Phil - I celebrate today, having reached my goal for the year, trading in sync with your education and guidance, of 1 million in profit. I learned a lot, achieved much, and am profoundly grateful. To be honest, when I set the goal I thought it was daunting, as I have for many years been an investor in equities but did very little with options. Learning and doing has for me been a blast!
I reached my goal by following Phil's strategies - lots of Buy/Writes, covered calls on equities , naked put entries for income production. I did it with 2.5 mil and kept 600,000 in cash in case I got in trouble. I concentrated on stocks (many of my own choosing) that had decent dividends and wrote front month calls against (OTM) which has worked well in this market run. 25% of my gain is in dividends and premium selling, with the balance in appreciation.
As a fellow "low-end" investor I like Phil's Buy/Write strategy on solid stocks. Before I came here I loved to try to "figure things out" with very little success "TRYING TO FIGURE THINGS OUT"! I traded too much and fell in love with stocks that "should have done" what they didn't do. Now a majority of my accounts are in Buy/Writes suggested here or cash (waiting for a better time for more Buy/Writes). I use 15-20% of my total holding to short term trade and hedge. This is manageable with my full time job as a business owner. I have found Phil's system a more discipline way to achieve the returns I want without relying on my ability (more like inability to "figure things out").
Phil, I have the SRS 2011 $7.50 short puts you recommended awhile back. I sold them for $2.20 and now $1.51 (up 31%) although SRS has been down since inception. This was a nice mellow way to play it like you said, thanks.
On Optrader's section yesterday he was asked how he works with AAPL as an investment. He replied that he just ‘plays with the covers'. I've got a separate portfolio where I use primarily this technique over the past 6 months. Up 60% The principles involved are stock selection, patience, patience, using covers to protect profits, rolling covers to maximize premium return, and exiting when covers are gone and stock price is high. Sometimes it's hard to remember where you learn to do this stuff, but much of it is from integrating principles I've learned here with thing I already knew. Thanks for the help on this, Phil and others.
Phil: Once again thanks for those inciteful comments, and the old links to Sage's portfolio management (I hadn't read before). I'm an experienced stock trader, but over the last 3 or 4 months have come to appreciate options trading here at PSW, and the consistency of your many premium-selling strategies. It is liberating to have to worry less about getting direction right and being able to generate 5% MONTHLY returns with close to delta-neutral positioning. Much appreciated!
Have not done my 10,000 hours, but a couple of years at PSW, and moved from fishing with a single line to owner of a commercial trawler (metaphorically speaking). Now I fish with many lines. It is amazing when you go over the same information time and time again, eventually it clicks. Like planting trees; being the house, 20% sale items, selling into the excitement. and patience. I just sold an AAPL Jan 12 340/390 BCS financed by the sales of Jan 12 275 Put. The trade was put on one year ago for a net credit and exited five minutes ago for a 49 dollar per contract profit. No point in waiting till opex to see what happens, and I will just sell 10 of those VLO puts to make myself net the round 50.
I no longer worry about opex coming as I have adjusted well in time for most positions that go against me. I still make some howlers (RIMM, TBT, TRGT) but I play the percentages and my winners outdistance my losers by many miles.
I would never be in this position if it were not for Phil. He is a treasure, pure and simple. The goose that lays the golden egg if we care to listen and practice. Phil, a mighty big thank you.
I am a Registered Nurse, so is my wife. We work hard to take care of seven kids that are the joy of our lives. The cost for a basic membership is ALOT from our our monthly budget of spending and saving…but well worth it! Phil has allowed me to really ramp up the savings we put away for our children's college funds and our retirement.
Hey Phil, Your HOV suggestion about 3 months ago basically paid for my Philstockworld subscription for years to come. My average cost is about $1.
10/15/2014: Phil…..been travelling more than not but reading and watching you guys every night. This is to say a big thank you. Even though I don't have the time to trade every day now I set up hedges and base long term strategy on PSW. I now it may sound like BS to some readers but my 401k is down a mere 3%. It hardly gets my attention when I open my brokerage portfolio accounts. And that is by using your longer term hedges and strategies. I don't need to be a day trader to take advantage of PSW. At this time in my life when I cant trade every day……. not losing what we've gained moves front and center. It's just a great feeling to watch your brokerage account hold steady in a sea of red. Thanks Teacher.
Thanks Phil, I have adjusted my position by getting rid of the IYF puts, and selling the FAZ puts. You have so many of these awesome little tricks in your playbook that it really amazes me. I toally love your analogy by the way: Do you want insurance that you have to pay for, or do you want insurance that pays you?
New members – a word of advice: you should check out the track record of Phil's last few trades of the year, and what the return would be if you just rolled all the gains into the next years trade of the year. Remember – trade of the year is one he's virtually sure of, and he rarely misses on those
Happy Thanksgiving Phil and to your family and associates. Also to all of the other fellow citizens of Phil's Stock World. I am particularly happy and thankful that I clicked on your article in Seeking Alpha a number of years ago. That opened the gate to Phil's Stock World and "being the house". My wallet thanks you as does my peace of mind in trading options, stocks and rarely futures. Your liberal views opened up my views—being a boot strapper (pulled myself out of a poor background) I was a CONSERVATIVE—cynical of others who weren't as driven. Now, I am much less so; you have taught me more than how to make money and manage risk. So, again I give thanks to you and the others of PSW!!
Phil, I'm up 34x what I paid in fees for your service, and that only counts the trades I didn't think of myself. Thanks!
WOW!!!!!!!!!!!! How will I ever do anything else in my life that will compare to the wild ride you get trading an ultra etf in the most volatile sector in the stock market the day before option expiration?
The best play I made this year was PSW. Will renew my membership tonight. Looking for the same trading profit percentages next year, but will have an advantage from the compounding, and much better skills acquired from you and the many skilled PSW co-pilots. Thanks!
I took $2 (up 133%) and ran on those USO puts, quite a bit more than the 20 you played in the $25KP. Thank you once again for turning a bad market week into a great personal week. You will be happy to know I am back to cashy and cautious with a few of your favorite longs into the weekend. Thanks to Phil, JRW and all the members who share their knowledge here.
Phil I must say that it was really nice to have a portfolio that was looking very stable in the face of a rough day for the markets. I ended the day up 0.3% which includes another successful day of futures trading. So with a portfolio of mostly cash, a few of our faves like Apple and LL, JO, TOL, DIS, etc., along with a couple of hedges that paid off nicely today, and my futures trades, I never had to break a sweat during that madhouse today. Yes, by George (or Phil), I may be learning this system!
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.
I'm just starting my second year as a member, and I'd like to thank all of you for sharing your trading ideas and insight, and especially Phil of course for great all-around investing advice as well as trades! In addition to learning patience and profit-taking, I think one of the most important things I'm learning here is to stick to stocks and trades that suit my temperament. And wow, I had NO idea how hard it was to learn patience. I should say "practice" instead of "learn", because it seems to be a constant struggle. Phil, please keep reminding us how nice CASH is!
Took profit on QQQ 57 Puts, bot 40 at $0.07, sold 20 for $0.15 and 20 for $0.32. Thank, Phil
Nice intraday trading calls this week Phil. You have me hooked on trading SPY options analogously to your DIA moves. I paid some tuition the last few weeks but I think I have the hang of it. Don't be greedy and be happy with 0.05 to 0.10 and sometimes you're lucky with much bigger moves. Thanks for the training!
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
Thanks for the oil tip Phil: Bot & sold the USO May 29 calls for net $125. Not bad for few minutes work.
I've recently done exactly what Phil described. I upgraded my ability to trade the IRA acct. by transferring acct. from TDA to TOS. TDA would not allow spreads; TOS does. Neither will allow naked options. With spreads I am able to buy calls or puts several months out then sell front month calls or puts over and over. This allows me to collect premium, which is, of course, the goal. This wasn't an original idea. Phil put me onto it. Since the transfer I've substantially increased my performance in the IRA!
Phil – In the event of a mkt meltdown, which of the indices, in your opinion do you think has the most potential for % move down. I'm looking at call options on SDS and the DXD. Any thoughts? Ideas?
Thanks .. and thanks for being a great teacher! I've learned so much in only a month!
Thanks to Phil (again) for the lessons on the art of the roll, selling premium and hanging tight under fire (particularly in the first hour of trading-MADNESS). Watching you manage the $25KP has really helped my trading in a big way.
I have been with this site since the beginning and i have learned more the past 3 years than the previous 10. Information and great commentary are abound. The traders on the site are second to none and my portfolio has benefited greatly.
Phil has some great insight into the market. He's given me a different perspective on the market and I know I'm a better trader/investor because of it.
I've been trading options since the late 80's and Phil is right. Unless you know what is going to happen (how can you, unless you have insider information), then do what the smart money does - be the house. Remember guys, we're allowed to sell options. If you're afraid to be short, then do a spread to limit your liability. When I think about the money I've made and lost on options, a good approximation is that I win 30% of the time when I do a straight buy; I win about 70% of the time when I do a spread; I win nearly 90% of the time when I sell naked.
Killed it tonight trading copper. Anyone who jumped in right after election is up about 75k on one contract!
Phil/BCS - Didn't realise they traded here. Should've known really. Thanks for the tip. managed to pick some up just before the close at a 15% discount to the UK closing price.
The Wall Street Journal“UBS to Pay $19 Billion As Auction Mess Hits Wall Street” reports on state attorneys general entering into settlements with banks on auction rate securities (ARS). UBS (UBS), Merrill Lynch (MER) and Citigroup (C) have agreed to buyback more than $36B as well as pay fines. The process will start with individuals and charities in October and institutional clients in mid 2010. Over 100K individuals were included in the more than $330B sold.
The basis of the complaint is that investors were misled about the safety and liquidity of ARS. While the market was drying up, the banks temporarily stepped in to support the auctions. This gave the illusion of liquidity as the bank tried to unload their inventory through their retail channels. Commissions for the product were increased at many firms, and a Merrill Lynch analyst’s dire warning was enhanced to say only ARS offered “higher returns in exchange for less liquidity.” Apparently, even this subtle warning was buried so deep in Frances Constable’s report that no one found it. Merrill Lynch even categorized ARS as “other cash” on clients’ brokerage statements.
Sure the banks consciously tried to hide the liquidity risks, and the reduced monoline ratings accentuated the problems. But, investors should have understood the maturity of the bonds they purchased, and the market for trading them. Retail investors, charities, and small and medium sized business are very lucky to be bailed out. It is difficult to know how large businesses will fare. Those being helped should keep in mind that the only reason they are being helped is the desecration the ARS caused public finance. The attorneys general had little sympathy for investors.
This scandal reminds me of the analysts’ scandal emanating from…
This is a disturbing analysis of Stalin’s "repression and elimination of massive numbers of ordinary citizens," that I read while looking for interesting subjects. It may be peripherally related to other weekend topics in the sense that gaining support and silencing others can be accomplished by means other than killing dissenters, such as lies and fear tactics. Courtesy of Mark Thoma, Economist’s View.
Were Stalin’s mass killings a "rational" attempt to avoid losing power in a revolution rather than the acts of a deranged dictator?:
The dictator’s approach to electoral patterns, by Konstantin Sonin, Vox EU: While the people of the developed world are fascinated by electoral campaigns, more than a half of the world’s population does not have a chance to participate in elections. Yet any dictator needs some popular support; the difference is that he can trim his constituency, eliminating those who do not support him.
For democratic politics, Glaeser and Shleifer (2005) described how politicians use policy leverage to force some social groups out of their districts. In non-democracies, examples abound. Fidel Castro in Cuba and Robert Mugabe in Zimbabwe pushed thousands of “undesirables” into emigration, increasing the share of supporters among those who remained. “Ethnic cleansing”, as ugly as ubiquitous a means of boosting support for the government in times of war, is another example of trimming the constituency. Dictators in the former Soviet Union countries such as Alexander Lukashenko of Belarus or Islom Karimov of Uzbekistan rely upon open borders to force out those who disagree with their leadership. In totalitarian countries, the dictator can – in extreme cases – physically eliminate those who would not have voted for him in open elections.
One approach to understand the structure of dictatorial behaviour is to study the strategy of the most famous of them, Joseph Stalin of Soviet Russia. Twentieth century dictators, from communist leaders to Saddam Hussein, have claimed to be his disciples in the science of power.
Stalin’s mass terror campaigns
Stalin’s killing and imprisonment of millions of Soviet citizens are cited as irrational acts attributed by psychiatrists to paranoia or worse mental illness (Rancour-Lafferiere, 2004), to his violent Caucasus upbringing (Baberowski, 2005), or to other idiosyncratic factors that render the deaths of millions a "historical accident." If dictatorial behaviour, such as this, is the consequence of personality quirks, historical accidents, or mental illness, further economic investigation
Excerpt: "In a special section marking the anniversary of the credit crunch, we start with the Federal Reserve. Its creative response to the crisis may have staved off catastrophe, but may also have put its independence at risk
WHEN he was still in academia, Ben Bernanke once argued that Franklin Roosevelt’s greatest contribution to ending the Great Depression was not a specific policy, but his “willingness to be aggressive and to experiment…to do whatever it took to get the country moving again.” That would fairly describe how Mr Bernanke has battled perhaps the biggest financial crisis since FDR’s time, which erupted one year ago this week.
The chairman of the Federal Reserve has cast aside any notion that central bankers should be boring. He has slashed interest rates; rolled out a dizzying array of new lending programmes; backed the debt of Bear Stearns, a failing investment bank; agreed to lend to Fannie Mae and Freddie Mac, America’s troubled, quasi-private mortgage agencies; argued for fiscal stimulus and mortgage write-downs; and proposed an expansion of the Fed’s regulatory domain.
The Fed did not seek its bigger role, but acted because no one else could. Mr Bernanke is now consumed with responsibilities he never imagined when he became chairman in early 2006. Since the crisis broke, he has been at his desk seven days a week, fuelled by cans of Diet Dr Pepper from a small refrigerator in his office. Even if his aggression and experimentation do not prevent a recession, they have softened the impact of falling house prices, rising default rates and the credit squeeze on America’s economy. But they have also created new political risks for the Fed.
The central bank is lending to private companies on an unprecedented scale and is thus making decisions it long sought to avoid about the allocation of credit. It is also acquiring new powers of oversight. Politicians could chafe at the Fed’s power: why, they might ask, should unelected officials choose who benefits from taxpayers’ money? And they might press the central bank to pursue political ends—such as propping up favoured borrowers—that interfere with monetary policy.
Events beyond the Fed’s control magnify these risks. Unemployment and inflation are likely to remain uncomfortably high for the next…
I have a lot of catching up to do so this may get long…
First off, we have a fantastic graphic from a site Barry Ritholtz found called Oil Change USA, which tracks the dirty dealing of the energy industry. It's not very surprising to see who's in the center of the campaign money train this year – Mr. DRILLDRILLDRILL himself, Johnny McSame, who's already gotten $971,418 in direct contributions and we haven't even had the convention yet – that's astounding!
I don't know if the copy of the image will work but if you go to the web-site, you can mouse over each barrel of oil and see where the money is oozing in from. Note that these figures do NOT include the money funneled into McCain, the Senator or from "Leadership PACs" as that's a whole separate barrel of slime…
Of course the oil companies have no actual principles and they are hedging their bets and Barack got $345K for his campaign but no money at all from PACs, who tend to expect direct favors for their money so they gravitate towards the most pliable candidates. Also great on the site is the "Vote Tracker" which show's you just what an oil company can buy when it spends it's money wisely like the perfect voting records on oil legistlation of Robert Bennett (R – UT), Michael Crapo (R – ID), Dick Shelby (R – AL, was a Democrat until the Republicans gained a majority in 1994, then switched so you know he's got real principles!), Ted Stevens (R – AK, indicted), John Cronyn (R – TX), David Vitter (R – LA), James Inhofe (R – OK), Trent Lott (R – MS, brother in-law indicted – he resigned), Elizabeth Dole (R – NC), Mitch McConnell (R – KY), Lisa Murkowski (R – AL), John Isakson (R – GA), C. Saxby Chambliss (R – GA) (that's 2 from GA so guess who's getting offshore drilling for XMas!), Jim DeMint (R – SC), George Voinvich (R – OH), Jefferson Sessions (R – AL), Wayne Allard (R – CO), Orin Hatch (R – UT), Pat Roberts (R – KS), Christopher Bond (R – MO), Larry Craig (R – ID), Jim Bunning (R – KY), Thad Cochran (R – MS), Charles…
The amount of water on this planet hasn’t really changed in the last million years. However, today there are over six billion humans drinking and bathing in the stuff. And while the world’s population has doubled in the last 60 years, water consumption has more than tripled over the same time period.
And supplies are starting to get tight.
Less than 2% of the world’s water supplies is fresh. Even less is easily accessible. According to the Financial Times, about a quarter of the world’s population already lives in an area of physical water shortage— a place where water simply doesn’t exist in abundance. An additional billion people live in areas of economic water shortage— areas where water exists but there is not the necessary infrastructure to extract and distribute it.
This issue affects the whole world, not just developing countries.
At Goldman Sach’s “Top Five Risks” conference earlier in June, the investment bank announced that water was the “petroleum for the next century.” According to the presentations at the conference, the US alone needs to invest over $1 trillion in new piping and waste water plants in the next 12 years alone.
Legal skirmishes over water rights are already showing up in the headlines. However, currently they are more about making money than survival.
BusinessWeek recently ran a cover story on billionaire T. Boone Pickens’ efforts to acquire water rights from Texas landowners in order to transport the stuff to Dallas and other thirsty, fast-growing Texas cities. Similar issues are showing up in Egypt where the government has threatened military attack against any country that draws water from the Nile without a contract.
However, the area where water shortages are most acute is China.
China comprises 21% of the world’s population, but controls only 7% its water supply. And its rapidly expanding population is requiring larger and larger food supplies as consumers adopt a more western, protein heavy diet.
It takes 1.5 cubic meters of water to produce 1 kg of corn. In contrast it takes six cubic meters to produce a 1 kg of poultry and 15 cubic meters to produce a 1 kg of beef. And Chinese meat consumption…
Americans need to face the sobering reality that the country’s infrastructure is in trouble. Most of it was built in the 20th century, during the greatest age of construction the world has seen. The continent was wired for electricity and phone service, and colossal projects, including the Hoover Dam, the Golden Gate Bridge and the interstate highway system, were completed—along with thousands of smaller bridges, water tunnels and more. We are living off an inheritance of steel-and-concrete wonders, grander than anything built by Rome, constructed by everyday giants bearing trowels, welding torches and rivet guns.
To fix our infrastructure, from dilapidated levees to congested roadways and ports, the American Society of Civil Engineers (ASCE) has estimated that the country needs to spend $1.6 trillion over five years. Only $1 trillion of that, the organization says, has been allocated or promised. Accepting those numbers, we need an additional $600 billion to reverse the slide of infrastructure, a figure that seems as difficult to produce as it is to comprehend.
Or is it? Spread over five years, ASCE is calling for $120 billion per year. The economic stimulus package signed into law in February is sending $168 billion out to individuals to spend, in a best-case scenario, on new TVs and restaurant meals. That money could have bought a lot of concrete. While more funds are needed, how they’re spent is equally important. New information technology, fresh engineering and advanced materials can help us not just restore, but improve our infrastructure in the coming century. Planned and managed properly, next-gen projects can be smarter and more resilient than what came before. Engineers and construction workers know how to get the job done. But first, we must gather the national will.
The article below compares the average behavior of the stock market over the typcial presidential term to the current cycle. Generally, this Y4 is unusually weak, we should be seeing moderate gains. Courtesy of Steve LeCompte of the CXO Advisory Group LLC.
Taking the same approach as used for the calendar year at Trading Calendar, what is the typical cumulative return profile for the U.S. stock market over the four-year presidential term? Using monthly closing levels of the S&P 500 index from December 1951 through July 2008 (13+ presidential terms), we find that:
The following chart plots the average cumulative return of the S&P 500 index across the four years of the presidential term (Y1-Y4) for the entire sample period based on monthly data (M12=December). The return profile indicates that all of Y1 and most of Y2 are approximately flat. Strong gains follow from late in Y2 to two-thirds through Y3. Moderate gains ensue through the end of the term.
For comparison, the chart includes a plot of the cumulative return of the S&P 500 index for the 2005-2008 presidential term through July 2008. This current term is roughly typical until Y4.
Is the average behavior persistent over time?
One way to test persistence of a pattern is to break the sample into subsamples to see whether the subsamples are consistent. The next chart shows the average cumulative return of the S&P 500 index across the four years of the presidential term for two subsamples of approximately equal duration (about seven terms each), 1953-1980 and 1981-2008, again based on monthly data. The shapes of the two profiles appear similar enough to warrant a cautious belief in some persistence.
In summary, there is some evidence to support a belief in three phases of the U.S. stock market across the typical presidential term: (1) flat at the beginning; (2) strongly advancing in middle; and, (3) moderately advancing at the end. However, the data span a small sample of presidential terms, so confidence in this view is low.
We noted the other day that, while this was a "nice" recovery from our perspective, it was a spectacular recovery from an international perspective as the rising dollar coinciding with rising US equities gives our markets a very nice, booming V bottom from our July 15th low. The S&P priced in Euros is up 15% from the bottom in less than a month yet remains 25% off it's highs of last May, where the market peaked on a currency-adjusted basis (see lower, weekly chart).
It's good to review my Weekly Wrap-Up of July 13th, where I did, in fact call the bottom and gave an extensive overview of my reasons for doing so. At the time I said (as we had moved to 70% invested, trying to pick a bottom): "I wish there were a more painless way to pick a bottom but the only way to get ahead of the curve is to take a little damage at the bottom. We need to be very realistic about what happens next week and fall back to a more conservative strategy if we break below 11,000 but I’m really hoping something comes out by pre-market Monday to let us put the GSE issue behind us so we can get back to focusing on a very busy earnings week."
As I had said that weekend, just because you call a bottom doesn't mean you get it and that Monday we discussed the manic-depressive nature of the markets as we were cynical of the sudden recovery, even though we were playing for it. That morning I said "Here’s my problem – I’m a fundamentalist, so I believe a company has value and an economy will do X and not Y and I don’t believe that changes from day to day to any great degree. Our basic investing strategy is that, when we see a stock deviating from our percieved "value" of a company and we feel the risk/reward is justified over the time frame – we buy some options looking for a return to the norms. So it disturbs me when, for example, a massive financial institution like FRE or FNM can, through the wisdom of Wall Street and the "efficient market," lose 1/2 it’s value at 9:30 and then get it all back at the end of the day. …
Jonathan Burton for MarketWatch recently posted a feature about the 4 most dangerous words in the vernacular of investing. Specifically… "This time it’s different."
As Burton explains it, the late 90s/early 2000s tech bubble is a prime example. Stock market valuations no longer mattered… it was a new era of dot-com excitement and endless possibility. Of course, it wasn’t a new era and the stock market suffered one of the worst bears in its history from 2000-2002.
Real estate’s collapse is another. "This time it’s different" led to the perfect storm of imprudent lending standards, get-rich quick home flipping and faulty declarations of ever-increasing demand amid limited supply. It wasn’t a new era for real estate either… as the 2007-2009 real estate crash continues.
Some say that energy and commodities may be the next to falter… if they haven’t already; that is, you’ve got alarmist projections about demand for all commodities far outstripping supply, crippling consuming nations and causing greater geopolitical tensions. It’s not that commodities haven’t been hot, but "this time it’s different" has led some to over-allocate to energy/resources at a time when demand could possibly slow.
Yet "this time it’s different" thinking can be harmful in a different sense. Just as extreme optimism leads to an inability to see impending doom, extreme pessimism is going to keep investors from making wise purchasing decisions for long-term wealth.
If you read the mainstream media with any degree of regularity, you can’t help but feel that the U.S. economy is lost forever. Our dollar is on its way to being worthless. Our system of credit will never operate smoothly again. And Wall Street will be mired in a bearish grip for many years to come.
Why? Because this time it’s different. Recovery for the investment markets? Impossible… because this time it’s different.
History shows that the mid-point of a recession typically marks a stock market bottom. In other words, new bull markets begin when things couldn’t possibly seem any worse. Just as they did in October 2002… or March 2003… depending on who’s calculating.
The euro slumped to a five-month low against the dollar as traders pared bets that the European Central Bank will raise interest rates due to a slowing economy.
The euro also fell to a three-week low versus Japan’s currency after ECB President Jean-Claude Trichet said economic growth will be "particularly weak" through the third quarter. The dollar headed for its biggest weekly gain against the yen in almost two months as oil dropped 18 percent from a record. The Australian dollar declined for a ninth day, the longest stretch since 1980, as futures show the central bank will cut borrowing costs this year.
"Trichet triggered the euro’s decline when he went out of his way to highlight weakness in the economy," said Saburo Matsumoto, senior manager of foreign-exchange sales at Sumitomo Trust & Banking Co. in Tokyo. "A rate increase is off the cards for the time being, and the euro is likely to adjust lower."
Trichet said yesterday he has "no bias" or "pre-commitment" toward future rate movements after the central bank left the main refinancing rate at 4.25 percent. He told reporters at a press conference in Frankfurt that while inflation remains a threat, risks to economic growth are "materializing."
Risks To Growth Are Obvious
Risks to growth have been materializing for so long now that they should have long ago been obvious to everyone. In the US, "Talk Of Rate Hikes Is Comical".
With Trichet signaling he is done hiking, a signal that was not expected, there is now room for the US dollar to rally. With that in mind, let’s take a look at a few charts.
$USD – US$ Index Daily
Click on chart for sharper image
On the daily chart the US$ crossed resistance and sitting right on the 200 day exponential moving average. It has not closed above the 200 EMA since March of 2006.
Given his cabinet picks so far, it’s reasonable to assume that The Donald finds hanging out with anyone who isn’t a billionaire (or at least a multimillionaire) a drag. What would there be to talk about if you left the Machiavellian class and its exploits for the company of the sort of normal folk you can rouse at a rally? It’s been a month since the election and here’s what’s clear: crony capitalism, the kind that festers and grows when offered public support in its search for private profits, is th...
Below looks at the patterns on the S&P 500 and the Yield on the 10-year note (Inverted to look like bond prices), since the late 1980’s. A rare test of support and resistance by stocks and bonds, is in play right now!
CLICK ON CHART TO ENLARGE
The S&P 500, has remained inside of rising channel (1), for the majority of the past 20-years.
The 10-year yield (Inverted) has remained inside of rising channel (2), for the major...
When the Dow Jones moves the media must have an explanation for it. However the insiders have the nod to what is going on.
The media story so far is that since the TRUMP win, managers have been rotating their portfolios to represent TRUMP trends (lower taxes, go easy on the 'too big to fail' Wall Street banks, more jobs for Americans). Prior the election the stock market was set up for a HILLARY win, due to more of the same, status quo, FED support. But....
Using Richard Ney logic, the short answer is, stocks were always going up and the election results do not matter nor would a higher 10 yr bond or lackluster fundamentals. The real story is the marke...
Come join us for the Phil's Stock World's Conference in Las Vegas!
Date: Sunday, Feb 12, 2017 and Monday Feb 13, 2017.
Beginning Time: 8:00 am Sunday morning
Location: Caesar's Palace in Las Vegas
Caesar's has tentatively offered us rooms for $189 on Saturday night and $129 for Sunday night. However, we have to sign the contract ASAP. We need at least 10 people to pay me via Paypal or we may lose the best rate for the rooms. (Once we are guaranteed ten attendees, I will put up instructions to call the hotel for individual rooms.)
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.
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Last Thursday we reported that in a startling development seeking to breach the privacy veil of users of America's largest bitcoin exchange, the IRS filed court papers seeking a judicial order to serve a so-called “John Doe” summons on the San Francisco-based Bitcoin platform Coinbase.
The government’s request is part of a bitcoin tax-evasion probe, and se...
There is a reason no Berkshire Hathaway investor chides Buffett when the company has a bad quarter. It’s because Buffett has so thoroughly convinced his investors that it’s pointless to try to navigate around 90-day intervals. He’s done that by writing incredibly lucid letters to investors for the last 50 years, communicating in easy-to-understand language at annual meetings, and speaking on TV in ways that someone with no investing experience can grasp.
Yes, Buffett runs an amazing investment company. But he also runs an amazing investor company. One of the most underappreciated part of his s...
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