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Archive for 2012

World Markets Weekend Review: A Mixed Start for 2012

Courtesy of Doug Short.

Note from dshort: At the suggestion of Joerg Willig, a finance professional in Germany, I have replaced the DAX index, which includes dividends, with the price-only DAXK. This change levels the playing field, so to speak, for our international comparisons.


Our eight benchmark world indexes got off to a mixed start for 2012, again on thin volume and variously abbreviated by a mix of market holidays. The DAXK and BSE SENSEX were the stellar performers, a full percent above the S&P 500, which also had strong opening week, as did the FTSE 100. The Shanghai finished last and is now a stunning 37.68% off its interim high. In fact, the adjacent chart shows that six of our eight indexes are more than 20% off their interim highs.

A Closer Look at the Last Four Weeks

The tables below provide a concise overview of performance comparisons over the past four weeks for these eight major indexes. I’ve also included the average for each week so that we can evaluate the performance of a specific index relative to the overall mean and better understand weekly volatility. The colors for each index name help us visualize the comparative performance over time.

The chart below illustrates the comparative performance of World Markets since March 9, 2009. The start date is arbitrary: The S&P 500, CAC 40 and BSE SENSEX hit their lows on March 9th, the Nikkei 225 on March 10th, the DAX on March 6th, the FTSE on March 3rd, the Shanghai Composite on November 4, 2008, and the Hang Seng even earlier on October 27, 2008. However, by aligning on the same day and measuring the percent change, we get a better sense of the relative performance than if we align the lows.

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Click for a larger image

A Longer Look Back

Here is the same chart starting from the turn of 21st century. The relative over-performance of the emerging markets (Shanghai, Mumbai, Hang Seng) is readily apparent.

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Click for a larger image

Check back next weekend for a new update.

 

 

 

 





Inhibitex Deal Leaked Or Just ‘Exceptional’ Timing?

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Early Friday morning, Jon Najarian of optionMONSTER fame noted (on his site as well as CNBC) some ‘unusual’ action in an illiquid little stock called Inhibitex (INHX). It turns out that over the weekend, that same company was purchased by BMY for $2.5bn (or $26 per share – more than double the closing print of $9.87 on January 6th). This won’t be the first time we have ‘helped’ Mary (Schapiro) and her little SEC lambs but it seems surprising that this would not generate at least an ‘alert’ when as Najarian so promptly pointed out on Friday – a total of 11,138 calls traded against only 937 puts with this call volume more than half the entire call trades of the month of December (when 19,000 calls changed hands). Friday’s call activity was more than 12 times average, with the $10 Feb Calls’ volume over 17 standard deviations above normal.

This isn’t the first time sizable call volume (green above versus put volume – red) has been seen but it is the most extreme example of the kind of well-informed trading that we have discussed again and again with regard healthcare specifically.

The largest trade that stuck out was the purchase of 2,000 Feb 10 calls for $2.00. Based on the BMY takeover price, these calls are now worth $16 ($26 minus the $10 call strike). That means the well-informed (lucky) owner turned $200,000 into $3,200,000 over the weekend.

While some of the action could potentially be discounted as front-running the JPMorgan Healthcare conference next week, we leave it to you to judge the option volume for itself: either the deal was leaked or the buyer of these calls had exceptional timing and is now considerably richer.

Charts: Bloomberg





On Trading Central Tendency

Courtesy of ZeroHedge. View original post here.

Submitted by Bruce Krasting.

It’s been about a week since the Federal Reserve announced its new policy of providing information to the public regarding the direction of US interest rates. The new policy is not, generally, a surprise. The Wall Street Journal’s Jon Hilsenrath told us something was coming weeks ago. I've been pondering whether this is a positive or a negative development. I’ve concluded that this step by the Fed will backfire and will  prove to be a mistake.

It’s tough to argue against a policy of more disclosure by the Fed. The members are a secretive bunch to begin with. Most people have a level of distrust of the Fed. More information about what they are doing and why, would be helpful. However, I believe the decision to provide more info has nothing to do with the Fed wanting to be more open and lovable. The Fed has taken this step in an effort to make its current policy decisions more effective.

I think any policy of the Federal Reserve should be designed to stand the test of time. It must be effective in all anticipated future conditions. The move by the Fed may well achieve the desired short-term objectives. Businesses, investors and individuals will have a greater degree of certainty regarding the future direction and timing of changes in interest rates. On balance, the additional information should have mildly positive consequences on new capital investments by companies, the process of capital formation in the markets, and it might allow individuals to make better long-term investment choices. What’s not to like?

The Fed currently publishes information regarding the thinking of the Fed members on both GDP and inflation (the SEP report). I was surprised to see that the revised report will now include a projection for the likely timing of the first rate hike. (This aspect of the Fed's release was not in the WSJ article.)

The 12 Fed governors will provide their estimates of when the first rate hike will occur. The top and bottom three will be excluded. The full range of estimates could, for example be from 2013 to 2016. But the narrow estimate would be more precise. It could be from June 2013 to June of 2014.

In the above example, the “Central Tendency” of the expectation for a change in…
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Interactive Comparison Of GDP: America vs The World

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Curious how the US, on a state by state basis, stacks up against the rest of the world, in terms of economic (and population) prowess? The following interactive graphic from the Economist should answer all questions about what state is equivalent to what country. With some surprises: as the Economist points out: “Who would have thought that, despite years of auto-industry hardship, the economy of Michigan is still the same size as Taiwan’s?” On the other hand Montana Grungeville being equal to Greece in GDP – that we could live with…

h/t Peter Eller





Investor Sentiment: Are Investors Rushing Towards the Edge of a Cliff?

Courtesy of ZeroHedge. View original post here.

Submitted by thetechnicaltake.

Last week, I stated that “higher prices should be supported by increasing number of bulls, and this would be a signal that a sustainable rally, that everyone so desperately wants, is unfolding.” So this past week, the SP500 gained about 1.6% and bullishness increased dramatically both in the Rydex data set and with the “dumb money” indicator. Yet, despite these positive developments to recruit more investors into the bullish camp, much work needs to be done. Volume is the probably the biggest issue, and the lack of volume means lack of investor conviction. So while there are more bulls, they are chasing prices higher with one hand already on the eject button. My data still suggests a mixed sentiment picture, and at this stage of the rally (relative to the time elapsed from the October lows), prices and bullish sentiment should have been much greater. The fact that the bulls have yet to take the reigns of this market suggests caution. These are still not the makings of a sustainable rally. This still looks like investors are rushing to the edge of a cliff as opposed to the promise land and nirvana of a bull market.





Vertex Announces Key 2012 Business Objectives as Company Prepares for Planned Global Launch of KALYDECO in Cystic Fibrosis

Courtesy of Benzinga.

Vertex Pharmaceuticals (NASDAQ: VRTX) announced Sunday its 2012 business objectives in conjunction with the 30th Annual J.P. Morgan Healthcare Conference in San Francisco. Matthew Emmens, Chairman, President and Chief Executive Officer of Vertex, and Jeffrey Leiden, M.D., Ph.D., who will become Vertex’s CEO on February 1, 2012, will discuss these objectives as part of a live presentation, which will be available on Vertex’s website, www.vrtx.com, on Monday, January 9 at 11:00 a.m. PT (2:00 p.m. ET).

“In 2011, our team executed a highly successful launch for INCIVEK in hepatitis C, with more than 25,000 people starting treatment since its approval in mid-2011,” said Mr. Emmens. “With the strength of the launch for INCIVEK, the submission of our global approval applications for KALYDECO in cystic fibrosis and the advancement of our pipeline programs, we are positioned for significant growth, earnings and cashflow in 2012.”

In December, Vertex announced that the U.S. Food and Drug Administration accepted the New Drug Application for KALYDECO and granted the company’s request for six-month Priority Review. A target review date of April 18, 2012 is set under the Prescription Drug User Fee Act for the FDA’s approval decision. Vertex’s marketing authorization application for KALYDECO has also been validated by the European Medicines Agency, which accepted Vertex’s request for accelerated assessment in Europe.


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





Sequenom Announces 2011 Operational Highlights and Early 2012 Outlook

Courtesy of Benzinga.

Sequenom (NASDAQ: SQNM) announced Sunday, highlights of the Company’s 2011 performance and accomplishments, as well as preliminary activities and goals for the first part of 2012.

Initial 2011 Performance Results Total revenue growth of approximately 23 percent year-over-year for 2011 (unaudited).

Over 21,000 total prenatal and retinal diagnostic tests were billed during the year.

Sales in the Genetic Analysis business segment were up approximately 6 percent from 2010 (unaudited), each quarter improving over the same period in the prior year.

Positive results following the October 2011 launch of Sequenom Center for Molecular Medicine’s (Sequenom CMM) MaterniT21 laboratory developed test:

The MaterniT21 LDT is now available for sale through Sequenom CMM in all 50 states in the U.S., including New York .

The Company received its first payments as an out-of-network provider from major commercial payors within the first billing cycle post-launch. At the close of the year, a new blood draw tube was introduced for the collection of MaterniT21 samples, allowing for blood to be drawn directly at a doctor’s office and shipped at ambient temperature.

“The accomplishments achieved in 2011, particularly in the last quarter with the launch and positive trajectory of the MaterniT21 LDT, are a reflection of the Company’s dedication to achieving our mission to deliver genetic analysis solutions to improve patient care,” said Harry F. Hixson, Jr , Ph.D., Chairman and CEO of Sequenom. “2011 was a year primarily dedicated to reaching our research and development goals, all of which we met. In 2012, our primary focus will be on effective commercialization with an emphasis on the MaterniT21 LDT.”

Looking forward to 2012, Sequenom CMM will continue to expand commercialization of the MaterniT21 LDT, among its other offerings. The laboratory has established an internal corporate goal of billing a minimum of 25,000 MaterniT21 tests this year, while increasing the sales force head count for the diagnostics business to more than 50 active field sales representatives. In addition, study results determining the accuracy of the MaterniT21 LDT in detecting two additional fetal abnormalities, Trisomy 13 and Trisomy 18, are scheduled to be published in a peer-reviewed journal during the first quarter of this year.


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





2012 – The Year Of Living Dangerously

Courtesy of Jim Quinn of The Burning Platform

2012 – The Year Of Living Dangerously

“In retrospect, the spark might seem as ominous as a financial crash, as ordinary as a national election, or as trivial as a Tea Party. The catalyst will unfold according to a basic Crisis dynamic that underlies all of these scenarios: An initial spark will trigger a chain reaction of unyielding responses and further emergencies. The core elements of these scenarios (debt, civic decay, global disorder) will matter more than the details, which the catalyst will juxtapose and connect in some unknowable way. If foreign societies are also entering a Fourth Turning, this could accelerate the chain reaction. At home and abroad, these events will reflect the tearing of the civic fabric at points of extreme vulnerability –  problem areas where America will have neglected, denied, or delayed needed action.” – Strauss & Howe – The Fourth Turning - 1997

  

In December 2010 I wrote an article called Will 2012 Be as Critical as 1860?, that pondered what might happen with the 2012 presidential election and the possible scenarios that might play out based on that election. Well, 2012 has arrived and every blogger and mainstream media pundit is making their predictions for 2012. The benefit of delaying my predictions until the first week of 2012 is that I’ve been able to read the wise ponderings of Mike Shedlock, Jesse, Karl Denninger, and some other brilliant truth seeking analysts regarding what might happen during 2012. The passage above from Strauss & Howe was written fifteen years ago and captured the essence of what has happened since 2007 and what will drive all the events over the next decade. Predicting specific events is a futile human endeavor. The world is so complex and individual human beings so impulsive and driven by emotion, that the possible number of particular outcomes is almost infinite.

But, as Strauss and Howe point out, the core elements that created this Crisis and the reaction of generational cohorts to the implications of debt, civic decay and global disorder will drive all the events that will occur in 2012 and for as far as the eye can see. Linear thinkers in mega-corporations, mainstream media and Washington D.C. focus on retaining the status quo, their power and their wealth. They believe an economic recovery can be manufactured through…
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Some ETFs Are Hot, Some Are Not (IAT, ITB, IYH, SLV, EWI)

Courtesy of John Nyaradi.

Some ETFs Are Hot, Some Are Not (IAT, ITB, IYH, SLV, EWI)
Some ETFs are hot and some are not as we enter 2012

A famous stock market axiom says that “a rising tides lifts all boats,” however, in markets like today’s bifurcated environment, vast differences of performance and risk can exist among various sectors and ETFs.

Hot ETFs:

iShares Dow Jones Regional Bank Fund (NYSEARCA:IAT) has gained 7.9% over the last four weeks.  Major holdings include US Bancorp (NYSE:USB) PNC Financial Services (NYSE:PNC) and SunTrust (NYSE:STI)  The banking sector has been bolstered in recent weeks by improving economic reports from the United States and growing sentiment that the European debt crisis might be successfully brought under control.  Also, Federal Reserve support for the endangered housing industry has added strength to the financial sector.  After coming off lows set in December, the index (NYSEARCA:IAT) has vaulted through both its 50 day and 200 day moving averages.

iShares Dow Jones U.S. Home Construction (NYSEARCA:ITB) up 4.6% over the last four weeks. Major holdings include DR Horton, (NYSE:DHI) Lennar (NYSE:LEN) and Toll Brothers (NYSE:TOL) and the ETF seeks to track the Dow Jones U.S. Select Home Construction Index. The sector has experienced recent strength on the hopes for more help for the housing industry and recent improvements in sales, home construction and building permit numbers.  Lennar reports earnings on January 11th and analysts estimate 6% earnings improvement over this time last year.  On a technical basis, the home construction ETF (NYSEARCA:ITB) is above both its 50 and 200 day moving averages and so is in bull market territory.

iShares Dow Jones U.S. Health Care (NYSEARCA: IYH) has gained 4.8% over the last four weeks. Designed to track the U.S. Healthcare Index, (NYSEARCA:IYH) has major holdings in Merck, Pfizer and Johnson and Johnson.  Merck recently reached new highs in its stock and the healthcare sector is generally seen as a defensive play during difficult times when investors are looking for dividends and stable holdings.  The technical picture is also very strong here as the sector comes off its early December lows.

Not Hot ETFs:

On the other end of the spectrum, investors are having less fun with positions in ETFs and sectors that have been suffering as of late.

iShares Silver Trust (NYSEARCA:SLV) has tumbled 12.6% in the last thirty days and is in a bear market configuration from a technical standpoint. Both silver and gold have…
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Chart School

Moving Averages: Month-End Preview

Courtesy of Doug Short.

Here is an advance preview of the monthly moving averages I track after the close of the last business day of the month. At this point, before the open on the last day of the month, three S&P 500 strategies are now signaling "invested" -- unchanged from last month. Two of the five of the Ivy Portfolio ETFs, Vanguard FTSE All-World ex-US ETF (VEU) and PowerShares DB Commodity Index Tracking (DBC), are signal "cash" -- also unchanged from last month.

If a position is less than 2% from a signal, it is highlighted in yellow.


Note: My inclusion of the S&P 500 index updates is intended to illustrate a popular moving moving-average timing strategy. The index signals also give...



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Zero Hedge

In Denmark You Are Now Paid To Take Out A Mortgage

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

With NIRP raging in the Eurozone and over €1.5 trillion in European government bonds trading with negative yields, many were wondering when any of this perverted bond generosity will spill over to other debtors, not just Europe's insolvent governments (who can only print negative interest debt because of the ECB's backstop that it will buy any piece of garbage for sale in the doomed monetary union). In fact just earlier today we, rhetorically, asked a logical - in as much as nothing is logical in the new normal - question: 

Who will offer the first negative rate mortgage

...

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Phil's Favorites

Looks Like I'll Be Able To Retire Comfortably At Age 91

Courtesy of Charles Hugh-Smith of OfTwoMinds

You've probably seen articles and adverts discussing how much money you'll need to "retire comfortably." The trick of course is the definition of comfortable. The general idea of comfortable (as I understand it) appears to be an income which enables the retiree to enjoy leisurely vacations on cruise ships, own a well-appointed RV for tooling around the countryside, and spend as much time on the golf links as he/she wants.

Needless to say, Social Security isn't going to fund a comfortable retirement, unless the definition is watching TV with an box of kibbles to snack on.

By this definition of retiring comfortably, I should be able to retire at age 91--assuming I can work another 30 years and the creek don't rise.

Since I earned my first real Corporate America paycheck at 1...



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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

In the News: An ETF Rush to Bet on Insiders

Courtesy of Sabrient Systems and Gradient Analytics

(ETFTrends.com by Todd Shriber): "Betting on insider buying is again proving to be an efficacious strategy as the Direxion All Cap Insider Sentiment Shares (NYSEArca: KNOW) has been noticeably less bad than the S&P 500 to start 2015. Add to that, investors are warming to the merits of KNOW's insider sentiment strategy." [Editor's note: KNOW tracks the Sabrient Multi-cap Insider/Analyst Quant-Weighted Index (SBRQAM)]. Read article

...

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Market Shadows

What Would You Do?

What Would You Do?

Courtesy of Paul Price

Suppose you had the technical ability and raw materials to print up counterfeit dollars, euros or yen that were identical to the real things. Assume you could spend them as fast as you could create them with no fear of any repercussions.

Would you prudently print up only as much fresh currency as you needed for your current lifestyle? Would you create just a bit more than that to help relatives or those in need?

It is most likely you’d have your printing press running 24 hours a day, seven days a week. Becoming the richest person in the world would confer great power upon you.

You could rationalize this action because you plan to use the money for good purposes. Imagine the warm feeling you’d get by giving every person in America one million do...



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OpTrader

Swing trading portfolio - week of January 26th, 2015

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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Digital Currencies

Jitters After Bitcoin Exchange Suspends Services

So as I was saying yesterday (Bitcoin: The Biggest Clown Show In History?), Bitcoin has several obstacles on the path to potential success as an alternative currency. But I forgot to mention hacking and theft at Bitcoin exchanges and other technical problems. This is related to the lack of government backing and the fact that the value of Bitcoins is based entirely on confidence.  

Jitters After Bitcoin Exchange Suspends Services 

By 



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Pharmboy

2015 - Biotech Fever

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

PSW Members - well, what a year for biotechs!   The Biotech Index (IBB) is up a whopping 40%, beating the S&P hands down!  The healthcare sector has had a number of high flying IPOs, and beat the Tech Sector in total nubmer of IPOs in the past 12 months.  What could go wrong?

Phil has given his Secret Santa Inflation Hedges for 2015, and since I have been trying to keep my head above water between work, PSW, and baseball with my boys...it is time that something is put together for PSW on biotechs in 2015.

Cancer and fibrosis remain two of the hottest areas for VC backed biotechs to invest their monies.  A number of companies have gone IPO which have drugs/technologies that fight cancer, includin...



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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 user name and password. 

 

...

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Option Review

SPX Call Spread Eyes Fresh Record Highs By Year End

Stocks got off to a rocky start on the first trading day in December, with the S&P 500 Index slipping just below 2050 on Monday. Based on one large bullish SPX options trade executed on Wednesday, however, such price action is not likely to break the trend of strong gains observed in the benchmark index since mid-October. It looks like one options market participant purchased 25,000 of the 31Dec’14 2105/2115 call spreads at a net premium of $2.70 each. The trade cost $6.75mm to put on, and represents the maximum potential loss on the position should the 2105 calls expire worthless at the end of December. The call spread could reap profits of as much as $7.30 per spread, or $18.25mm, in the event that the SPX ends the year above 2115. The index would need to rally 2.0% over the current level...



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Help One Of Our Own PSW Members

"Hello PSW Members –

This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible.  Feel free to contact me directly at jennifersurovy@yahoo.com with any questions.

Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts.  After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.)  Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.

http://www.youcaring.com/medical-fundraiser/help-get-shadowfax-out-from-the-darkness-of-medical-bills-/126743

Thank you for you time!




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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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