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Archive for 2010

Swing trading virtual portfolio – week of March 22nd, 2010

This post is for live trades and daily comments. 

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

- Optrader





Unemployment Bet: Mish vs. Bryan Caplan at the Library of Economics and Liberty Blog

Unemployment Bet: Mish vs. Bryan Caplan at the Library of Economics and Liberty Blog

Courtesy of Mish 

Falling Businessman

Last week I was at a Economics Bloggers Forum in Kansas City sponsored by the Kauffman foundation.

Paul Kedrosky at Infectious Greed, Mark Thoma at Economist View, Former President of the Dallas Fed Bob McTeer , Michael Mandel, former chief economist for BusinessWeek, Bryan Caplan at the Library of Economics and Liberty Blog and a group of about 20 others were at the conference.

I gave my views on the unemployment rate and most thought I was too pessimistic. Bryan Caplan proposed a bet and you can find it here: Unemployment Bet: Mish vs. Bryan Caplan.

On the fiscal crisis panel, Mish predicted high unemployment for the next ten years. This provoked a lot of heat but little light. Over dinner, though, Mish and I hammered out the following bet:

If the official initially reported U.S. monthly unemployment rate falls below 8.0% for any month between now and June, 2015, I win $100. Otherwise, Mish wins $100.

Mish based his pessimism on the implausibility of rapid job growth in construction and other key sectors. I saw this as misleading "near" reasoning – and took the "far" road instead. My position: During the last big recession in the Eighties, the unemployment rate fell about 1 percentage-point per year after the peak. So while full recovery is indeed about five years away, it would be very surprising if unemployment stayed at 8% or more for three years, much less five. Where will the new jobs appear? If I knew that, I’d probably be investing in them instead of blogging about my bets!

I highly doubt the employment growth in the 80′s is the correct model, nor is the recovery following the 2001 recession.

The latter had the benefit of a housing boom followed by a commercial real estate boom, neither of which is coming. In the 80′s there was still a transition from one parent working households to two parent working households and that transition enormously increased the credit buying power of households. Given that the consumer is 70% of the economy and given the 90′s had an internet boom creating amazing numbers of jobs, such comparisons are prone to huge errors.

Let’s not forget that interest rates fell from 18% to zero and that the…
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“Passage Of The Healthcare Bill Means The Double-Dip Is Coming” – Market Insight From Permabull Jim Cramer Who Just Turned Bearish

Courtesy of Tyler Durden

Jim Cramer may be in hot water with the SEC over his theStreet.com, and he may be a mouthpiece for the biggest ponzi enabling organization the developed world has ever seen, however, he did have some interesting and spot-on observations on the just passed health care bill. In a nutshell, and for once we agree with Cramer, if futures are not limit down right now, it is because of the same bidding hand that has kept the market going straight up at a 30 degree angle for the past year.

Obamacare Will Topple the Rickety Market By Jim Cramer RealMoney

Either the market doesn’t care that the health care bill will pass --  and it will — or it doesn’t think that the proposal will cost that much — something I think is nuts. Which brings us to a very tenuous crossroad: We have to wonder if this is one of those occasions, like in 2008, where the market doesn’t see the coming catastrophe. Or perhaps the market sees any resolution as positive.

I don’t. I think when the health care bill passes — and it will pass, I believe, because Nancy Pelosi has worked diligently behind the  scenes to bend the anti-abortion foes, the key votes, to her will — the president will get a second wind. That means the whole agenda — cap-and-trade, Card Check for easier organizing (something that Wal-Mart’s (WMT) inability to move even on its dividend boost tells you is coming) and amnesty for immigrants who are currently not citizens — will quickly come to pass, perhaps even before the election. To pay for these items I see a dramatic increase in ordinary tax rates and perhaps capital gains and dividend tax rates in 2011 either reaching or exceeding those ordinary income rates as this current version of the Democratic Party believes that only rich people own stocks. (That’s been a hallmark from Day 1 with this administration.)

Given those hurdles, which include a suicide pact with financial health for small businesses that obviously can’t afford health care without risking the capital formation necessary, I think you have to put the double-dip recession back on the table.

Those who have read me here and watch “Mad Money” know that I was out there early thinking that 2010 would


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A Generous Government Keeps Doling Out The Refunds Even As 2009-2010 Tax Withholding Difference Hits New Low

Courtesy of Tyler Durden

We previously discussed the curious phenomenon of increasing individual tax refunds handed out by the US Treasury, despite record weak tax withholdings, and speculated that the Treasury’s generosity, which is very much unfounded, is one of the main reasons for the consumer “outperformance” year to date, due to the excess money obtained by US consumers courtesy of what appears an oddly lax Internal Revenue Service. We won’t speculate on the secondary implications of governmental cash flows to and from taxpayers, and instead will focus on actually following the cash. The conclusion is simple: even as the IRS has paid out far more in refunds in 2010 versus 2009, the difference in gross tax withholdings between 2009 and 2010 is at year highs. The government can not afford to pay refunds, yet does so at an alarming pace. The net difference (withholdings net of refunds) for just the first 10 weeks of 2010 is already at a ($42.7) billion cumulative number: a new 2010 high.

The chart below demonstrates the weekly difference between gross individual tax withholdings in 2009 and 2010. Out of the past 10 weeks, there have been only two in which 2010 saw greater tax withholdings (and these were for $0.2 and $0.4 billion).

Visualizing the data series on a cumulative basis shows that by week 10 of 2010, the differential in the gross withholdings number has reached $35 billion.

What is surprising is that a comparable analysis of weekly refund payments in 2009 and 2010, shows just the inverse: in 2010 the government has paid nearly $8 billion more in cumulative refunds compared to 2009: $152.1 billion vs $159.8 billion.

Combining these two data sets indicates that on a Net basis (gross withholdings net of refunds), the delta has hit a year to date record $42.7 billion: $344.2 billion in 2010 vs $386.9 billion in 2009.

Yes, at a time when the Fed is doing all it can to fund each and every auction with an increasingly odd cadre of bidders, be they direct, fund based, BlackRock, or whoever, the government should do all it can to minimize the weekly funding delta need. Alas, as the chart above shows, the government keeps on paying more and more even as it is collecting less and less. And this happens, as the country is faced with a…
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Dynamics of Gold, US Dollar & Gold Equities

Dynamics of Gold, US Dollar & Gold Equities

Courtesy of Market Folly

Gold Coin

Since many hedge funds have exposure to gold in some fashion, we’re posting up some interesting research from Raymond James on the topic of precious metals. Their commentary was published amidst the massive rally in the US dollar that definitely impacted the performance of gold. Given the action early in the year, they took advantage of the opportunity to look at the dynamic between gold, the US dollar, and gold related companies.

Maybe the most intriguing bit of research was their focus on equity stakes of gold miners and how they performed during the various swings in the price of gold. We note this correlation because while John Paulson’s new gold fund will invest in derivatives on the price of gold, the main strategy is to acquire equity stakes in gold miners. Paulson is actually using these equity stakes as a wager against the US dollar. So, while many will examine the dynamic between the US dollar and gold, it is also worth taking a look at how shares of gold miners are affected as well.

If Paulson thinks the US dollar will decline, then he is essentially wagering that the price of gold will increase. More importantly though, it appears as if he thinks equity stakes in gold miners will produce greater returns based on the correlation. But, as you will see from the research below, you also have to look at company specific risk. This comes after Paulson & George Soros recently bought shares of a gold miner.

At any rate, you can examine Raymond James’ research below. Of the companies they cover in the space, Aura, Osisko, Great Basin Gold, and San Gold performed the best "on average, across all three post ‘risk aversion’ rallies." The companies that suffered most over the big gold sell-off were Lake Shore, Golden Star, Aurizon and Yamana. Based on their research, Raymond James favors developers Anatolia and Detour, mid-tier producers San Gold and Crocodile, and large producers Agnico-Eagle and Eldorado.

Embedded below is Raymond James research on the dynamic between gold, the US dollar & gold related companies:

You can directly download a …
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How to Get Off the Performance Roller Coaster

How to Get Off the Performance Roller Coaster

Munich Oktoberfest Preparations

By Brett Steenbarger 

Do you find yourself on a performance roller coaster? This is a situation in which you make money for a while, begin to think you have it all figured out, only to fall back, lose money, and feel like a rookie all over again. 

A while back, I wrote about the performance roller coaster and some of the emotional factors that sustain it. The gist of that important post was that how we process wins and losses affects our subsequent trading--and sometimes contributes to winning and losing streaks.

I just finished an enjoyable interview with Mark Wolfinger of the Options for Rookies site. One topic that came up was the way in which traders identify with their P/L. Once a trader’s sense of identity and esteem becomes caught up in profits and losses, the trader begins an emotional roller coaster simply due to the natural ups and downs of markets.

Continue here.>>

See also: Addictive Trading: When Trading Becomes a Problem


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The Future After Health Care

The Future After Health Care

By Megan McArdle, The Atlantic 

Regardless of what you think about health care, tomorrow we wake up in a different political world.

Parties have passed legislation before that wasn’t broadly publicly supported.  But the only substantial instances I can think of in America are budget bills and TARP--bills that the congressmen were basically forced to by emergencies in the markets.

P>One cannot help but admire Nancy Pelosi’s skill as a legislator.  But it’s also pretty worrying.  Are we now in a world where there is absolutely no recourse to the tyranny of the majority?  Republicans and other opponents of the bill did their job on this; they persuaded the country that they didn’t want this bill.  And that mattered basically not at all.  If you don’t find that terrifying, let me suggest that you are a Democrat who has not yet contemplated what Republicans might do under similar circumstances.  Farewell, social security!  Au revoir, Medicare!  The reason entitlements are hard to repeal is that the Republicans care about getting re-elected.  If they didn’t--if they were willing to undertake this sort of suicide mission--then the legislative lock-in you’re counting on wouldn’t exist.

Oh, wait--suddenly it doesn’t seem quite fair that Republicans could just ignore the will of their constituents that way, does it?  Yet I guarantee you that there are a lot of GOP members out there tonight who think that they should get at least one free "Screw You" vote to balance out what the Democrats just did.

Read whole article here.>>


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Bears

Robert Prechter’s Thoughts on Valuation and Sentiment

Courtesy of Adam Sharp at Bearish News 

Nice interview via CNBC. Mr. Elliot Wave talks about current extreme bullish sentiment and what it means, among other things.

*****

Don’t let the bears eat you while you’re sleeping! (I know, you’re not worried now.)

THE SLEEPING BEAR

Courtesy of Jason Louv at Dangerous Minds 

image

This is perhaps the greatest camping accessory ever made. A sleeping bag that looks like a bear—perfect for scaring away bears that show up in the night… unless they fall in love and try to get all up in that shit….?

This is a greatest sleeping bag. You can wear it to sleep when you go camping. It is safe that no bear will attack your camp and eat you? Or you just want to wear it, and then scare your friend when he(she) wake up in the morning. (a good idea!) Well made and Cool! By artist Eiko Ishizawa.

(The Sleeping Bear)

(Thanks, @leashless!) 


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Guest Post: Weekly Gold, Silver, Oil & Natural Gas Analysis

Courtesy of Tyler Durden

Submitted by Chris Vermeulen of www.GoldAndOilGuy.com

 





The Oxen Report: The Market Continues Its Run, The Oxen Report Continues Its Successes

We had another good week with The Oxen Report. We were able to make some pretty great picks, yet, we only had a small handful of selections due to me missing Monday and deciding to post a more educational article on Friday. We had all winners with the three picks upon which we took action, and we had one pick, Hovnanian Enterprises (HOV) that we did not play due to the fact that the Short Sale never hit our entry range. Let’s break down the week, and how we did. It was a solid 3/3.

Winners of the Week:

Rue21 Inc. (RUE) – We started out on Tuesday with a great Buy Pick of the Day in RUE. I liked this attractive play because of the way the retail sector was booming with earnings over the past couple weeks, and on Tuesday night, RUE was going to be releasing earnings. We were not looking to make an earnings play, but the stock had some great movement upwards and was in the midst of getting bought up moving into earnings. With the market looking up and RUE looking up, we were able to enter early in the day and get a nice pop upwards as investors bought into the company. The company ended up announcing pretty strong results on the quarter, which was expected. We were out, though, with a 3% gain before that could happen. We entered in the morning at 33.30 and exited at 34.57 only thirty minutes into the day.

New York & Co. Inc. (NWY) – Our Overnight Trade of the Day was a pretty exceptinonal one for us. Again, we were dipping into the common theme of the week, which was retail. New York & Co. seemed to be a strong play because it had a very similar structure to other companies that had had very strong results. Further, the company had not reported in the green in over two years, but they looked ready to get into the green. The company reported a solid earnings beat, and they reported a large gain year-over-year, as well. It helped us make a solid 3%. We got in at 4.34 on Wednesday and exited on Thursday within minutes at 4.46. The stock, however, went on to be worth lots more, hitting a high in that day near 5, which was worth over 10%. Many of you…
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Zero Hedge

The Fed's Farcical Forecast Fiasco

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

The chart below, which summarizes 5 years of Fed "forward guidance" on that most critical of variables - the Fed Funds rate - proves two things:

i) there is nothing worse in this world than being a Fed Funds, or Eurodollar, trader, considering 5 years of forecasts have been systematically destroyed by a Fed which has failed time and time and time again to stimulate the economy enough to push it away from ZIRP (and why any hope for the first rate hike in mid-2015 are idiotic), and

ii) when it comes to central planning, the economists that now openly control the bond and stock market and increasingly more of global capital flows, have absolutely no idea what tomorrow brings perversely, since it i...



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Phil's Favorites

China Manufacturing Output and New Orders Contract Once Again

Courtesy of Mish.

Chinese manufacturing remains in contraction for 2014. Output and new orders were down for the 4th consecutive month, but at a slightly reduced pace according to the HSBC Flash China Manufacturing PMI.



Commenting on the Flash China Manufacturing PMI survey, Hongbin Qu, Chief Economist, China & Co - Head of Asian Economic Research at HSBC said:

“The HSBC Flash China Manufacturing PMI stabilised at 48.3 in April, up from 48.0 in March. Domestic demand showed mild improvement and deflationary pressures eased, but downside risks to growth are still evident...



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Chart School

STTG Market Recap April 22, 2014

Courtesy of Blain.

We continue in this "V shaped" move off last week's touch of the 200 day moving average on the NASDAQ.  The S&P 500 gained 0.41% and the NASDAQ 0.97%.  The indexes are nearing overbought near term so a day or two of rest would serve the bulls well to try to attempt a new leg higher.  In economic news existing home sales hit 4.59 million in March, versus a 4.55 million estimate.

In terms of the indexes the S&P 500 stalled at the trend line that connected the lows of summer 2013; some congestion lies ahead at year highs.

The NASDAQ has come back from deeply oversold conditions as this index is heavy with biotech and momentum stocks.  The dotted blue line is the previous high; since early March we have not seen the NASDAQ make...



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Market Shadows

Soy Numero Uno

Soy Numero Uno

By Paul Price of Market Shadows

Bunge Limited (BG) is the world’s largest processor of soybeans. It is also a major producer of vegetable oils, fertilizer, sugar and bioenergy.

When commodities got hot in 2007-08, Bunge’s EPS shot up and the stock followed, rising 185% in 19 months.

The Great Recession took its toll on operations, dropping EPS to a low of $2.22 in 2009.  Since then profits have recovered.  They ranged from $4.62 - $5.90 in the latest three years. 2014 appears poised for a large increase. Consensus views from multiple sources see BG earning $7.04 - $7.10 this year and then $7.83 - $7.94 in 2015.

...



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Option Review

Casino Stocks LVS, WYNN On The Run Ahead of Earnings

Shares in Las Vegas Sands Corp. (Ticker: LVS) are up sharply today, gaining as much as 5.7% to touch $80.12 and the highest level since April 4th, mirroring gains in shares of resort casino operator Wynn Resorts Ltd. (Ticker: WYNN). The move in Wynn shares appears, at least in part, to follow a big increase in target price from analysts at CLSA who upped their target on the ‘buy’ rated stock to $350 from $250 a share. CLSA also has a ‘buy’ rating on Las Vegas Sands with a $100 price target according to a note from reporter, Janet Freund, on Bloomberg. Both companies are scheduled to report first-quarter earnings after the closing bell on Thursday.

...

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All About Trends

Mid-Day Update

Reminder: David 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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Sabrient

What the Market Wants: Market Poised to Head Higher: 3 Stocks to Consider

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

Courtesy of David Brown, Sabrient Systems and Gradient Analytics

Yesterday, the market continued its winning ways for the fifth consecutive day.  The S&P 500 closed within 1% of its all-time high, and the DJI was even closer to its all-time high.  Healthcare, Energy and Technology led the sectors while Financials, Telecom, and Utilities finished slightly in the red.  All three sectors in the red are typically flight-to-safety stocks, so despite lower than average volume, the market appears poised to make new highs.

Mid-cap Growth led the style/caps last week, up 2.87%, and Small-cap Growth trailed, up 2.22%. This week will bring well over 100 S&P 500 stocks reporting their March quarter earn...



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OpTrader

Swing trading portfolio - Week of April 21st, 2014

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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Stock World Weekly

Stock World Weekly

Newsletter writers are available to chat with Members regarding topics presented in SWW, comments are found below each post.

Here's this week's Stock World Weekly. Click here and sign in with your PSW user name and password, or sign up for a free trial.

...

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Digital Currencies

Facebook Takes Life Seriously and Moves To Create Its Own Virtual Currency, Increases UltraCoin Valuation Significantly

Courtesy of ZeroHedge. View original post here.

Submitted by Reggie Middleton.

The Financial Times reports:

[Facebook] The social network is only weeks away from obtaining regulatory approval in Ireland for a service that would allow its users to store money on Facebook and use it to pay and exchange money with others, according to several people involved in the process. 

The authorisation from Ireland’s central bank to become an “e-money” institution would allow ...



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Promotions

See Live Demo Of This Google-Like Trade Algorithm

I just wanted to be sure you saw this.  There’s a ‘live’ training webinar this Thursday, March 27th at Noon or 9:00 pm ET.

If GOOGLE, the NSA, and Steve Jobs all got together in a room with the task of building a tremendously accurate trading algorithm… it wouldn’t just be any ordinary system… it’d be the greatest trading algorithm in the world.

Well, I hate to break it to you though… they never got around to building it, but my friends at Market Tamer did.

Follow this link to register for their training webinar where they’ll demonstrate the tested and proven Algorithm powered by the same technological principles that have made GOOGLE the #1 search engine on the planet!

And get this…had you done nothing b...



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Pharmboy

Here We Go Again - Pharma & Biotechs 2014

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

Ladies and Gentlemen, hobos and tramps,
Cross-eyed mosquitoes, and Bow-legged ants,
I come before you, To stand behind you,
To tell you something, I know nothing about.

And so the circus begins in Union Square, San Francisco for this weeks JP Morgan Healthcare Conference.  Will the momentum from 2013, which carried the S&P Spider Biotech ETF to all time highs, carry on in 2014?  The Biotech ETF beat the S&P by better than 3 points.

As I noted in my previous post, Biotechs Galore - IPOs and More, biotechs were rushing to IPOs so that venture capitalists could unwind their holdings (funds are usually 5-7 years), as well as take advantage of the opportune moment...



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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...

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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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