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Archive for January, 2012

ETFs Quiet Before The Storm (SPY, DIA, QQQ, IWM)

Courtesy of John Nyaradi.

ETFs Quiet Before The Storm (SPY, DIA, QQQ, IWM)ETFs were quiet today as investors readied themselves for Econ Reports, Facebook IPO, and European woes tomorrow

Major markets and index ETFs were mixed today as investors anticipate tomorrow’s Econ Reports, a possible Facebook IPO, and a possible European solution.  The S&P 500 decreased .05%, the Dow Jones Industrial Average dropped .16%, the NASDAQ composite increased .07%, and the Russell 2000 Index decreased .06%.  Index ETFs followed suite as the SPDR S&P 500 ETF (NYSEARCA:SPY) declined .13%, the SPDR Dow Jones Industrial Average ETF (NYSEARCA:DIA) decreased .15%, the PowerShares QQQ Series 1 Trust ETF (NASDAQ:QQQ) increased .13%, and the iShares Russell 2000 Index ETF (NYSEARCA:IWM) decreased .04%.  Quiet before the storm…

Europe, of course, remains the largest wild card as policy makers struggle to find a sovereign debt solution and Greece debt talks continue to stall.  Of course, the only real way to fix the debt dilemma is to, well, to pay off all of the debt, except that paying off debt requires heavy revenue increases and heavy spending decreases, both of which would cripple an economy on the verge of (some would argue an economy already in) a recession.  Quiet before the storm…

Tomorrow also brings the Facebook IPO announcement, which could possibly send all markets skyward for a minute or two.  Facebook will file for a $5 billion IPO, which is the largest ever IPO from the Silicon Valley.  As Facebook is valued at approximately $80 billion, watch out for tech ETFs, especially the Q’s, as tomorrow will be a big day for the tech sector.  Quiet before the storm…

And lastly, tomorrow brings us a slew of economic report cards, including the ADP unemployment report, ISM report, construction spending report, and motor vehicle sales report, any of which would rock the boat on a normal day.  Quiet before the storm…

Commodities ETFs and VIX ETFs were flat today, while US Dollar ETFs and Treasury Bond ETFs were up slightly, likely because the Fed seems more stable than the European Central Bank.  Keep in mind that Iran could at any moment attempt to close the Strait of Hormuz or shut off  European oil supplies, which would create a whole different kind of chaos for us all.  Quiet before the storm…

Bottom Line:
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Moving Averages: Month-End Update

Courtesy of Doug Short.

Valid until the market close on February 29, 2012

The S&P 500 closed January with a gain of 4.36% from the December close. All three index signals indicated an invested position. See the specifics here.

The Ivy Portfolio

The table below shows the current 10-month simple moving average (SMA) signal for each of the five ETFs featured in The Ivy Portfolio. I’ve also included a table of 12-month SMAs for the same ETFs for this popular alternative strategy.

Backtesting Moving Averages

Monthly Close Signals Over the past few years I’ve used Excel to track the performance of various moving-average timing strategies. But now I use the backtesting tools available on the ETFReplay.com website. Anyone who is interested in market timing with ETFs should have a look at this website. Here are the two tools I most frequently use:

Background on Moving Averages

Buying and selling based on a moving average of monthly closes can be an effective strategy for managing the risk of severe loss from major bear markets. In essence, when the monthly close of the index is above the moving average value, you hold the index. When the index closes below, you move to cash. The disadvantage is that it never gets you out at the precise top or back in at the very bottom. Also, it can produce the occasional whipsaw (short-term buy or sell signal), such as we’ve experienced this summer.

Nevertheless, a chart of the S&P 500 monthly closes since 1995 shows that a 10- or 12-month simple moving average (SMA) strategy would have insured participation in most of the upside price movement while dramatically reducing losses.

The 10-month exponential moving average (EMA) is a slight variant on the simple moving average. This version mathematically increases the weighting of newer data in the 10-month sequence. Since 1995 it has produced fewer whipsaws than the equivalent simple moving average, although it was a month slower to signal a sell after these two market tops.

A look back at the 10- and 12-month moving averages in the Dow…
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CBO REPORT – OMG!

Courtesy of Bruce Krasting

The Congressional Budget Office (CBO) is out with its annual report. It’s a blockbuster. This 165 page monster is filled with dozens of charts, graphs and detailed projections. It will be talked about for weeks. The report provides a dismal outlook for the economy. There is one data point I'd like to focus on.

Here is the CBO forecast for real GDP for 2012 and 2013:

 

 

 

The 1.1% Real GDP number for 2013 surprised me. The CBO’s expectations are way under those of both the “Blue Chip” economists and the Federal Reserve:

What does it mean if the economy is going to slow, as CBO now thinks? Some consequences:

 
.
.

 

The CBO now forecasts Social Security to run into trouble in just a few years. This is a very substantial change in the outlook for SS. Changed fortunes make it certain that America’s favorite entitlement program will be on the table for a significant re-vamp.

The CBO has answered two critical question:

1) In what year does SS first goes into deficit (including interest)?

2) What is the size of the SS Trust Fund when #1 has been achieved?

Key data is here:

 

 

Using this information, we can estimate the Trust Funds (TF) balances over time, and compare them to what SS forecast in its report to Congress ten-months ago:

 
SSTF's "Intermediate" (Base) case:

 

The bottom line is that the SSTF is going to top out three years ahead of “schedule” and be $800B shy of what it was “supposed” to be.

I think the CBO report has created a big headache for a good number of folks in D.C. Most of them are running for office this year. They certainly won't be able to wave the CBO report as a measure of how well they are doing.

 




Bill Dudley’s Financial Holdings Disclosed At Time Of AIG Bailout

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Earlier today, the New York Fed was kind enough to voluntarily disclose the finacial holdings and assets of one former Goldman Sachs employee, and current FRBNY president Bill Dudley. Bill Dudley is also known as the gentleman to have received, when he was stil head of the PPT, aka the Fed’s Open Markets Group, a waiver signed by one Tim Geithner on September 19, 2008, allowing him to keep not only his investment in AIG, which was “de minimis” at $1,200, but also in General Electric, which was not de minimis at $106,830. And while his modest holdings of AIG likely did not impact Dudley’s protocol of bailing out the failed insurer, his interest in GE, and thus its then fully held subsidiary NBC Universal, parent of such comedy channels as CNBC, could potentially have been a source of conflict. Which is why the Fed has disclosed the full holdings of Dudley as of the 2008 year, in which we find that the bulk of Dudley’s net worth was held by JPMorgan Chase Deferred Income Benefit Award (over $1MM) and JPM Chase Deferred Compensation ($500,001-$1,000,000). Was Mr. Dudley also completely conflict free vis-a-vis the bulk of his holdings, and their custodian, and did the New York’s Fed largesse to bail out JPM among many others, have anything to do with this particular heretofore unknown detail? Of course not. After all, Jon Corzine is a free man. In other news, anyone who needs urgent access to the discount window or a $1 trillion overnight loan at 0.001% interest, should just call the Fed’s 24/7 hotline: 877-52-FRBNY.

This is how the Fed generously classified its release:

In order to promote transparency and in response to media interest, the
Federal Reserve Banks are today making available the financial
disclosure forms and related documents filed by their current presidents
with Federal Reserve Bank ethics officers. 

Full Dudley financial disclosure:

 

 

Full text of Waiver granted to Bill Dudley, and signed by Tim Geithner:

 

 

And as a reference, the New York Fed’s code of conduct:

 





Goldilocks Is Back – China PMI Rises To 50.5, Modest Beat Of Expectations, Shy Of Whisper Number

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

China’s goal-seeked economy performed admirably in January, and its Manufacturing PMI came absolutely golidlocks at 50.5, an increase from 50.3, previously, just modestly beating Wall Street expectations of a slight contraction of 40.6, yet a less than earlier whisper numbers which put it at 52. As such, thereis absolutely no indication if the PBoC will further tighten or ease in the next month, just as the PBoC likes it, because while many have been demanding easing in the last several weeks, and especially the housing market, the reality is that hot pockets of inflation still remain. Furthermore, the last thing China needs is to proceed with full on easing just as Bernanke goes ahead and launches QE x which will export more hot money, and thus inflation, to China than anywhere else, with the possible exception of gold.

And here are some observations from Bloomberg’s Michael McDonough:

  • Headline PMI remained above 50 for two consecutive months; another 50-plus reading in Feb. would be very positive sign,
  • Underlying data still weak with new export orders falling to 46.9 from 48.6, while new orders rose to 50.4
  • Typically if this were true bottom, all forward-looking sub-components would rise above 50 in a month prior or the same     month as headline index 
  • Building domestic pressure coupled with foreign risks should  continue to weigh on the Chinese economy, including the PMI going forward, forcing policy makers to cut RRR and eventually policy rates once they are convinced threat of inflation has been squelched

PMI charted:





First Results Are In – Live Tracker Of Florida GOP Primary

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

The first numbers in the Florida GOP Primary have started trickling in with the polls still open, and while as already noted DieBold did ‘leak’ the final results of the election previously, those who either care what the outcome of tonight’s event is, or are masochists, or both, are welcome to follow the latest developments below.

CNN Live:

and Live maps:





Benzinga’s M&A Chatter for Tuesday January 31, 2012

Courtesy of Benzinga.

The following are the M&A deals, rumors and chatter circulating on Wall Street for Tuesday January 31, 2012:

Multiband Announces Expiration of Letter of Intent to Acquire WPCS International

The Expired Offer:
Multiband Corporation (NASDAQ: MBND) announced Tuesday that it will allow a Letter of Intent for the remaining portion of an acquisition with WPCS International (NASDAQ: WPCS) to expire effective February 1, 2012 as the Company believes it is not viable to conclude the transaction as originally intended given current market valuations. This will result in Multiband losing exclusivity to negotiate a purchase of the remaining business operations of WPCS. The original agreement included a provision that during the exclusivity timeframe, Multiband would not sell any of the 709,271 common shares of WPCS International it currently owned. This restriction will now be lifted as well. The terms are consistent with those detailed in the parties’ original June 2011 Letter of Intent.

WPCS International closed at $1.69 Tuesday, a loss of 0.59% for the day on 4.75 times the average daily volume.

Global NuTech Acquires Texas Gulf Oil and Gas

The Deal:
Global NuTech (BOCL) announced Tuesday that the company has acquired 100% of the stock of Houston, Texas based Texas Gulf Oil & Gas. The acquisition from private equity firm Corporate Strategies Merchant Bankers includes individual oilfield producing assets and options throughout the Austin Chalk and near the Eagle Ford shale play in Texas. These assets include leases, options and working interests in 19 oil wells throughout the area and additional options to invest in wells to be drilled or re-entered in three leases identified as the Tilmon, Lay, and Rodenberg. David Mathews, CEO of Global NuTech, said, “Texas Gulf Oil & Gas provides us a platform to expand vertically in the energy markets, specifically in energy services, exploration and production. The President of Texas Gulf, Damon Wagley, brings many years of experience and a qualified team to expand the company’s service and exploration business. The Wagley family first entered the oil and gas business in 1952, and brings a wealth of knowledge, experience and relationships that extend from central Texas to the North Sea. We are quite fortunate to have Damon Wagley’s oil field experience and leadership to build Texas Gulf…
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Did God Hack Goldman Sachs?

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

It is oddly appropriate that when a reader opens the client portal of Goldman Sachs, also known as the bank that does God’s work, in order to pull Jan Hatzius’ take on today’s economic data assortment, one would encounter the following amusingly intentional easter egg…

As a reminder Psalm 138:

1 A Psalm of David. I give thee thanks, O LORD, with my whole heart; before the gods I sing thy praise; 2 I bow down toward thy holy temple and give thanks to thy name for thy steadfast love and thy faithfulness; for thou hast exalted above everything thy name and thy word. 3 On the day I called, thou didst answer me, my strength of soul thou didst increase. 4 All the kings of the earth shall praise thee, O LORD, for they have heard the words of thy mouth; 5 and they shall sing of the ways of the LORD, for great is the glory of the LORD. 6 For though the LORD is high, he regards the lowly; but the haughty he knows from afar. 7 Though I walk in the midst of trouble, thou dost preserve my life; thou dost stretch out thy hand against the wrath of my enemies, and thy right hand delivers me. 8 The LORD will fulfil his purpose for me; thy steadfast love, O LORD, endures for ever. Do not forsake the work of thy hands.

All joking aside, it appears out friends at 200 West have a bit of a mole infestation on their hands…





S&P 500 Snapshot: Fourth Day Down, But a Great January

Courtesy of Doug Short.

The S&P 500 popped at the open, but then fell to a midday low, off about half a percent, before making a steady comeback. The closing hour played touch-and-go with break even, with the finally tally being a fractional loss of 0.05% for the day. That’s the fourth consecutive finish in the red. But the month of January saw a gain of 4.36%. To put that into context, that’s the 11th best January since the inception of the S&P 500, in March 1957. The index is 3.76% below its interim high at the end of April 2011.

From an intermediate perspective, the S&P 500 is 94.0% above the March 2009 closing low and 16.1% below the nominal all-time high of October 2007.

Below are two charts of the index, with and without the 50 and 200-day moving averages.

 

Click to View
Click for a larger image

 

 

Click to View
Click for a larger image

 

For a better sense of how these declines figure into a larger historical context, here’s a long-term view of secular bull and bear markets in the S&P Composite since 1871.

For a bit of international flavor, here’s a chart series that includes an overlay of the S&P 500, the Dow Crash of 1929 and Great Depression, and the so-called L-shaped “recovery” of the Nikkei 225. I update these weekly.

These charts are not intended as a forecast but rather as a way to study the current market in relation to historic market cycles.

 

 

 

 





Digimarc Resolves License Dispute with Verance

Courtesy of Benzinga.

Digimarc Corporation (NASDAQ: DMRC) announced today resolution of all disputes with Verance Corporation regarding existing patent and breach of contract claims. Digimarc and Verance will file a joint motion to dismiss Digimarc’s breach of contract claim against Verance related to Verance’s alleged failure to make payments under a license agreement entered into between Digimarc and Verance in August 2002. They also will file a joint motion to dismiss Verance’s appeal in its action for declaratory judgment alleging invalidity and non-infringement of twenty-two Digimarc patents.

In connection with the resolution of these matters, Digimarc and Verance entered into a three year renewal and extension license agreement, effective October 1, 2011, pursuant to which Verance paid Digimarc $8 million for amounts due to Digimarc through September 30, 2011. The agreement further provides that Verance will continue to pay royalties quarterly to Digimarc. Upon completion of the initial three year term, Verance may renew the agreement for up to nine additional one year periods. The renewal and extension license agreement replaces the August 2002 license agreement between the parties.


For more Benzinga, visit Benzinga Professional Service, Value Investor, and Stocks Under $5.





 
 
 

Zero Hedge

Banker Death 'Epidemic' Spreads To China

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Until now, the terrible trail of dead bankers has been only among US and European financial executives. However, as Caixin reports, the increasing pressures on the Chinese banking system appear to have take their first toll. Li Jianhua, director of China's Banking Regulatory Commission (CBRC), died this morning due to a "sudden heart attack" - he was less than 49 years old. Li was among the main drafters on new "caveat emptor" market-based rules on China's shadowy banking system and recently said in an interview that "now is not only a time to control risk, but to transform the trust industry.. if it's ...



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Chart School

S&P 500 Snapshot: Six-Day Rally Ends

Courtesy of Doug Short.

The six-day rally in the S&P 500, the longest since early September, came to a halt with a modest 0.22% decline at the close. Today's trading took place within the second narrowest intraday range of the year, a mere 0.31% -- slightly wider than the 0.29% on March 5th. The popular financial press blames today's loss on some pre-open earnings disappointments and a surprisingly weak New Home Sales report (see the interesting analysis of the latter by New Deal Democrat). Even more surprising was the market's indifference to the bad numbers. Today's market mentality was probably more focused expectations of Apple's quarterly earnings after the close, which has triggered a surge in futures as I type this.

The yi...



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Phil's Favorites

APPLE BEATS ON EARNINGS, ANNOUNCES STOCK SPLIT, STOCK EXPLODES HIGHER

APPLE BEATS ON EARNINGS, ANNOUNCES STOCK SPLIT, STOCK EXPLODES HIGHER

Courtesy of Jay Yarow at Business Insider

Apple earnings are out!

The stock is up ~8% in immediate reaction to the news.

Apple shipped 43.7 million iPhone, up 17% year-over-year, blowing away expectations.

Revenue was $45.6 billion, growing 4% year-over-year, also beating expectations. 

The iPad number was a giant miss, though. Apple sold 16.35 million, which is a 16% drop on a year-over-year basis. 

In the release, CEO Tim Cook said, "We’re very proud of our quarterly results, especially our strong iPh...



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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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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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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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