wake of earnings, AAPL gapped over expected $215 … Read more
AT40 = 63.4% of stocks are trading above their respective 40-day moving averages (DMAs)AT200 = 55.1% of stocks are trading above their respective 200DMAsVIX = 12.9Short-term Trading Call: neutral Stock Market Commentary The stock market is keeping the faith. The previous week ended with a U.S. GDP report for Q1 2019 that represented well the … Read more
AT40 = 15.8% of stocks are trading above their respective 40-day moving averages (DMAs) – 2nd day of oversold period following 4-day oversold period AT200 = 33.9% of stocks are trading above their respective 200DMAs (up 6 percentage points) VIX = 20.1 (15% increase) Short-term Trading Call: bullish Commentary The 200-day moving averages (DMAs) still … Read more
AT40 = 57.5% of stocks are trading above their respective 40-day moving averages (DMAs) AT200 = 56.5% of stocks are trading above their respective 200DMAs VIX = 12.1 Short-term Trading Call: neutral Commentary In my last Above the 40 post, I expressed my lingering suspicion of the market’s rally and drive right past a bearish … Read more
The volatility index, the VIX, closed below 11 on April 24, 2017. That launched 184 trading days of extremely low volatility (ELV). The VIX is now just 1 more trading day away from finally bringing this historic event to an end. By my definition, it takes 20 trading days of the VIX closing above 11 … Read more
Trying to chase volatility higher has been like chasing fancy footwork. The S&P 500 (SPY) last completed a drawdown of 5% or more on November 4, 2016. That ended a period of pre-election weakness that began in early to mid-August, 2016. The last drawdown of 5% or more before that occurred around Brexit when the … Read more
A month ago, I wrote about the near seasonal pattern of speculators accumulating net long contracts in gold and silver from July troughs to October peaks. THIS year, the speculators started up on schedule but aborted the mission as net longs peaked well ahead of October. Source: Oanda’s CFTC’s Commitments of Traders So seasonal patterns … Read more
AT40 = 68.2% of stocks are trading above their respective 40-day moving averages (DMAs) (high of 69.4%) AT200 = 57.2% of stocks are trading above their respective 200DMAs VIX = 10.2 Short-term Trading Call: cautiously bullish Commentary In my last Above the 40 post, I noted how the stock market bent but stubbornly refused to … Read more
On April 17, 2017 volatility expert Steven Sears wrote an article in Barron’s called “Profiting From the Stock Market’s Latest Fears.” In this piece, Sears recommends that long-term investors take advantage of rising market anxieties by selling put options. The most nervous investors can cope by “…stockpiling cash and buying some bullish call options to … Read more
The volatility index, the VIX, has closed below 11 for 2 straight days, 3 of the last 6, and 6 of the last 13 days. Source: FreeStockCharts.com These low levels of the VIX seem dangerously low, and I have labelled them as such in my recent “Above the 40” posts. Yet, I have discovered the … Read more