Blog: The Blog of Adam H Grimes

I’ve been doing some exciting and challenging work recently, and want to share some of it with you. A quick biographical sketch, for those of you who don’t know me: I’ve been trading full time more or less continuously since the late 1990s. I found my first successes as a day trader, first in the currency futures in the late 1990s and then...

One of the critical questions traders must answer is how to reconcile conflicting information. If we are seeing markets clearly, there are always factors and arguments to be made for both directions. In the current market, we've seen enough selling pressure in recent weeks to break key support in indexes and to tilt the near-term probabilities to the downside. (See chart of the...

All eyes will be on the FOMC mid-week, and we expect that markets will react, perhaps with extreme volatility, to any comments. This environment should underscore the futility of trading on the news-traders who do so will continually find themselves a step behind. Recent weeks have seen markets diverge sharply, with some lagging sectors picking up strength. The Nasdaq has been insulated from...

One of the things that has surprised me over the years (in a good way!) is that macro shocks align with technical, more often than not, when technical patterns are strong. For instance: it's extremely unusual to see a very bullish pattern in a market torpedoed by bad news. "Bad things" happen in stock indexes after a decline is already underway. Sharp, snapback...

The last few weeks have seen stocks under moderate pressure. Though bullish patterns have degraded on daily charts, our read of market conditions has been that this has not been the type of weakness that leads to further, significant selling. So, for intermediate-term swing traders, we've argued the correct position has been to stand aside. Though it's too early to tell, there's a...

Stocks were once again weak last week. While it's easy to extrapolate whatever the market is doing into infinity, it's important to put the move in context. This, in fact, is one of the common mistakes-to assume that strength will continue, or that weakness will lead to stocks cratering. The current weakness has moved us to a point of near term technical neutrality-not...

It’s been a while since I’ve written here. You’ve probably seen the weekly updates, under the Markets Unlocked tag—these have been useful, high-level summaries of market conditions and things we’re watching for the week ahead—as useful for me to write them as, I hope, it is for you to read them! But I’ve also been wanting to write a bit more here on...

Last week saw several rounds of strong selling pressure in stock indexes, including a classic downtrend day on Thursday. (See chart below, just for the illustration of a textbook-perfect downtrend!) However, this weakness may take on a different significance when put in longer-term context....

Last week saw some fireworks in stock indexes. Moved mostly by a handful of tech earnings and announcements with a solid dose of FOMC magic, US indexes chiseled out some solid gains for the week. We think there's a very good chance that any moderate decline or pause in indexes will be buyable for further strength, and remember that all-time highs are an...

As we head into the end of January, technical conditions in major stock indexes are showing a lot of strength. We see solid justification for short- term (< 2 week) swing longs, with the potential to extend those trades into further swings if supported by market action. In the chart at the top of this post, we see pressure against, and a possible break,...

The week ahead will feature some potentially market-moving datapoints. Watch, especially, GDP on Thursday and PCE on Friday. Current technical position The past week saw some of the strongest selling pressure in over a month, but buyers stepped in at the end of the week to arrest the decline, painting a weekly bar with a long lower tail. This is one of the...

The week ahead is a shortened holiday week (Monday close), but we've already gotten a little insight into market tone for the new year. Perhaps the most striking element is the handoff of strength from mega caps to smaller caps. Late in 2022, the DJIA led at every rally and was much stronger on every decline. So far, this year, the Russell 2000...

Happy New Year to all of my readers! We took a couple weeks off from these regular blog posts at the end of the year, but let's dig in and see what January has in store for us. Global stock markets Looking around the globe, we find few major stock markets with bullish setups. Most are leaning bearish to perhaps strongly bearish. Relative...

Here we go… heading into the end of the year. In terms of pure price patterns, there's a reasonable chance that an intermediate-term cycle top is in place in major indexes. While this is not a factor we use to support decisions, it's an interesting reinforcement of a number of other technical factors. It's worth spending a few moments marvelling at the degree...

Happy December, everyone. As we head into the end of the year, let’s take a quick look at where the market is likely headed in the near term, in the longer-term, and give a few moments to thinking about the “Santa Claus” rally. Near term structure Make no mistake about it, markets have been hard to read lately. On one hand, this is...

Markets were solidly locked in tight ranges this week, with many cryptocurrencies winding down in tight coils. We reminded our MarketLife members that, while such patterns always lead to great breakouts in trading books, in real life sometimes no breakout happens and the market just flatlines for a line time. Stock indexes are also holding tight ranges on daily charts (see chart), and...

The market had a stunning reaction to the CPI number this week, with one of the largest gap openings on record (to regular session hours), and a historic uptrending day on Thursday. Of course, this raises many questions. Many traders are seeking reassurance of their strong buy the dip mentality (footnote here: I’ve made this point many times but it must be repeated—over...

So, folks, there’s news: our yield curve model inverted (for the first time since 2007) on 10/27/22. While nearly everyone seems to be aware that the yield curve is inverted, it seems that few people understand the significance of this event. What does an inverted yield curve mean to you? I just did an hour-long presentation for our MarketLife members in which I...

Happy Halloween, everyone! As we head into the end of the first month of the last quarter of the year, the major news behind us is a GDP report. Politicians and talking heads widely reported that GDP growth shows the economy is fine—nothing to worry about, really—and that we dodged the bullet by avoiding a recession. This week, the Fed meeting will likely...