Thursday Thrust – OPEC Cuts Back and Yellen Doesn’t Raise

Well, we got through Wednesday.  

I love this chart which shows what the Fed has, in the past, SAID rates would be and what, in fact, they actually were for the past 3 years.  So it's not too surprising that, no matter what Yellen and Co. say about raising rates this year – no one is going to believe them.  If you bet against rates rising every single time (20) that the Fed said they would be raising rates in an upcoming meeting – you only would have been wrong once – last December.  

There are new traders who have been on the job for 7 years now and have never seen a Fed Fund Rate at 1%.  Money is essentially free if you want it – that's just a fact of life – why would you plan for anything else?  If you want to expand – borrow money, if you want to buy out a competitor – borrow money, if your stock price is too low – borrow money to buy it yourself.  

Image result for corporate debt 2016

Non-Financial Corporate Debt is up $3 TRILLION since 2008 – and that is just the S&P 500 – globally, 16Tn has been borrowed by Corporations at a rate of $2Tn per year, 3% of our Global GDP is borrowed!  It took 50 years for corporations to rack up their first $3Tn in debt but the next $3Tn came in just 8 years.  Yes, of course the first $3Tn in debt led to a complete meltdown of the Global markets as companies found themselves unable to service that debt but this time is different – because they borrowed twice as much…  

US-SP-Distress-ratio-2013-2015Less than 25% of that debt is considered "distressed" (yields that exceed Treasury yields by at least 10 percentage points), that's nothing to be alarmed about, is it?  Only 112 companies have been declared in default by S&P as of January of this year but, in 2008, it was 125 – so we still have room to improve on that front before panic sets in.  We have a long position on SJB ($25) in our Options Opportunity Portfolio, which makes money when junk bonds…
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I doubled down on our USO June $35 puts on Tuesday afternoon and listened to your posting yesterday and sold 1/2 midday and the rest I sold (luckily) at the top of the market yesterday with the last 1/4 of my contracts at 100% return in less than one day!

- Samlawyer


Phil, 3 for 3! Sold on initial excitement and made a double on USO, 70% on AMZN and 70% on SPY options from Friday. Thanks and much appreciated for the suggestions.

- Gingbaum


Phil/ et al- Thanks for the answers to my spread questions last night, as I really needed that little piece of knowledge to crystallize my understanding of spreads. Your help is much appreciated and I have been doing really well for the last couple of months with fewer and fewer missteps as I embrace the PSW ways and watching my portfolios grow.

- Craigsa620


PSW AC Conf: For those who may be on the bubble, I attended my first PSW LV in November. It was a real eye-opener. What I accomplished in a couple of days of exposure to Phil, Pharm, Craig, et al made my previous couple of years of hanging around the web site seem silly. If you are inclined in the slightest, you really should go. Just rubbing shoulders with other PSW members proved to be really valuable. Strictly on the basis of value, it's a great deal. You will have real time conversations with Phil and the gang and they will get to your questions and agenda items.

- Mjjwo9b


Phil, I have to hand it to you. It seemed that you were the only person on the planet that thought stocks falling was still possible. I am glad I listened. About the end of the year I was really beginning to second guess though. Thanks for suggesting taking some profits last Nov. It no longer looks like I missed much.

- rj_jarboe


Thanks for the oil tip Phil: Bot & sold the USO May 29 calls for net $125. Not bad for few minutes work.

- JWick1981


PHIL: The most important lesson I have learned is how to hedge using SQQQ, SDS and TZA. A big thanks.

- IHS4God


Gel1…..I've been here 6 months, mostly watching and learning. Lots of smart people on the site and I've learned a lot from Phil and many others. //// Inflan - I have to trump your sentiments regarding the wisdom of the board. I have to thank Phil and the many contruibutors for a 80% profit for 2009. I have learned a lot and am still learning ( even occasionally about political issues - ha! )

- Iflantheman & Gel1


USO, QQQ- Phil, thanks for these plays. Out of USO for about 65% gain today and just keeping 1/4 QQQ.

- Ksone88


Thanks to your teaching and guidance, I was able to make a killing on my /TF shorts. I averaged into 12 shorts at 1252 and got out of 6 at 1242 and 6 more at 1235. Last week I did the same with /CL, though I got out too early and left $2 on the table. Thank you!

- Japarikh


Phil - Rode the /QM down from 99.65 at 7pm and now I'm taking your advice, taking the $$ and going to enjoy a restful night sleep. I don't post often so I want to say thanks for sharing your incredible market acumen with all of us. Your site has a unusually talented group of investors (and some characters) and I enjoy my days trading more because of it.

- DaveW


Thx Phil. Lightly moving in the bullish direction. Took PFE for $14.35 and sold the Jan 11 C/P for $2.85 giving me a net entry below Mar 09 low. And I bought back those calls on BTU and JPM I asked about the other day and am leaving them uncovered for now, so feeling better. Still just learning the rhythm. In the three months I have been using your system, my little portfolio is up 9.9%, so not only am I learning, but I am APPLYING that knowledge, and it's paying off. Thanks.

- Hoss


I have been here for 8 yrs, and find it the best service out there. There are more eyes on the market in this forum than anywhere, and opinions abound. So, relax, and let the group help you out.

- Pharmboy


Phil- I would like to echo the sentiments of dclark41. Joining this site was the best thing I have ever done to aid my growth as a trader/investor. There are so many smart and experienced people here sharing their ideas that regardless what your investing style is you will learn something daily. Thank you and all the regular contributors for your generosity.

- Acd54


AMZN ... thanks Phil; boy did they run a squeeze on everyone there ... made me sweat ... scaling helped! I think AMZN has an 85 handle tomorrow ... maybe lower.

- Cap


GOOG, NFLX and AAPL all bought last hour Friday. Sold into the excitement the first hour today for an average of 15% on the options. And lots of them. Thanks again Phil for teaching me so well.

- lflantheman


Maya, After years of being pretty good at picking stocks I still managed to lose almost as much as I made.All the reading Phil asked us to do as a new member (And everything else I can get my hands on lately) has revealed my Achilles Heal.Good stock picks do not necessarily make money. My problem was swinging for the fences. Since becoming a member Jan 1 this year and getting into to scaling into small trades I am amazed at the steady profit growth I have experienced already while not worrying about getting killed. And having fun doing it.. Phil, Thanks for the education, the help you give and the chance to learn more and get better. Also thanks to all the members who have answered the few questions I had when your not around.

- Ricpar


Phil, thanks for the call on the SKF puts earlier, I'm riding that horsie downhill right now, giddyup!

- MrMocha


CZR – well that was fun! Opened the play yesterday. As the arb premium was now almost all gone from the box spread today, I just decided to close it. The rundown, after all commissions: my net was $183.51 profit for an overnight trade tying up $2000 margin in an IRA account. That's a 9% overnight return (3200% annualized!) …And all that learning, too! Thanks PSW!

- Scottmi


Praising PSW for enlightenment is a bit akin to praising the Pope for being holy. I've been reading PSW for about two months now and have learned more about investing technique and the world in general than I've learned from the books and seminars I've paid for. Thanks for the enlightenment, the education, the guidance and the truth, which is not a commodity these days, but a virtue in short supply.

- Andy Morris


Took profit on QQQ 57 Puts, bot 40 at $0.07, sold 20 for $0.15 and 20 for $0.32. Thank, Phil

- Bobhu


Phil… My portfolio, in the past few months, has acheived a high degree of stabilization. I've noticed that on up days, down days, even days, it doesn't matter, my portfolio rarely varies more than 2%. And over the long haul it just slowly increases in value. I attribute this not to investment choices, but to style. Thanks to you and others on this site I'm paying close attention to position size, delta neutrality, downside protection, and concentrating on selling premium rather than buying it. I've developed increasing patience, not having to trade daily, or even weekly. I'm concentrating on the finer points of trading, letting the profits come to me, rather than the other way around. I appreciate the help everyone here has given in getting me focused on this principle. I'm pumped!…in a calm sort of way.

- Iflantheman


I am struck by several things over the last few days. First is how level-headed we all are as Greece and China develop. Second is how very helpful it is to see the different trading styles we have, partly because of personal preference and partly because of different stages of development and education. It's very helpful. Well-done, Phil, to have developed this community.

- Snow


Don't expect to get rich quick here, but you can get easy 30 - 50 % per year, just by buying good stocks at discount (as we often discuss), selling monthly premiums of calls and puts.

- Tchayipov


What a quarter! (AAPL, etc.) "People react; PSW'ers anticipate." Thanks everyone for a vibrant board.

- Silentstorm


Nice call on the QQQ puts this morning Phil. I bought 10 at .13 this morning for fun day trade. Just closed at .95. Sweet hedge for the day!

- RevTodd64


Phil - I just referred 10 people. Last week was a 50% gainer for me. There are companies that want to sell mentoring service for thousands of dollars. This is far better of a deal with very good advice.

- Steve


Phil I have been applying your arsenal (matresses, Edz plays, Ugl verticals etc.) to my gold holdings . So a big thank you for "teaching me how to fish" rather than just giving me the fish...

- Magret


Phil - Another excellent teaching article - when you write like that it blows me away. Thank you! I had the ideas from earlier articles but what I didn't have was enough understanding. The familiarity of ideas through repetition, re-working, revision - over time - the variation, the pulling out of implications - it all contributes to understanding and mostly thats on the student - but a good teacher (worth their weight in gold) makes understanding a pleasure. I wanted to learn about trading options because it makes my brain feel better - fitter, healthier. Actually mostly it makes me happy to think about the trade and trading options. You are a good teacher and I know that or I wouldn't value the subscription the way I do. It pays for itself through the pleasure of understanding alone.

- Redfern1


I picked up one of your recommended Gold plays, the July ABX 30s and sold the Feb 35s, which are now mostly intrinsic value. Is it time to roll these to the March 37.50s, or should I wait this spike out?

- Bill Hoffman




What Lies Beneath

 

[Image from Pixabay]

What Lies Beneath

Courtesy of GEORGE MONBIOT

[Originally published (here) at The Guardian and cross-posted at George Monboit's website.]

It’s a simple choice: stop all fossil fuel prospecting, or break the Paris agreement on climate change.

Do they understand what they have signed? Plainly they do not. Governments like ours, now ratifying the Paris agreement on climate change, haven’t the faintest idea what it means. Either that, or they have no intention of honouring it.

For the first time, we can see the numbers on which the agreement depends, and their logic is inescapable. Governments can either meet their international commitments or allow the prospecting and development of new fossil fuel reserves. They cannot do both.

The Paris agreement, struck by 200 nations in December, pledged to hold “the increase in the global average temperature to well below 2°C above pre-industrial levels”, and aspired to limit it to 1.5°. So what does this mean? Thanks to a report by Oil Change International, we can now answer this question with a degree of precision.

Using the industry’s own figures, it shows that burning the oil, gas and coal in the fields and mines that are already either in production or being developed is likely to take the global temperature rise beyond 2°. And even if all coal mining were to be shut down today, the oil and gas lined up so far would take it past 1.5°. The notion that we can open any new reserves, whether by fracking for gas, drilling for oil or digging for coal, without scuppering the Paris commitments is simply untenable.

This is not an extreme precautionary case. Quite the opposite in fact: the report uses the hazard assessment adopted by the United Nations. This means a 66% chance of preventing 2° of global warming and a 50% chance of preventing 1.5° – an assumption of risk that in any other field would be regarded as reckless. Even so, to prevent the odds from becoming any worse than this, a 2° target means that we can use only around 85% of the fossil fuel that’s currently good to go, while a 1.5° target…
continue reading





Howard Marks: I’m Not Seeing Bubble Prices In Most Assets

By VW Staff. Originally published at ValueWalk.

Howard Marks

Image source: Bloomberg Video Screenshot

Howard Marks Bloomberg Most Influencial Interview – Podcast

 

Howard Marks: We’re Investing, but With Unusual Caution

Howard Marks, co-chairman at Oaktree Capital Group, discusses how clients are approaching the current market, investors continuing to act bullish, and fighting the idea of going to cash. He speaks with Bloomberg’s Erik Schatzker on “Bloomberg Markets” and also appears at the Bloomberg Markets Most Influential Summit in New York. (Source: Bloomberg)

Howard Marks: I’m Not Seeing Bubble Prices in Most Assets

Howard Marks, co-chairman at Oaktree Capital Group, discusses his investment strategy and the state of financial markets. He speaks with Bloomberg’s Erik Schatzker on “Bloomberg Markets” and also appears at the Bloomberg Markets Most Influential Summit in New York. (Source: Bloomberg)

Oaktree’s Howard Marks: We Are Not Market Timers

Howard Marks, co-chairman at Oaktree Capital Group, discusses the firm’s strategy for investing in bonds. He speaks with Bloomberg’s Erik Schatzker on “Bloomberg Markets” and also appears at the Bloomberg Markets Most Influential Summit in New York. (Source: Bloomberg)

Oaktree’s Howard Marks on His Approach to Investing

Howard Marks, co-chairman at Oaktree Capital Group, discusses his investment strategy and the state of financial markets. He speaks with Bloomberg’s Erik Schatzker on “Bloomberg Markets” and also appears at the Bloomberg Markets Most Influential Summit in New York. (Source: Bloomberg)

****





Window Dressing Wednesday – Quarterly Crash Ahead?

We're just waiting for the other shoe to drop.

Yellen testifies before Congress this morning (10) but while she's doing that, both Jay Powell and Jim Bullard will be speaking at a Conference of State Bank Supervisors and, in case that's not enough to whip the market up and down 100 points, we have Durable Goods at 8:30 and Oil Inventories at 10:30, a 7-Year Note Auction at 1pm and the Charlie Evans speaks at 1:30 followed by Loretta Mester at 4:30 and Esther George at 7:15.  I'm sure by then we'll have a very clear picture of what's going on {end sarcasm font}.  

Meanwhile, we were happy to hear yesterday that the Saxo Group has finally (9 months later) caught up to our Trade of the Year idea on Natural Gas (UNG), saying:

Natural gas is being supported by an eroding supply glut and a potential tightening in 2017. Our breakout model has given a buy signal in natural gas today on the continuation chart above $2.998/therm.

Isn't that nice?  I couldn't agree more, our target is $4 in Jan 2018 but, sadly, you missed the easy meal we made for you last December, when, after choosing /NG for our Members, I laid out our long case in the morning post on Dec 8th, while it was still below $2, saying:

Our UNG play is proprietary to our Options Opportunity players but I'm happy to help you play along with Carl and the way I would set up an LNG play is as follows:

  • Buy 10 2017 $30 calls for $14.60 ($14,600) 


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David Cay Johnston: The Making of Donald Trump

This video is very interesting; it's worth watching or listening to if you haven't already. 

David Cay Johnston: The Making of Donald Trump

Courtesy of Jesse's Cafe Americain 

“The narcissist devours people, consumes their output, and casts the empty, writhing shells aside.”

Sam Vaknin

I make it no secret that I find Hillary Clinton to be appallingly dishonest. The manner is which she secured the Democratic nomination is a signature of the Clinton style. The Clinton 'charitable foundation' is a beacon for everything that is wrong with the American economic and political system today.

But that does not mean that I am blind to what is being offered by The Donald.

I consider this upcoming national election to be the signal failure of the two party political system as it is today, choked by a self-referential elite, corrupted by a lust for power and big money.





Testy Tuesday – Trump Slumps, OPEC Dumps

What a crazy morning already!

As you can see, the S&P rocketed 20 points higher as Hillary put those Trump fears to rest during the debate last night and the markets had a huge relief rally but then, at the European open (3am), Deutsche Bank (DB) continued the 10% slide that was saved by the bell at yesterday's close and the EU markets followed down about 1% (so far).  No, in addition to DB having issues, Germany's 2nd largest bank, Commerzbank, announced it would lay off 18% of it's workforce (9,000 employees) in a massive restructuring.  Sure folks – everything is just fine – don't panic….

Already the market is lower than we were ahead of the Fed on Wednesday and it turns out I was a few day's early with my market prediction but, honestly, it wasn't hard to call as they've tried FREE MONEY for 8 years now and it hasn't worked yet and it won't work now because they are giving the money to the wrong people. 

As Hillary said last night, "trickle down economics has not worked in the past and it will not work in the future" THOSE are the failed policies of the past we can't afford to repeat.  If we want to turn the global economy around, we need to engage in some massive infrastructure projects that consumer materials and put people to work building things that last and have long-term beneficial effects on society like roads, bridges, aqueducts, electrical grids, forest reclamation, carbon reduction…  These are not whimsical things – these are all things we NEED and have been putting off.  

Rather than give another $6Tn to the Banksters to buy another 8 years of stagnation – why not give $6Tn to the people and see what they can do with it?  Instead, we are dooming the Bottom 90% to years of ZERO return on their meager savings, giving them no chance whatsoever of retiring in sound financial shape.  Even that isn't far enough and, as you can see on this chart, $7 TRILLION Dollars worth of debt (and that was Q1) is "paying" a NEGATIVE yield – we are punishing people for saving money –
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Zero Hedge

Final Q2 GDP Comes At 1.4%: US Set To Grow At Slowest Pace Since Financial Crisis

Courtesy of ZeroHedge. View original post here.

While the second quarter is now ancient history and the debate is how much the predicted rebound in Q3 GDP will fade into Q4 which is set to begin in just three days, moments ago the BEA released its final revision for Q2 GDP, according to which real GDP increased 1.4% in the second quarter of 2016, 0.3 % higher than the “second” estimate released in August, and fractionally higher than the 1.3% expected. In the first quarter, real GDP rose 0.8 percent.

...



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ValueWalk

Here's Why The Pundits Are Wrong About Warren Buffett

By VW Staff. Originally published at ValueWalk.

Here’s Why The Pundits Are Wrong About Warren Buffett via Roger Lowenstein, Fortune

]]> Get The Full Warren Buffett Series in PDF

Get the entire 10-part series on Warren Buffett in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues.

We respect your email privacy

It takes a lot of cherry-picking to make him look bad.

Norman Pearlstine, the vice chairman and longtime editorial soul of Time Inc., which publishes Fortune, once said that every feature story fit into one of three archetypes: &...



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Phil's Favorites

India Raids Pakistan, Claims "Significant Casualties" Inflicted: Don't Worry It's Just a "Surgical Strike"

Courtesy of Mish.

Border skirmishes between India and Pakistan have been going on for years. But with social mood darkening everywhere, and with India making the claim ‘Significant casualties’ inflicted on ‘launch pads’ for militant attacks, one can’t help but wonder when this erupts in a major way.

The Financial Times reports India launches ‘surgical strikes’ on Pakistan terror targets.

India said it had carried out “surgical strikes” overnight across its disputed border with Pakistan to target groups of militants that were allegedly planning to carry out terror attacks on Indian territory.

...

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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

Just as it's been announced, US oil producers may readying to thwart OPEC's plan (Business Insider Australia)

While the specifics over how it will be achieved are as yet unknown, and there are already signs that some members are uncomfortable with the decision, it appears that OPEC will reduce oil output for the first time in eight years when the grou...



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Mapping The Market

The Industry That Was Crushed By The Obama Administration

By Jean-Luc

Good riddance – cleaned up a lot of frauds there:

The Industry That Was Crushed By The Obama Administration

In early 2009, the seven largest publicly traded college operators were worth a combined $51 billion. Today, they’ve been all but wiped out.

When Barack Obama took office, America’s seven largest publicly traded college operators were worth a combined $51 billion, with more than 815,000 students enrolled at campuses spread across the country. The schools were flooded with with people seeking shelter from the recession, returning to school to pick up new skills.

Almost eight years later, the industry has been decimated. The seven largest listed operators are worth just over $6 billion, and the most valuable co...



more from M.T.M.

Kimble Charting Solutions

Japanese YEN testing triple breakout level

Courtesy of Chris Kimble.

Below looks at the Japanese Yen over the past 20-years.

For the majority of the time, the YEN has remained inside of rising channel (A). Now a big test is in play, after breaking support.

CLICK ON CHART TO ENLARGE

The Yen remained inside rising channel (A) from the mid 1990’s until 2014, where it broke below rising support. The rally that has taken place since the lows ...



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Chart School

RTT browsing latest..

Courtesy of Read the Ticker.

Please review a collection of WWW browsing results.



Date Found: Saturday, 26 March 2016, 02:36:15 PM

Click for popup. Clear your browser cache if image is not showing.
Comment: ZH: Its a BULLARD market, the FED jaw boning is keeping the market up!



Date Found: Sunday, 27 March 2016, 02:31:30 PM

Click for popup. Clear your browser cache if image is not showing.
Comment: RTT: World trade near 2008/09 lows. SP500 near all time highs. PLACE YOUR BETS! Roll up! Roll up!



Date Found: Tuesday, 29 March 2016, 02:42:11 PM

Click for popup. Clear your browser cach...



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OpTrader

Swing trading portfolio - week of September 26th, 2016

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Members' Corner

Market Liquidity and Macroeconomic Bullshit

 

Market Liquidity and Macroeconomic Bullshit

Courtesy of The Nattering Naybob

STJL - "Apparently macroeconomics is all bullshit – ROFL! Paging Naybob now… Famous Economist Paul Romer Says Macroeconomics Is All Bullshit."

The Nattering One muses... Macroeconomics as practiced by academics and those in charge is pure voodoo. Better to chant over goat blood, bird feathers and scattered entrails...

As for reality, overnight CNH HIBOR (...



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Digital Currencies

Gold, Silver and Blockchain - Fintech Solutions To Negative Rates, Bail-ins, Currency Debasement and Cashless

Courtesy of ZeroHedge. View original post here.

By Jan Skoyles

I was so pleased yesterday by the announcement that I have joined the Research team at GoldCore as it meant that I could finally start talking about it and was back in a role that lets me indulge in my passion by researching and geeking out on all things gold, silver and money.

...



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Biotech

Epizyme - A Waiting Game

Reminder: Pharmboy is available to chat with Members, comments are found below each post.

Epizyme was founded in 2007, and trying to create drugs to treat patient's cancer by focusing on genetically-linked differences between normal and cancer cells. Cancer areas of focus include leukemia, Non-Hodgkin's lymphoma and breast cancer.  One of the Epizme cofounders, H. Robert Horvitz, won the Nobel Prize in Medicine in 2002 for "discoveries concerning genetic regulation of organ development and programmed cell death."

Before discussing the drug targets of Epizyme, understanding epigenetics is crucial to comprehend the company's goals.  

Genetic components are the DNA sequences that are 'inherited.'  Some of these genes are stronger than others in their expression (e.g., eye color).  Yet, some genes turn on or off due to external factors (environmental), and it is und...



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All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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Promotions

PSW is more than just stock talk!

 

We know you love coming here for our Stocks & Options education, strategy and trade ideas, and for Phil's daily commentary which you can't live without, but there's more!

PhilStockWorld.com features the most important and most interesting news items from around the web, all day, every day!

News: If you missed it, you can probably find it in our Market News section. We sift through piles of news so you don't have to.   

If you are looking for non-mainstream, provocatively-narrated news and opinion pieces which promise to make you think -- we feature Zero Hedge, ...



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FeedTheBull - Top Stock market and Finance Sites



About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

Learn more About Phil >>


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About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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