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phil

Good morning!

Things are looking up so far (so that's my prediction, StJ – 8) ) as Turkey jackboots their way to stability.  

The Nikkie popped a lovely 300 points over 13,200 (oops, so I guess I already did say up at 4:09) despite the fact that the Yen barely made 97 before getting pushback (now  96.63).  The Dollar's at 81.43 and the Euro couldn't hold $1.33 (now $1.328) but the Pound is way up at $1.567 so could go either way on the Buck.  I'd take the money and run on /NKD if you haven't already (+$1,500) as I think this is it for the pre-market run (goes for all indices).  

Oil is $95.44 and can't get over $95.50 so far (a line we can play short on /CL), gold is $1,376 despite the sheeple being stampeded out of stocks by the WSJ:

[image]

Silver hit $21.28 but failed there, copper with a big move from $3.17 to $3.23 but now $3.22 , nat gas going nowhere are $3.72 and gasoline being kept around $2.815 for as long as they can.  Meanwhile, the FT becomes the first publication to finally realize the VELOCITY of money is what's killing us (my first day lecture at the AC Conference), not the supply:

Want proof that monetary policy has reached the limits of its effectiveness? Look no further than the money multiplier, says BofA, whose research team amusingly notes that at 0.8, the M1 multiplier is "really a divisor." With the relevance of monetarist channels in decline, "it's all about fiscal policy now," says FT's Izabella Kaminska. 

The channel through which money creation is expected to stimulate the economy is credit creation. However, not only has the money multiplier process broken down, but the linkages from money growth to credit growth are at best very limited, as Chart 2 reveals. Since the end of the Volcker disinflation, the correlation between year-on-year growth of M2 and credit (measured here as loans and leases by banks) is just 0.13%. Bank lending arguable is soft now relative to historical trends because both loan supply and demand are restrained — albeit gradually improving. High lending standards and regulatory uncertainty hold back supply, while slow growth, deleveraging and depressed collateral values keep demand low.

You can print infinite amounts of money but the practice of then giving that money to Banksters and the top 1% who use it only to create more wealth for themselves and don't "trickle down" to the bottom 90% gives you infinity times zero and your economy still sucks.  Only when money makes it to the bottom 80% through job growth (300,000 – 400,000 a month, not 175,000, which barely keeps up with population growth), building and wage inflation can you have an expanding economy.  Finally the FT gets it – let's hope some of our "leaders" begin to as well. 

Same goes for Japan:

Although the chances are good that "the current economic upswing [will] gather further pace" in Japan, policies designed to alter demographic trends and boost the labor force participation rate are "unlikely to have a significant impact on economic growth," Credit Suisse says. As for boosting inflation, "there are a number of reasons to doubt that the BOJ … will achieve its target." The good news: Fears that inflation expectations combined with institutional selling could trigger a government bond (JGBLJGBTJGBSJGBD) crisis are "probably exaggerated." 

If all we do this morning is test 15,200 from the bottom on the Dow and 9,280 on the NYSE (weak bounce lines) and then fail those – that's going to be bearish so we'll key off those moves early on.  

Wednesday's economic calendar:
7:00 MBA Mortgage Applications
10:30 EIA Petroleum Inventories
1:00 PM Results of $21B, 10-Year Bond Auction
2:00 PM Treasury Budget
 

Japanese shares (EWJ) have had another volatile day, falling as much as 2.4% before rebounding to close a mere -0.2%. European stocks (FEZ) have recovered a bit of poise after two days of declines, as has the dollar-yen rate (FXY), which is +0.75%. But the continuing theme of uncertainty about central bank stimulus is keeping markets on edge. Hong Kong and China closed. India -0.2%. EU Stoxx 50 +0.2%, London flat, Paris +0.2%, Frankfurt +0.1%, Madrid+0.65%, Milan +0.1%.

Japan's core machinery orders fell for the first month in three in April, dropping 8.8% on month vs +14.2% in March and consensus of -8.5%. On year, orders -1.1% vs +2.4% and -4.8%. The figures, which are a leading but volatile indicator of capex, show that companies are still reluctant to spend despite the government's and BOJ's stimulus policies. (PR)

The U.K.'s market supervisor, the Financial Conduct Authority, is reportedly considering opening an investigation into the alleged manipulation of WM/Reuters benchmark foreign-exchange rates, which are used to fix the value of trillions of dollars of investments. In a daily practice that has been continuing for at least a decade at major banks, traders front-run client orders and rig the rates by "pushing through trades before and during the 60-second windows when the benchmarks are set."

As expected, U.K. unemployment comes in at 7.8% in February-April, unchanged from November-January. The number of unemployed fell 5,000 to 2.51M. Inactivity rate +0.1 percentage point to 22.4%. Average weekly earnings excluding bonus in April +0.9% vs +0.8% prior and consensus of +0.7%. Claimant count -8,600 vs -11,800 and -5,000. Claimant count rate unchanged at 4.6%, as forecast. (PR)

First cut is the deepest:  MSCI has cut Greece's classification to emerging market from developed market, making the country first to suffer such a demotion. MSCI attributed the move to Greece not meeting requirements related to securities borrowing and lending facilities, short selling, transferability and stock-index size. MSCI's decision follows similar action from Russell Investments in March.

Eurozone industrial production +0.4% on month in April vs +0.9% in March and consensus of -0.2%. On year, output -0.6% vs -1.4% and -1.2%. The highest increases in April were in Ireland (+3%) and France (+2.3%) and the sharpest declines were in Finland (-5.1%), the Netherlands (-4.3%) and Portugal (-3.6%). (PR)

Illinois had to pay a premium on the sale of a $600M 10-year sales-tax backed bond yesterday, with the yield of 2.94% 0.75 percentage point higher than triple-A-rated debt on a benchmark scale. The auction came after Fitch and Moody's downgraded Illinois last week due to its inability to address its growing unfunded pension liabilities. Next week, the state legislature is scheduled to hold a special session over the crisis, while in two weeks, Illinois is due to auction a $1.25B bond

Boeing's (BA) 787 jet has been hit by yet another glitch, with All Nippon Airways scrapping an internal Japanese flight after one of the engines failed to start. The cancellation is the third this week after Dreamliner services were recently renewed following a four-month grounding. Still, at least it appears that the battery wasn't the problem.

Wages going the other way at CAT:  Caterpillar's (CAT) United Steelworkers employees have ratified a new six-year labor contract in what was described as a "very close" vote. The deal will freeze hourly wages for current staff for the lifetime of the agreement and pay new hires less. However, Caterpillar will hand out bonuses of $4,000 per worker in return for approving the contract, and it will pay veteran employees annual bonuses based on the performance of the company.

Amgen's (AMGN) blockbuster Enbrel drug for treating rheumatoid arthritis, which generated sales of $4.23B last year, is no more effective than a combination of three generic treatments, a study shows. While a regimen that includes Enbrel costs $25,000 a year per patient, the "triple therapy" costs just $1,000. The research didn't examine similar drugs from AbbVie (ABBV) or Johnson & Johnson (JNJ), although many doctors consider them to be equivalent to Enbrel. Despite the study, researchers feel that the branded treatments might be too well ensconced to be quickly replaced.

Institutional Shareholder Services has recommended that Sprint's (S) shareholders back SoftBank's (SFTBF.PK) latest $21.6B offer for 78% of the U.S. carrier. The proxy advisory firm also supported the Japanese company's $20.1B offer for 70% of Sprint. ISS ascribed its latest recommendation to the lack of other "firm competing bids" and improved terms. Dish (DISH) might have something to say about the first point, while Janco's Gerard Hallaren would disagree with the latter.

Vodafone (VOD) shares are -4.7% in London after its stock went ex-dividend today and following the company's confirmation that it is interested in acquiring Kabel Deutschland (KBDHY.OB). Vodafone has reportedly offered €10B for the German cable operator, whose shares are +7.4% in Frankfurt. That gives it a market cap of €7B.

    June 12th, 2013 at 5:58 am



 



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Zero Hedge

Eurogroup Agrees To Disburse €7.5BN To Greece Which Will Be Used To Repay Creditors

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Once upon a time, markets trembled when Greek bailout implementation headlines were announced, which is what just happened if slightly ahead of our forecast schedule...

Kazimir Says Eurogroup Meeting Won’t Be an Easy One: translation - Greece will agree to everything some time around 4am

— zerohedge (@zerohedge) May 24, 2016

... and this time nobody cares. Well maybe the Greeks do, ...



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Chart School

March Real Disposable Income Per Capita Rises Again

Courtesy of Doug Short's Advisor Perspectives.

With the release of today's report on March Personal Incomes and Outlays we can now take a closer look at "Real" Disposable Personal Income Per Capita.

The first chart shows both the nominal per capita disposable income and the real (inflation-adjusted) equivalent since 2000. This indicator was significantly disrupted by the bizarre but predictable oscillation caused by 2012 year-end tax strategies in expectation of tax hikes in 2013.

At two decimal places, the nominal 0.31% month-over-month increase in disposable income comes in at 0.26% when we adjust for inflation. The year-over-year metrics are 3.20% nominal and 2.35% real.

...



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Phil's Favorites

Elites vs. Too Much Democracy: Andrew Sullivan's Afraid of Popular Self-Government

 

Elites vs. Too Much Democracy: Andrew Sullivan’s Afraid of Popular Self-Government

By

This post first appeared on BillMoyers.com.

British expatriate writer Andrew Sullivan recently returned to the public eye with a piece that has aroused considerable comment, some of it reasonably on point, ...



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ValueWalk

Wilbur Ross discusses Donald Trump's candidacy, and his investing strategy

By Jacob Wolinsky. Originally published at ValueWalk.


Wilbur Ross discusses Donald Trump’s candidacy, and his investing strategy

The post Wilbur Ross discusses Donald Trump’s candidacy, and his investing strategy appeared first on ValueWalk.

Sign up for ValueWalk's free newsletter here.

...

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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

Global Stocks Broadly Higher, Reversing Early Losses (Wall Street Journal)

Global stocks climbed Tuesday, while the dollar strengthened against the euro and yen.

Shares, dollar climb as markets play Fed waiting game (Reuters)

European shares were heading for their best day in over a month on Tuesday as the waiting game to see whether the U.S. raises interest rates again next month sent the euro to its lowest since March.

Asian shares had stumbled to near 2-1/2-month lows ove...



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OpTrader

Swing trading portfolio - week of May 23rd, 2016

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

 

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

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

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

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



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Kimble Charting Solutions

Gold- Two-thirds odds prices fall on a support break

Courtesy of Chris Kimble.

CLICK ON CHART TO ENLARGE

Since the peak in 2011, Gold remains in a downtrend, creating a series of lower high and lower lows.

Gold’s rally in 2016 is attempting to break this 5-year falling trend, as it is attempting to break a series of lower highs.

Over the past 6-months, Gold could be creating a rising wedge pattern. This pattern two-thirds of the time, suggests lower prices are ahead.

...

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Digital Currencies

The Biggest Bitcoin Arbitrage Ever?

Courtesy of Chris at CapitalistExploits

Do you remember when you were growing up and all your friends were allowed Atari game consoles but you weren’t?

Well, I do and the things seemed as foreign to me as Venus. Mostly because the little time I managed to spend on the gaming consoles when my friends weren’t hogging them I found it all a bit silly. I never “got” computer games, and to this day still have poor comprehension of things like Angry Birds.

I suspect that many people around the world view Bitcoin in the same way as I view Angry Birds: with mild amusement and a general lack of understanding as to what the hell all the fuss is about.

I was thinking of this since a buddy of mine recently started ...



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All About Trends

Mid-Day Update

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

Click here for the full report.




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

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Biotech

This Is Why Biotech Stocks May Explode Again

Reminder: Pharmboy and Ilene are available to chat with Members.

Here's an interesting article from Investor's Business Daily arguing that biotech stocks are beginning to recover from their recent declines, notwithstanding current weakness.

This Is Why Biotech Stocks May Explode Again

By 

Excerpt:

After a three-year bull run that more than quadrupled its value by its peak last July, IBD’s Medical-Biomed/Biotech Industry Group plunged 50% by early February, hurt by backlashes against high drug prices and mergers that seek to lower corporate taxes.

...



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Mapping The Market

About that debate last night

Although we try to stay focused on finding and managing promising trade ideas, the comments in the comment section sometimes take a political turn (for access, try PSW — click here!). So today, Jean Luc writes,

The GOP debate last night was just unreal – are these people running to be president of the US or to lead a college fraternity! Comparing tool size? The only guy that looks semi-sane is Kasich. The other guys are just like 3 jackals right now. 

And something else – if Trump is the candidate, that little Romney speech yesterday is probably already being made into a commercial. And all these little snippets from the debate will also make some nice ads! If you are a conservative, you have to be scared now. 

Phil writes back,

I was expecting them to start throwing poop at each other &n...



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Promotions

PSW is more than just stock talk!

 

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

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

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

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



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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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