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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

Deutsche Bank: "If The Fed Stick To Their Script Then The Market Could Be In For A Small Shock"

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

The only preview you need of today's first FOMC statement for 2015, one which has already cornered Yellen as any additional USD strength from here on out will certainly be economy and S&P500 negative, and who as Deutsche summarizes is damned if she does, and damned if she doesn't, and that as Jim Reid politely puts it, "something will have to give at some point."

From DB's Jim Reid:

One wonders how careful the Fed will be in 2015. We may get some early clues today after the conclusion of the first FOMC meeting of the year. This meeting isn’t going to see the release of the Fed’s Summary of Economic Projections, nor a press conference but nevert...



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Phil's Favorites

Clash Over Sanctions: Syriza Opposes Sanctions on Russia, Calls Them "Neocolonial Bulimia"; Negotiation Rules

Courtesy of Mish.

The Blowout Victory of Syriza has taken on some new meaning outside of Grexit possibilities.

Please consider Greeks Rebuff EU Call for More Russia Sanctions.
A spokesman for the ruling coalition of Alexis Tsipras, prime minister, said Greece had not approved a statement from EU heads of government that asked their foreign ministers to review further sanctions in response to the latest flare-up of violence in eastern Ukraine, blamed by the US and most European nations on Russian-backed separatists.

The Greek statement raised questions over whether the new government, led by the radical leftist Syriza party, would s...



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Chart School

RTT browsing latest..

Courtesy of Read the Ticker.

Please review a collection of WWW browsing results.Date Found: Tuesday, 13 January 2015, 01:43:37 PM

Click for popup. Clear your browser cache if image is not showing. Comment: Ouch! See the last point of demand between $60 and $70 In Dec at resistance, now strong selling, Large pattern forecast sees a price under $40

Date Found: Tuesday, 13 January 2015, 06:54:16 PM

Click for popup. Clear your browser cache if image is not showing. Comment: Coffe ETF bounces off support, minor spring, if get some strength to $40, a trade may be on!

Date Found: Friday, 16 January 2015, 02:28:29 AM

Click for popup. Clear your browser cache if image is not showing. ...



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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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Insider Scoop

Morgan Stanley Asks, 'What's Driving Gold?'

Courtesy of Benzinga.

Related GLD Jim Cramer Shares His Thoughts On Gold, Kinder Morgan And Dollar Tree Mike Khouw Sees Bullish Options Activity In SPDR Gold Trust Making Money With Charles Payne: 11/13/14 (Fox Business)

While other commodity prices have further softened recently, Gold rallied – rising from December low of $1,174/oz. to touch $1,300/oz. Joel Crane, an analyst at Morgan Stanley, expressed pessimism that...



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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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Sabrient

Sector Detector: With the Fed fading into shadows, investors look overseas for new catalysts

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

Courtesy of Sabrient Systems and Gradient Analytics

By Scott Martindale

Last week, the S&P 500 put an end to its streak of weekly losses, despite giving back some gains on Friday. Thursday provided the big catalyst, with the ECB’s announcement of its bold new monetary stimulus plan. Investors were cheered and soothed for the moment. And U.S. fundamentals still look strong. But with Greece trying to turn back time, with volatility elevated (and likely to continue as such), and with the technical situation still dicey, the near term outlook is still worrisome.

In this weekly update, I give my view of the current market environment, offer a technical analysis of the S&P 500 chart...



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Market Shadows

Are You Trading or Gambling?

ARE YOU TRADING OR GAMBLING?

An interview with John Ehlers of Stock Spotter and Mesa Software

By Ilene

Ilene: John, in our last discussion about trading systems in general and yours in particular (Can trading be reduced to cycles, stresses and vibrations?) you mentioned Monte Carlo simulations and their use in measuring performance. Can you explain more about how you measure the performance of a trading system?

John: Let's start with comparing trading with gambling. The two have several things in common.  In both ...



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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 

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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

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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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