Author Archive for ilene

Japan CPI Back Below Zero, Shares Rally Expecting More Stimulus

Courtesy of Mish.

Japan’s “Core CPI” excluding food, fell two months straight. It’s back again below zero again.

Economists expect more stimulus, and Japanese equities are once again in rally mode.

Have any of these economic illiterates ever considered that stimulus is the problem, not the solution?

Back Below Zero

back below zero

Please consider Japan CPI Falls 0.3%, Raising Pressure for More BOJ Stimulus.

Japan’s consumer prices dropped for a second month as central bank Governor Haruhiko Kuroda struggles to spur inflation with record asset purchases and negative interest rates.

Consumer prices excluding fresh food fell 0.3 percent in April from a year earlier, after dropping by the same amount in March, according to a statistics bureau report on Friday.

“Japan’s inflation is going to remain weak,” said Takashi Shiono, an economist at Credit Suisse Group in Tokyo. “If you look at economic and price fundamentals, the BOJ has to ease further soon.” Shiono, who correctly forecast the 0.3 percent drop, cited low energy prices as a key drag on inflation.

“Has to Ease”

Can anyone make a case why Japan “has to ease”?

Continue reading here…

Peak Petro-State – The Oil World In Chaos

Courtesy of Michael Klare at TomDispatch

One small aspect of a trip I took to El Paso, Texas, back in the 1970s remains in my mind: the weather.  No, not the weather in El Paso, which is more or less the same much of the year, but the weather on the local television news.  I remember watching a weatherman begin his report in — of all places at the time — the Persian Gulf and sweep swiftly and dramatically across the globe (and its various weather perturbations) before finally reaching El Paso where things were, of course, predictably hot and dull.  It might have been my earliest introduction to the charms of the weather to television news, which could be summed up this way: plenty of drama — storms, floods, droughts, fires, wrecked homes, weeping survivors, shipwrecked people — and no politics to muck things up.  Just Ma Nature, just The Weather!

What was then a strange phenomenon on one city’s news has since become the definition of all TV news.  At this point who hasn’t watched countless weather reporters struggling against the slashing winds and driving rain of some oncoming hurricane while shouting out commentary or heading into the waters of what had only recently been a town or city in the hip waders that are now requisite gear for flood coverage?

Only one problem: climate change threatens to screw up the formula.  That phenomenon has complicated weather coverage by inserting human (that is, fossil fuel) politics where only the periodically awesome destructive power of nature and raw human emotion once were.  All too often, bad weather may now be traced back, at least in part, to our endless burning of fossil fuels.  On the whole, however, onscreen news coverage continues to ignore that reality even as it features the weather ever more prominently.  In a sense, the news has been coopting climate change.  A small sign of this is the way the tag “extreme weather” has become commonplace as reports of floods ravaging the Southwest, fires the West, and tornadoes the South and the Great Plains proliferate.  Extreme weather, in other words, has gained its place in our consciousness largely shorn of the crucial factor in that extremity: the increasing amounts of greenhouse gases humanity has been dumping into…
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It`s A Technological Arm`s Race (Video)

Courtesy of EconMatters

I have made some changes to my Trading Rig Configuration to account for more Natural Gas Trading, the US Dollar Index, the VIX and Bonds. Weekly Trading Webinar – 05-25-16

During the Live Trading Webinar, we shorted the Nikkei (/NKD) Futures at the 17,000 line, and we made a live $525 gain on /NKD along with another $580 on our Natural Gas (/NG) Futures longs. Making over $1,000 in a 2-hour webinar (plus another $110 on the Dow shorts) was plenty to lock in at the time! Weekly Trading Webinar – 05-25-16

Don't miss next week's webinar in real-time. Get LIVE access to Phil's Weekly Webinars by joining us at Phil's Stock World — click here!

Major Topics:
00:02:30 AAPL stock, Trade Ideas, Long -Term Portfolio
00:08:40 Long-Term Portfolio: Trade Ideas
00:22:00 Checking on the Markets: NG, NKD, DOW,
00:25:36 Impact on Dollar inflation
00:29:54 Brexit, Rate hike in June
00:33:00 Spike result
00:33:45 SQQ calls
00:34:10 Futures Trade
00:36:14 Re-Invest in Dividends
00:37:33 SPX
00:42:30 TSLA: Gigantic Ponzi Scheme
00:44:32 TGT, HPQ, Short-Term Portfolio
00:49:54 Inflation is good for gold?
00:54:40 Low Rates
00:55:20 Checking on markets
00:56:05 Self-Driving Cars
01:01:52 Bullish on Gold or Nugget
01:01:28 RIO
01:02:36 FCX
01:03:16 Selling puts: The stock drops below the stike price. Now what? Buy the stock, roll the puts, or just get out? If the stock is AAPL, your approach would likely be different than if the stock was VRX. 
01:06:30 Biotechs, printing organs, game-changing technlogy. Will we be able to 3-print a person, like in Star Trek?
01:10:45 Dollar – Upward pressure. 
01:12:52 Oil report this morning – Mixed. 
01:15:45 Oil, Natural Gas contracts
01:15:57 Checking on energy trades, Nikkei (NKD), Dollar (DX)
01:19:25 Brent crude oil – will it punch through $50? Don't just trade on technical factors. Evaluate the whole situation. 
01:21:45 If the DX goes down that is bad for the NKD. DX down, Yen up… 
01:22:25 Manipulation in the oil market will never stop. It's all BS but it's a game we all agree to play. 
01:25:30 Futures. Example of Phil taking a big loss on oil when something blew up.
01:31:10 DX, NKD, currencies and risks.
01:34:45 SDS (SDS reflects S&P 500, subject to decay).  
01:36:56 Digital Currencies – We're on Scandal-Watch, but Phil likes Greenbank Capital. It's important to get in a Ponzi scheme early!
01:43:50 TWTR
01:45:39 Checking on the Market
01:46:38 Hedges

We Need New Labels: I Propose “100% Robot Made”

Courtesy of Mish.

Yesterday, Apple’s iPhone maker, Foxconn announced an immediate cut of 60,000 workers to be replaced by robots.

Today, Adidas announced the first ever 100% robot-made shoe.


Deutsche Welle, Germany’s international broadcaster, reports Adidas Shoe Manufacturing Will Return to Germany.

That’s the good news. For manufacturing job seekers, the bad news is the shoes will be 100% robot made.

100% Robot

Your next pair of Adidas shoes may be put together by robots – the German sports retailer has said it will start selling its first robot-produced shoes in a new, state-of-the-art factory in its home market starting 2017.

The announcement came as Adidas unveiled its prototype “Speedfactory”, a state-of-the-art, 4,600 square-meter facility on Tuesday, meant to automate shoe production, which is largely done manually in Asian factories at the moment.

The new production site in the southern German city of Ansbach is still under construction, but it represents a return to local production for Adidas, which stopped manufacturing shoes in its home market more than two decades ago in favor of Asia.

But the company has struggled with steadily rising wages across the continent, where it employs around a million people.

Six subcontractors of Adidas in China declined to comment or said they were not aware of the new production sites in Germany, news agency AFP reported.

The factory will deliver a first test series of around 500 pairs of shoes to be sold from late 2016, with large scale production targeted for next year. Adidas management also said the shirts of the German national football team could be produced in the same factory too.

The sportswear and equipment company also plans to open a second Speedfactory in the United States in 2017, with similar ones to follow in Britain or in France.

Adidas produced 301 million pairs of sport shoes last year, but it has to ramp up production by more than 10 percent if it is to reach its growth targets by 2020.

Its chief competitor Nike is also developing a robot-operated factory, but Adidas said it is further along in this area.

Many Millions of Chinese Shoe Manufacturing Jobs Will Vanish

Adidas insisted that the aim was not to immediately replace their workers, saying the goal was not “full automatization”.

Continue reading here…

3 Things: Auto Angst, Valuation Vulnerabilities, & Delusional Decouplings

Courtesy of Lance Roberts of,

Autos Send Economic Warning

Over the last year, or so, as economic data has materially weakened along with corporate earnings and profitability, one of the primary arguments against an “economic recession” has been the strength of automobile sales. I do not argue this point.

However, while there are continued “hopes” that this economic cycle will last indefinitely into the future, automobiles, among a variety of other economic indicators as discussed recently, are sending a clear warning sign.

Following the financial crisis the average age of vehicles on the road had gotten fairly extended so a replacement cycle became more likely. This replacement cycle was accelerated when the Obama Administration launched the “cash for clunker” program which reduced the number of “used” vehicles for sale pushing individuals into new cars. Combine replacement needs with low interest rates and easy financing and you get a sales cycle as shown below. 


(Note: When auto sales are reported each month they are annualized. The bar chart shows the over/underestimation of auto sales each month as compared to what actually occurred on an annual basis.)

Here’s the problem. There is a finite number of people to sell new cars too.


What the chart above shows is the number of cars sold currently now exceeds both the total increase in population and replacement needs of the existing population. In other words, the pool of available buyers is rapidly being depleted.

“But Lance, people will trade in those cars every couple of years, so the trend can keep going.”

Not really. As recently noted by Wolf Richter:

“Deep-subprime borrowers are high-risk. Typically they have credit scores below 550. To make it worth everyone’s while, they get stuffed into loans often with interest rates above 20%. To make payments even remotely possible at these rates, terms are often stretched to 84 months. Borrowers are typically upside down in their vehicle: the negative equity of their trade-in, along with title, taxes, and license fees, and a hefty dealer profit are rolled into the loan. When the lender repossesses the vehicle, losses add up in a hurry.

Auto loans, in general, have been in a

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Suspicion Sets In; Obama Sounds Like Trump; We’re All Bernie Sanders Now!

Courtesy of Mish.

The US is suspicious of UK prime minister David Cameron and his trade policies with China.

Well why not? But the reverse is true as well. The UK has every reason to be suspicious of president Obama.

Such is the nature of trade politics where every country every country is out for itself.

There is really nothing new about this, but I will point out that massive trade disputes are hallmarks of deflationary times.

The Financial Times reports Cameron Adds to Pressure on China Over Maritime Disputes.

David Cameron arrived at the Group of Seven summit in Japan on Wednesday and added his voice to pressure on China to abide by international law in disputes in the South China Sea.

The British prime minister is suspected by the US of toning down criticism of China as he tries to make the UK the “best partner in the west” to Beijing, setting up an awkward G7 session on Asian security issues on Thursday.

Britain is far from alone in seeking to boost exports to, and inward investment from, China. Angela Merkel, German chancellor, and President François Hollande of France, who are attending the G7 summit, have also made big trade pushes.

Officials in Washington have criticized the “constant accommodation” of China by Britain.



Suspicion was a #3 USA hit in 1964 and a minor UK hit single by Terry Stafford.

US Hits China and Others with More Steep Steel Duties

Continue reading here…

Emerson Electric: High-yield, Sound Valuation and 59 Consecutive Years of Dividend Increases, Part 2

Courtesy of Chuck Carnevale.


When I’m looking for a stock to add to my portfolio, there’s nothing more frustrating than spending a significant amount of time and effort on research – only to discover that the company in question is significantly overvalued.  Consequently, my first step always starts out with an assessment of the relative valuation of the company I am considering.  No matter how much I admire the company, its management team and its financial health and strength, I simply refuse to pay more for a stock than I believe it is worth.  The most commonly accepted investing principle is to buy low and sell high.

In Part 1 of this two-part series found here I ran the blue-chip Dividend Aristocrat and Champion Emerson Electric Company (EMR) through many variations of time-honored fair valuation measurements.  My general conclusion was that Emerson Electric was reasonably valued, and therefore, worthy of conducting a more comprehensive research effort on.

Since the time that Part 1 was written, Emerson Electric’s stock price has increased approximately a couple of dollars per share.  Nevertheless, I still consider it comfortably within a fair value range, but obviously not as attractive as it was last week.  As a result, investors might want to wait for a better entry point.  However, there’s no guarantee that that would happen.

Sidebar on Emerson Electric’s Valuation Calculations

After posting part 1 of this 2-part series, I received several questions regarding how I calculated the fair value multiple that I applied to the earnings and cash flow metrics that I presented.  Here is what I wrote in part 1:

“With these 10-year average calculations in hand, I can run what I consider conservative fair valuation levels for each of these metrics measured against Emerson Electric’s current market price of approximately $50.75.

For cash flow, I apply a historical normal cash flow value multiple of 9.5 which gives me a fair value price of $49.00. This is approximately $2 below Emerson Electric’s current price. This valuation method suggests that Emerson Electric is mildly overvalued based on cash flows, which is important from a dividend perspective.

For operating cash flow, I apply a normal price to operating cash flow multiple of 12.4, which gives me a fair value price of $50.22. This valuation method indicates that Emerson Electric is fully valued based on the market’s

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Insider Activity: Not So Much Lately

Here are some charts from showing that insider activity is relatively low, both buying activity and selling activity. Some notable buys recently were in ENDP (a mini-Valeant), FEYE, and AVID. 

GDPNow Bounces to 2.9% Following Durable Goods Report

Courtesy of Mish.

On the back of a greater than expected increase in Durable Goods Orders this morning, the Atlanta Fed GDPNow model rose from 2.5% to 2.9%.

Latest GDPNow Forecast: 2.9 Percent — May 26, 2016

GDPNow 2016-05-26

The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2016 is 2.9 percent on May 26, up from 2.5 percent on May 17. The forecast for second-quarter real gross private domestic investment growth increased from -0.3 percent to 0.4 percent following this morning’s durable manufacturing release from the U.S. Census Bureau. After yesterday’s advance report on international trade in goods from the Census Bureau, the forecast for the contribution of net exports to second-quarter real GDP growth increased from -0.04 percentage points to 0.16 percentage points.

2nd Quarter GDP Estimates

  1. Atlanta Fed: 2.9% – Updated May 26
  2. New York Fed: 1.7% – Updated May 20
  3. Markit: 0.7% – Updated May 25

Markit bases its forecast on a weakening service sector. For details, please see Service Sector Growth Weakest Since 2009; Markit Economist Estimates 0.7% GDP.

Mike “Mish” Shedlock

Original article here.



Billionaire Stephen Schwartzman How To Spot the Trends that Other Miss

By Jacob Wolinsky. Originally published at ValueWalk.

Billionaire Stephen Schwartzman How To Spot the Trends that Other Miss

Published on Mar 27, 2016

Billionaire Stephen Schwartzman How To Spot the Trends that Other Miss [HD]

Stephen Allen Schwarzman (born February 14, 1947) is an American business magnate and financier. He is the chairman and CEO of the Blackstone Group, a global private equity and financial advisory firm he established in 1985 with former US Secretary of Commerce Pete Peterson. His personal fortune is estimated at $12.9 billion, according to Forbes.As of 2015, Forbes ranked Schwarzman at 100th on its World’s Billionaires List.

The post ...

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Zero Hedge

China Warns The World: America Is The "Greatest Threat To Peace & Stability"

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

It is no secret that the relationship between the United States and China has been strained for quite some time. Earlier this month when the US sailed its guided missile destroyer the USS William P. Lawrence within 12 nautical miles of Chinese-occupied Fiery Cross Reef, it ended in China scrambling of two fighter jets and three warships to shadow the destroyer and convince it to leave the area.


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Phil's Favorites

Losers Average Losers

Is there a difference between adding to a losing position on the way to building a fortune and doubling down on a loser stock in a series of bad bets? Perhaps you see something the market has missed? Perhaps your timing is excellent (the second third fourth time)? Perhaps you're Warren Buffett? Or maybe the difference is just the odds, which are around 99% against you. 

Losers Average Losers

Courtesy of 

I’m not a huge fan of this quote from Paul Tudor Jones. Some of the best investors of all time have made a fortune adding to temporarily losing positions. And while this is true, it is equally true that the worst investments and the worst investors have added to losin...

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Chart School

Best Stock Market Indicator Update

Courtesy of Doug Short's Advisor Perspectives.

We continue to receive requests for updates to the "Best Stock Market Indicator", which used to be a regular guest post from John Carlucci. Here is an update of the "Carlucci" indicator along with a summary of John's explanation on how he uses it.

As John described it: "The $OEXA200R (the percentage of S&P 100 stocks above their 200 DMA) is a technical indicator available on used to find the "sweet spot" time period in the market when you have the best chance of making money."

Latest Indicator Position

According to this system, the market ...

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Kimble Charting Solutions

Gold Mining Stocks- Most dangerous time to own them in years?

Courtesy of Chris Kimble.


The rally in mining stocks since the first of the year has been very impressive.

The rally has taken Gold Miners ETF GDX up to test the 23% retracement of the collapse over the past 5-years. At the same time it is hitting the 23% level, two other resistance lines are being put to a test, with momentum at the highest levels in the past 5-years.

Joe Friday Just The Facts...

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Market News

News You Can Use From Phil's Stock World


Financial Markets and Economy

Strategist Jim Paulsen makes case for why stocks are about to hit record highs (CNBC)

"There's still a lot of pessimism," Paulsen said. "We're an eyelash away from all-time highs and there's a lot of people still in the bear market camp." If too many people shift to the bull camp, he said he might get more cautious.

The US economy was better than we thought in the first quarter (Business Insider)

US economic growth was better than first estimated in the first quarter, according to the Commerce Department.


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Insider Scoop

Graham Media Group To Buy WCWJ, CW affiliate In Jacksonville, NBC Affiliate in Roanoke

Courtesy of Benzinga.

Graham Media Group, Inc., a Graham Holdings Company (NYSE: GHC) subsidiary, said it struck a deal with Nexstar Broadcasting Group, Inc. and Media General, Inc. to purchase WCWJ, a CW affiliate television station in Jacksonville, Florida and WSLS, an NBC affiliate television station in Roanoke, Virginia for $60 million in cash and the assumption of certain liabilities.

The agreement to acquire Nextar Broadcasting included pension obligations. Graham Media Group, Inc. would continue to operate both stations under their current network affiliations.

Graham Media said the acquisition is subject to approval by the FCC, other regulatory appr... more from Insider


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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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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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



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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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! 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 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.

Thank you for you time!

FeedTheBull - Top Stock market and Finance Sites

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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About Ilene:

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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