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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:


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

The United States Of Refugees

Courtesy of ZeroHedge. View original post here.

Submitted by Ben Christopher via,

Consider the state of Nebraska. What comes to mind?

Common associations with the Cornhusker state include: row crops, silos, college football, Warren Buffet, and wholesome, earnest Americana.

Now try this one: Refugee Capital of the United States.

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Another Health Care Chart Looks Sick


Another Health Care Chart Looks Sick

Courtesy of Dana Lyons

A popular pharmaceutical ETF is testing its (ill-fated?) post-2009 bull market trendline.


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Blind Capital

By BroyHill. Originally published at ValueWalk.

According to Morningstar, the average US equity manager, has underperformed the S&P 500 Index over the past one, three and five years. Given investors natural tendency to chase what’s working, and ditch what’s not, “the death of active management” is becoming a popular consensus sentiment.

Before writing off active management and jumping on the index fund bandwagon, investors would be well served to pause and reflect.  Might this be a cyclical phenomenon?  If so, when have we seen this in the past?  And most importantly, how did it play out last time?  Spoiler alert: yes, this is cyclical; yes, we have seen this in the past; no, it didn’t turn out so hot for overvalued indices overweighted in overvalued large caps.

Ed Chancellor’s ...

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Crude Rally May Clinch Top Stock Market Status for Canada in ’16 (Bloomberg)

Gold’s best run since 2010 pushed Canadian equities to the top spot among developed-market stocks this year. Fifty dollar crude will give them an opportunity to stay there.

Would Cutting Corporate Tax Rates Really Grow the Economy? (The Atlantic)

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Kimble Charting Solutions

Bio-Tech; In more trouble if this fails, says Joe Friday

Courtesy of Chris Kimble.

At one point in time, actually for years, Bio-Tech (IBB) was a market leader. From the 2009 lows to 2015, IBB out gained the S&P by more than 250%. Since the summer of 2015, Bio Tech has remained a leader, a “downside leader!” IBB has lagged the S&P by over 35% in the past 15-months.

Is the downside leadership over for IBB? Below updates the pattern on IBB


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Mini-Bearish Wedges in Lead Markets

Courtesy of Declan.

The last few days have seen little movement in key markets. The one potential development to look to resolve tomorrow or Monday are rising wedges in certain markets. The advantage bulls have is that if markets can push above wedge highs (which are close), shorts will be squeezed in a buying scramble.

The S&P has a created a small, rising wedge off a larger rising wedge from September. The 20-day and 50-day MAs lend additional overhead resistance as does higher volume distribution for the index today (although the trading range for the day was very narrow).


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Members' Corner

The Orlando Massacre Part 3

Courtesy of Nattering Naybob.

A continuation of a Naybob of IT's Natterings from Part 1 and Part 2...

While many Christian churches expressed grief and offered free funeral services for the victims of the Orlando shooting, the fundamentalist Westboro Baptist Church held an anti-gay protest during the funeral of the victims.

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Swing trading portfolio - week of October 17th, 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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The Most Overlooked Trait of Investing Success

Via Jean-Luc

Good article on investing success:

The Most Overlooked Trait of Investing Success

By Morgan Housel

There is a reason no Berkshire Hathaway investor chides Buffett when the company has a bad quarter. It’s because Buffett has so thoroughly convinced his investors that it’s pointless to try to navigate around 90-day intervals. He’s done that by writing incredibly lucid letters to investors for the last 50 years, communicating in easy-to-understand language at annual meetings, and speaking on TV in ways that someone with no investing experience can grasp.

Yes, Buffett runs an amazing investment company. But he also runs an amazing investor company. One of the most underappreciated part of his s...

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Gold, Silver and Blockchain - Fintech Solutions To Negative Rates, Bail-ins, Currency Debasement and Cashless

Courtesy of ZeroHedge. View original post here.

By Jan Skoyles

I was so pleased yesterday by the announcement that I have joined the Research team at GoldCore as it meant that I could finally start talking about it and was back in a role that lets me indulge in my passion by researching and geeking out on all things gold, silver and money.


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Epizyme was founded in 2007, and trying to create drugs to treat patient's cancer by focusing on genetically-linked differences between normal and cancer cells. Cancer areas of focus include leukemia, Non-Hodgkin's lymphoma and breast cancer.  One of the Epizme cofounders, H. Robert Horvitz, won the Nobel Prize in Medicine in 2002 for "discoveries concerning genetic regulation of organ development and programmed cell death."

Before discussing the drug targets of Epizyme, understanding epigenetics is crucial to comprehend the company's goals.  

Genetic components are the DNA sequences that are 'inherited.'  Some of these genes are stronger than others in their expression (e.g., eye color).  Yet, some genes turn on or off due to external factors (environmental), and it is und...

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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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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! 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.   

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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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