Phil's Newsletter

Philstockworld Top Trade Review

Who says we're not bullish?  

While we are, certainly, cautious on the market and well-hedged (just in case), we certainly do seem to find a lot of bullish positions to take.  That's because we're VALUE INVESTORS and there is almost always something of value to buy in any kind of market and our Top Trades are, of course, our top value picks – the ones we feel most confident in.  

In our first year, our Top Trade Ideas had an astounding 81.1% winning percentage with 86 out of 106 trades making money within a few months.  That's without even adjusting them.  We do not have a portfolio for Top Trades, we just do these reviews but many of our Top Trade Ideas do end up in one of our 4 Member Portfolios.  

Our August review took us through July 12th and July 12th was the last Top Trade Idea we had until August because I REALLY didn't trust the market in mid-July so this month, we'll just be reviewing our August trades as we like to give Sept time to cook before reviewing those.  We had a surprising amount of trade ideas in August though.  Our 15 May, June and July picks had 11 winners but, unfortunately, that actually bought down our percentage!  

Of course, when you are reading our reviews, those losing tades are often still opportunities.  CMG, CBI, PSO and SDS are all plays we still like from the last review – they are simply late bloomers!   SDS, in fact, is a hedge – it's not supposed to win if the others are doing well but we still count it as a loss. 

Top Trade Alerts come from our Live Member Chat Room at Philstockworld and represent a very small portion of our trade ideas but they are a fair representation of applying our "Be the House – NOT the Gambler" strategy and you can learn a lot by reviewing the performance of these trades through up and down markets over the course of a year.  All PSW Basic and Premium Members have Top Trade Access (just make sure your smart phone number is in the box here if you want text alerts in addition to our EMail alerts). 

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$500 Friday – A Ridiculous Week Comes to a Close

Don't you just love oil trading? 

After making $4,000 in less than a day on our Live Trading Webinar Idea on Wednesday (replay available here) we took advantage of the last day's trading the November contracts over at the NYMEX to short Oil Futures (/CL) one final time.  As I said to our readers in yesterday's morning post:

Today is rollover day to the December contracts so anything can happen though, of course, we'll short below $51 or $51.50 if we get there on a bounce, using those lines as stops and, of course, we still have our longer-term Oil ETF (USO) puts.  We can only hope that, by making contract spoofing more expensive for the pumpers, we can do just a little to curb the practice at the NYMEX – God only knows the GOP Congress has done nothing to stop this madness, which robs Americans of Billions of Dollars at the pumps each year. 

Remember, I can only tell you what is going to happen in the markets and how to make money by trading it – the rest is up to you!  

Another trade we left up to you was our call to short the S&P (also from our Webinar) Futures (/ES) at 2,140 and those gives us a nice ride down to 2,130, which was also good for $500 per contract and that's nice money to take home into the weekend so we're not being greedy if it stops us out (over our weak bounce line at 2,134 – also see yesterday's post), though we will short oil again as it struggles to take back $51 this morning though, now we're early in the December contract cycle, so there's less downward pressure, so it's a much riskier bet (so very tight stops above).

Image result for oil inventoriesAlso, in favor of the oil bull, OPEC is having another meeting this weekend (as noted in our Webinar, they are now having streams of meetings to talk up the price of oil) and Now Russia's Oil Minister is saying that, with Russian output now over 11Mb/d (a post-Soviet record), they are still willing to discuss production cutbacks.  As…
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$4,000 Thursday – Our Live Trade Ideas Make our Members Money!


That's what we like to say when we get a nice dip when we're shorting.  It indicates both the excitement of the trade and it's also a reminder that Futures trading is a lot like playing Chutes and Ladders – things can quickly reverse on you, so you have to know when to take those profits off the table.   Yesterday, we initiated our short oil position (/CL) during our Live Trading Webinar at 1pm (replay available here) and, before it was over, we had reduced the position to just 2 contracts, which we decided to leave overnight.  Those two contracts made another $2,300 overnight and now we're up $4,110 on a trade in just 19 hours – not bad for a free webinar!  

Because we know the NYMEX trading is FAKE, we knew the movement yesterday was also FAKE so we stuck with our short positions despite the "strong" oil inventory report, where the headline 5.2Mb draw in oil was also FAKE because, in fact, we imported 6.9Mb less oil last week than the week before.  So not only was the draw NOT due to an uptick in demand but, without the hurricane disrupting shipping, we would have had a 1.7Mb BUILD last week.  Meanwhile, those FAKE November contract orders are almost all gone – as we predicted:

That's right, there are now 500,000 (96%) FAKE orders for December crude oil and, as of yesterday's close, when we were shorting it (2:35 pm), it was $51.82.  Now it's testing $51 and 0.82 on a futures contract is $820 per contract.  That means those 519,754 contracts lost $426M this morning – ouch!  Fortunately, we were able to lock up $4,000 of that gift money for ourselves – congratulations to all our Members!  

We're done with oil shorts for the moment.  Today is rollover day to the December contracts so anything can happen though, of course, we'll short below $51 or $51.50 if we get there on a bounce, using those lines as stops and, of course, we still have our longer-term Oil ETF (USO) puts.  We can only hope that, by making contract spoofing more expensive for the pumpers, we can do just a little to curb the practice
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WTF Wednesday? China’s “Perfect” GDP Data is a Joke

Image result for corporate newsOh come on media!  

Seriously we're all going to pretend that China once again hitting all of their targets dead center for another quarter (and claiming 6.7% growth) isn't complete and utter BS?  First of all, 6.7% is A LOT. If your kid was 50 inches and grew 6.7% they'd be 53.5 inches – that's not the kind of thing you don't notice, right?  Well, real economies don't grow on paper, they grow on the streets and by the sea and in the air – a country the size of China ($11Tn GDP – also BS) growing at 6.7% ($737Bn) is adding more than Saudi Arabia ($637Bn) or Turkey ($735Bn) every year.  Hell Mexico is "only" $1Tn!

As noted by Delboy in our Live Member Chat Room this morning: "Within 0.1% every single figure was identical to the ones we were presented with for the last quarter. So they’re telling us that the trajectory is absolutely linear? The last time we all fell for that kind of consistency was when Bernie Madoff sent out the performance numbers on his funds. Can any economy, China’s included, really perform like that?" to which I replied:

Their GDP is a total joke.  What companies in China are reflecting this growth?  What's really crazy is that no one in the MSM ever takes a serious look at this stuff.  

Think about what 7% growth looks like – you could see growth like that on a satellite – cities would be spreading like viruses around the country, truck, rail and shipping traffic would get bigger and bigger, ports would be bursting with cargo and people to load and offload day and night and they too would have to expand to meet demand.  

Energy consumption would rise despite all attempts at conservation and an ever-rising flow of materials into their warehouses would not be enough to maintain inventories.  In other words – they are obviously completely full of crap!  

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Turnaround Tuesday – Market Rallies Back to our Shorting Lines

See, this is why Monday's are pointless.

Everything that happened in yesterday's ultra low-volume sell-off has been reversed already and NOW the week can finally begin.  Still, it didn't stop us from making a very quick $1,000 per contract on the oil trade we talked about in yesterday's morning post – you are very welcome!  

Remember, I can only tell you what the market is going to do and how to make money trading it – the rest is up to you…

The default contracts rolled over this morning and now we're watching /CLZ6, the December contracts, which are 0.50 higher and have less pressure on them so we're not as enthusiastic with our shorts today but $51, if we hit it, will still be worth a toss on the short side.  

Another thing we knew yesterday was that Fed Vice-Chairman Fisher was the only hawk speaking this week and he had his swing at bat and was actually very gentle and now we have no Fed Speakers today but we do have the Consumer Price Index at 8:30 and, other than employment figures, that's the #1 indicator that influences the Fed.  

This is September CPI and August was 0.2% but 0.3% at the core, which excludes food and energy.  Oil got more expensive in September as did many foods including coffee, which we nailed the bottom on in earlier in the year and which we just discussed on Money Talk last week as a finalist for our 2017 Trade of the Year – though it won't make the finals if it takes off too quickly for our Thanksgiving official pick!

Of course, that didn't stop us from adding it to our Long-Term Portfolio for our Members earlier in the year though currently we've cashed those out and added the Coffee ETF (JO) to our Options Opportunity Portfolio in the following trade:

JO is already blasting over our goal at $23.18 as of yesterday's close and, if we stay over $22 through March, this net $1,650 trade will return $4,500 for a $2,850 gain on cash (172%) in just 6…
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Monday Market Quagmire – More Stimulus, Less Results

$3 Trillion Dollars!  

That's how much QE stimulus has been added by the World's Central Banksters in the last year and the headlines say it's "only" a 10% increase (in 2016, not 12 months) but it's 10% of a MUCH BIGGER NUMBER than when we had a 20% increase in 2012 ($2.4Tn from $12Tn) or a 47% increase in 2009 ($2.4 Tn from $9.5Tn).  This is in fact, the most stimulus EVER pushed into the markets and the S&P is at 2,132, after starting the year at 2,050 so up 82 points is 4% for $3Tn.

So it costs about $1Tn to buy 1% of S&P growth these days – that's not much bang for the buck.  From Jan 2012 (1,250) to Dec (1,425) $2.5Tn bought us 175 points, which was 14% so now we're spending 30% more to get 70% less now.  How long will this madness continue?  Will we spend $4Tn to buy another 1% growth or will the Central Banskters finally admit their policies are a dismal failure and, at this point, doing far more harm than good?

In China (and it always comes back to China), Beijing has quietly launched the biggest fiscal stimulus in history, one that is even bigger than 2009-10, following the global meltdown.  According to Evercore ISI, the size of the stimulus is a whopping 4.5 %- 5.0% of GDP in 2016 or, to put it simply, 2/3 of China's GDP growth is nothing more than fiscal stimulus!  

This terrifying chart shows you just how far off the rails the Chinese Government has driven the stimulus train, driving the Government's fiscal balance from +400Bn in 2008 to – 3,000Bn in 2016 adding 429Bn more debt in August alone!  

THAT is how China avoided our predicted August melt-down and all the demand numbers you are seeing from China that are being treated as good news are completely stimulus-driven and are simply not a sustainable reality.  For example, the dramatic surge in car purchases is not due to organic demand, but is the result of a tax cut (by half) on small engine cars implemented by the government in September, 2015.  Since the cut, China’s auto sales have increased…
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Flip Floppin’ Friday – Back Where We Started

Image result for monkey stock pickingWow, what a market!  

The Futures are up 10 points on the S&P, bringing us back to 2,142 at 7:30 (2,136 on the /ES futures) driven by nothing in particular other then Europe's relief that we rallied into the close so now they are rallying and our futures are rallying because Europe is rallying and if that sounds idiotic to you – welcome to trading!  It kind of sucks if you are one of those stock-holding traders waiting for your equities to appreciate but it's unbelievably fun when you play inside the channels.

We started out the day short (and our Live Webinar's short on the Dow ended up making $1,000 per contract) but by 11:30 we were done with that trade as I said to our Members in the Live Chat Room:

Truth or dare time with the EU closing in 10 mins.   They've recovered a bit into the close (down 1.25%) so no reason we should go lower now, especially with the Dollar at 97.63 but watch for the bounce off 97.50 as that could add more downward pressure. 

As you can see from the chart, we nailed the turn perfectly and, of course, we did a little bottom-fishing but not much as we really don't trust this low-volume rally (and pre-market is very low volume too) and we already took a stab at shorting the Nasdaq this morning that failed (-$50 per contract) and we also are, of course, back in to short oil at $51, which is the gift that keeps on giving this week.  Yesterday we hit $49.50 (up $1,000 per contract) before it turned back up!  

We're anxiously waiting for Fed Governor Rosengren to speak at 8:30 and the title of the conference is "The Elusive 'Great' Recovery: Causes and Implications for Future Business Cycle Dynamics" and, as if that isn't enough insure an empty room – I hear the bagels are also terrible.  Rosengren's boss is speaking at the same conference at 1:30 so it's unlikely he will make too strong a hawkish case ahead of Yellen's comments.…
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Thrilling Thursday Thump – Our Webinar Dow Short Gains $750 Overnight

Sometimes things just go your way!  

We had our usual Live Trading Webinar yesterday at 1pm and, when the replay is available, you can see our live analysis of the Fed Minutes as they were released which led us to conclude that the people rallying the Dow were idiots and that we should short the Dow Futures (/YM) at 18,100.  As you can see on the chart, we blew tight though our primary target of 18,000 and almost hit 17,900 (a $1,000 gain) before bouncing back to 17,950 where we stopped out for a $750 per contract gain.  Not bad for an overnight trade, right?  

Of course, we already expected the Dow to fall hard and fast, which is why we featured the Ultra-Short Dow ETF (DXD) as a hedge in yesterday's morning post.  We don't need to the Fed Minutes to tell us what the market is going to do but it was nice to have the confirmation so we could add some bonus money with our Futures trade.  Now, the nice thing about the Futures is we can flip long on /YM at 17,500 (with tight stops below) and lock in the gains we made on DXD until the market opens.  On the whole, however, we're expecting more downside than this but it will take a while for the dip buyers to realize they are tilting at windmills.  

Image result for tomahawk missileSpeaking of Quixotic trades, those wacky oil bulls are at it again, driving oil back to $50.20 despite a build in the API report.  They are all excited because we bombed Yemen this morning but all we did was knock out 3 rebel radar sites with a few dozen tomahawk missiles and the only person who'll make money on that is Lockheed Martin (LMT) who charges $2M for each one of those bad boys (long LMT!).

Still the very mention of anything even vaguely Arab-sounding and missiles is always good for a pop in oil and we're popping up to $50.40 per market on oil Futures (/CL), where we're happy to take the bulls' money and short them again with a stop at $50.55 ($150 per contract loss) and we'll do it again at $50.90 if…
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Wednesday Weakness: Controlled Descent or Helter Skelter?

Image result for helter skelter

"When I get to the bottom I go back to the top of the slide
Where I stop and I turn and I go for a ride
Till I get to the bottom and I see you again"
- Beatles 

No, it's not a song about killing people (Manson), it's a song about a carnival slide in England.  

As it says at the entrance: "Don't forget your mat" – just as we always remind our Members not to forget their hedges because, when we get to the top of the slide, we often go for a ride to the bottom, where we see bargains again and it's a damned shame if we're not ready to buy them, right?  

Just as the path of the Helter Skelter is predictable, so is the eventual unwinding of a market rally and, no matter how much QE you pump into it, things do come down eventually.  Only when you build on the base are you able to raise the bottom of the slide.  Otherwise, no matter how high you climb – you will see that bottom again.  

We had a little scare yesterday but not too much damage done, so far and, hopefully, you are well-hedged, like our Member Craigs, who said last night:

Phil I must say that it was really nice to have a portfolio that was looking very stable in the  face of a rough day for the markets. I ended the day up 0.3% which includes another successful day of futures trading. So with a portfolio of mostly cash, a few of our faves like Apple and LL, JO, TOL, DIS, etc., along with a couple of hedges that paid off nicely today, and my futures trades, I never had to break a sweat during that madhouse today. Yes, by George (or Phil), I may be learning this system.

Trading isn't just about making money – it's about protecting the money you've already made.  If I haven't mentioned it lately, I like CASH!!! at the moment and our 4 Member Portfolios are 80%…
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$120 Tuesday for Apple (AAPL) as Samsung Gives Up on the Note 7

Apple (AAPL) $120 again.  

I may have mentioned AAPL a couple of times, after all, it was our 2013, 2014 and 2015 Stock of the Year but not this year, as we were at $120 last Thanksgiving, when I make my picks for the following year, and we saw a rough year ahead so our Trade of the Year for 2016 was the Natural Gas ETF (UNG), which is right on track.  Anyway, I laid out my logic for the AAPL trade on TV (as I always do with our trades of the year) and this graphic they used lays out the idea we had to take advantage of AAPL

The target price was $120 and the target time was Jan of 2017 and we've been in and out of AAPL along the way, buying whenever it's below $100 and selling when it went over $120 because, as I noted yesterday, we are FUNDAMENTAL investors and we KNOW what our stocks are worth so we buy them when they are cheap and we sell them when they are expensive.  I know that's a strange concept to most investors but trust me – it's a profitable one!  

Notice we don't NEED a stock to go up for our Trade of the Year to make money – that's not how we play the market.  At Philstockworld, we use the simple options strategies we teach our Members to construct plays that give us tremendous upside leverage.  Using the above bull call spread and put combination, we netted into the AAPL trade for just $8,000 in cash and, if AAPL manages to hold $120 into January, the bull call spread will be worth $60,000 for a $52,000 profit (650%).  This is good money for two years' "work", right?

Every year, in an attempt  not to be boring, I struggle to find a Top Trade Idea that's better than Apple but that doesn't mean we aren't afraid to go back to the well, over and over and over again – when the opportunity presents itself.  As recently as August, when Apple dipped back to $108.36, we made AAPL our Top Trade Idea for the Week on 8/22 and I
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Phil's Favorites

Why The Global Economy Will Disintegrate Rapidly

Courtesy of The Automatic Earth.

Pamir, Last Commercial Sailing Ship To Round Cape Horn 1949

We have written little on the topic of energy lately, other than related to oil prices going up and down, empty OPEC ‘promises’ to cut oil production, and the incredible debt load threatening to crush US -and Canadian- unconventional oil and gas. It’s a logical outcome of focusing more on finance than energy, because we feel the former has a shorter timeline than the latter. Something that harks back to our Oil Drum days.

But that doesn’t mean that the idea and/or principle of peak oil has disappeared, or that we have completely forgotten it. It has just been snowed under by the financial crisis (and by unconventinal oil and gas). And while we continue...

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Zero Hedge

BullionStar attends LBMA Conference in Singapore, October 2016

Courtesy of ZeroHedge. View original post here.


This year, the well-known annual conference of the London Bullion Market Association (LBMA) was held in Singapore between Sunday 16 October and Tuesday 18 October at the impressive Shangri-La Hotel. The conference attracts delegates and speakers fro...

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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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Market News

News You Can Use From Phil's Stock World


Financial Markets and Economy

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)

One of the things Hillary Clinton and Donald Trump disagree most strongly about is how to stimulate the economy. Donald Trump has one idea that conservative economist...

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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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Chart School

SP500 Status Pre US 2016 Elections

Courtesy of Read the Ticker.

Where have we been, what does the future look like?

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NOTE: does allow users to load objects and text on charts, however some annotations are by a free third party image tool named

Investing Quote...

..."There is what I call the behaviour of a stock, actions that enable you to judge whether or not it is going to proceed in accordance with the precedents that your observation has noted. If a stock doesn’t act right don’t touch it, because, be...

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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.

But the Westboro Baptist Church's protest rally was blocked by about 200 people who formed a human barricade on the main street in downtown Orlando, ...

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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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Mapping The Market

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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Digital Currencies

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 - A Waiting Game

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

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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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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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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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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