Phil's Newsletter

Told You So Tuesday – Brexit Fears Boil Over

This is why we cashed out last week!  

As you can see on the chart, the Euro Stoxx 50 is now down from 3,050 last week to 2,800, down 250 points (8%) since we took the money and ran in our Long-Term Portfolio at 1:31 pm in our Live Member Chat Room and, the next day, I reiterated our call for CASH!!! during our Live Trading Webinar (replay available here).  It is so much easier to cash out while the markets are still going up – that's why we didn't want to wait for the news to catch up with what we thought was a very obvious market call.  As I said in last Tuesday's morning post:

Meanwhile, while we wait, we continue to short the Index Futures when we get a good signal and we didn't get one yesterday but today we have 2,110 on the S&P (/ES), 17,950 on the Dow (/YM), 4,530 on the Nasdaq (/NQ), 1,175 on the Russell (/TF) and 16,850 on the Nikkei (/NKD) and we can short the laggards if 3 of 5 cross under AND the Dollar is over 94 – those are our marks for the day and VERY tight stops above. 

Look, I don't want to be Mr. Doom and Gloom – as I have pointed out, we have TONS of long positions because the Fed(s) have TONS of money to prop up the markets with.  I just think it's a good idea to protect them from a potential revisit to 1,850 (-12.5%) because, truth be told, we've made more money in our Short-Term Portfolio (400%) on our downside hedges than we have on our Long-Term positions (100%) so hedging is great fun when it pays off and merely an annoyance when it doesn't – kind of like making small bets on long-shots at the track except, in this case – we also have our money on the favorites!  

That afternoon, we decided enough was enough and we cashed out about 1/2 of our LTP positions, which left us tilted much more bearish in our Member Portfolios.  Meanwhile, our Futures shorts are paying off fantastically:

  • Dow 17,600 is down 350 points at $5/point = $1,750 per contract profit
  • S&P 2,063 is down 47 points at $50/point =

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Meaningless Monday – Making America Great Again

Monday again?

Come on people, let's lobby our useless Congress to make all Monday's National Holidays.  A 4-day work-week would also make sense.  If we stopped people from using Social Media at work, they'd be able to accomplish everything in 2 days anyway.  According to the chart on the right, 10% of our workforce spends more time on the web than they do working.  

Only 60% admit they visit Social Media sites during work and sure, 30% of those people are old – so maybe they really didn't but it's not just Social Media, of course.  Finding a place to eat counts too, or planning a trip or reading non-work stuff.  Work is, on the whole, a strange thing because most people can take a vacation for a whole week and the company is just fine without them, right?  

"Gig Economy" workers don't get paid when they take time off and that gives Gig Employers a 2% advantage over their rivals right out of the gate.  A complete lack of benefit payments adds another 6% advantage and then there's the fact that the employees don't get paid at all for time they are not being productive – let's call that 22% to round it out to a 30% advantage Gig Employers have over traditional employers.  

Over 6% of our labor force is now "Gig" or pretty much 100% of the "jobs" that have been created since the crash of 2008.  These are not, generally, great jobs.  They are certainly not the kind of jobs that let you dream of a sweet retirement and that is why you have a jobs recovery without a recovery in the underlying economy and without any real growth in Consumer Spending or Housing.  If we had a booming slave economy, you wouldn't be surprised that the slaves aren't running out and buying new homes or couches and washing machines yet the idea of wage slavery is too abstract for most Americans to understand – especially us older ones, who used to be able to afford an apartment in college with our minimum wage jobs. 

That's simply not true anymore.  If like me, you got
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$1,000 Friday – Wednesday’s Oil Prediction Pays Off!

You are welcome!  

How many newsletters that you read give away free trading ideas that make $1,000 per contract in just 48 hours?  I'd say none but this one because I read A LOT of newsletters and, frankly, they mostly suck.  That's why I started Philstockworld in the first place – I subscribed to all these people who sucked and it occurred to me I could do a much better job – and here I am!  

We even went over this trade (still playable) in our Live Trading Webinar on Wednesday afternoon – it was the only trade we made (see replay here) as it was, by far, the best trade idea we could find.  In Monday's post we also gave away, for free, an SDS hedging idea that I'm sure will come in handy today.  If you'd like to have the PSW Report delivered live, to your mailbox, each day before the market opens – it's just $3 per day - I'm sure you do much dumber things for $99/month than miss out on great trading ideas that could actually make you money, right?  

If you are a more serious trader, you might like our Top Trade Alerts – which we reviewed last weekend with 16 winners out of 18 trade ideas in March and April – and that brought DOWN our perfect score from January and February (sorry).

Usually our morning posts are simply a macro overview of the markets, focusing on whatever I feel is important to talk about that day.  Recently, it's been all about the Brexit along with all the other Global nonsense that finally drove us to cash out many of our winners from our Long-Term Portfolio on Tuesday.  Since we did not reduce our hedges in the Short-Term Portfolio (or the Option Opportunity Portfolio) – that left us fairly bearish heading into the UK's June 23rd vote and we sure haven't seen many things we've wanted to add this week while we wait – so we amuse ourselves with some fun Futures trades.  

I have often said that you NEED to have that Futures tool in your tool belt and, also on Monday, we put
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Faltering Thursday – Draghi’s Brexit Fears Push EuroStoxx Back Below 3,000

Things are turning ugly again.

We are now officially short on the market and just in time, it seems as the EuroStoxx index is down 0.666% for the day and 3.33% from the top and it's another 145-point drop to our next support at 2,850 but call it the 5% Rule™ from 3,000, of course.

Speaking of the 5% Rule™, we nailed it with our oil prediction yesterday as Oil Futures (/CL) topped out right at $51.67 and, as I said in yesterday's morning post: "Our plan is to short 1x here ($51.15) and go to 2x at $52.25 to average $51.70, then half out at $51.70 and we'll see how far it falls."  We didn't go quite as high as we'd hoped but our oil shorts already paid off nicely this morning as we fell back to $50.80 and we stopped out at $50.85 and now we're back short again below the $50.80 line, hopefully for a ride back to $50 but a tight stop still at $50.85, which risks a $50 per contract loss against possible $800 per contract gains, again:

We knew it would be something – that's why we called for CASH!!! on Tuesday, while everyone else was in a greed-buying frenzy.  Today we can blame Mario Draghi, who spoke at the ECB's Economic Forum this morning and sent the markets into a dive (down 1%ish in Europe) by saying the truth – that monetary policy alone could not fix Europe's problems and that "if other policies are not aligned with monetary policy, inflation risks returning to our objective at a slower pace."

This marks a big shift from Draghi subtly hinting that the ECB needs to provide its own stimulus programs (preferably infrastructure spending) to outright begging as it's becoming clear that QE is losing it's effectiveness in the stalling economies of Europe and, as Draghi notes, it's not enough:

Bank balance sheets have not yet been fully repaired, as illustrated by the high stock of non-performing loans in some parts of the euro area. So more work-out of these non-performing assets will have to take place, and the

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Why Not Wednesday – 18,000 on the Dow? No Worries!

"Don't worry about a thing,

'Cause every little thing gonna be all right.

Singin': "Don't worry about a thing,

'Cause every little thing gonna be all right!" – Bob Marley

We're not worried because we cashed out yesterday.  

That's right, the Dow hit 18,000 and we took the money and ran, closing out over half of our uncovered Long-Term Portfolio positions, pretty much everything that was up 40% or more, getting our CASH!!! off the table just in time to take a 2-week trading vacation ahead of the June 23rd Brexit vote.  It's so much easier to take your money off the table while things are still going up – you get much better prices from all the suckers who are still buying (they are called "bagholders" by market professionals). 

The last time we did such a big cash out was last August and our timing was perfect then as we cashed out and went short and, by September, as the markets collapsed, our paired Long and Short-Term Portfolios hit $1M for the first time (up 66%) and we went shopping with our CASH!!! in late September (see "Back to Cash, Back to Basics – Buying Stocks for a Discount") caught the rally into January, cashed out again, went shopping in February and now we're out again at $1.5M – up another 50%, or 80% of our starting basis, in just over 6 months so of course we should be cashing in our gains, right?  

Maybe our timing is wrong this time but that's why that indicator at the top of the page says "EXTREME GREED" that's where the market is and excuse us if we don't have the stomach to ride it up to 100.  When you have profits, you NEED to learn to lock them in and protect them – otherwise, what's the point of making them?  

As you can see from the chart…
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Terrific Tuesday – Yellen Makes Everything Awesome Again

Everything is awesome!  

Janet Yellen told us yesterday not to overreact to the Friday's AWFUL Jobs Report while she herself overreacted and took the June rate hike off the table, blaming the Brexit vote – as if she only just yesterday found out about it.  That sent our markets flying higher and, this morning, Asia followed us higher and Europe followed Asia and the US higher and now our markets are following Europe higher and the tiger will continue to chase it's own tail for a while and we'll see where we end up but then what?

Then tomorrow we get the oil inventories at 10:30 and $50 oil is one of the big drivers of this week's rally as the Energy Sector and the Financials who lent them money are much relieved.  If you actually read Yellen's speech – it's kind of all over the place and she says "Unfortunately" 3 times and essentially says the Fed does not have a clue as to what's going on or what to do about it.  Isn't that AWESOME???

She says weak 10 times:  GDP growth, economic activity, business investment (3 times), productivity (3 time), US growth and International growth.  The only "strongs" she mentions are goals for the future so yes, we are weak (10x) and we HOPE to be strong (4x) and the market reaction is to get back to all-time highs – as if we're already strong and getting stronger – AWESOME!!! 

As I mentioned in yesterday's post, we're not trying to fight the Fed(s) here – as long as they are going to keep pumping up the markets, we will go along for the ride – but we will keep one hand on the exit door at all times because this crazy train may come to a screeching halt at any time but, for now, we seem to coast right past crisis after crises as they all pile up in our rear-view mirrors – still there but forgotten by our short-sighted investors.  

In fact, our Long-Term Portfolio, which is generally bullish, topped +100% for the first time on yesterday's rally and our Options Opportunity Portfolio (available as a
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Monday Market Myopia – Yellen Speaks at Noon!

SPY 5 MINUTEIt's always fun on days when Janet speaks.

Our FOMC chairwoman speaks TWICE today in Philadelphia (again at 2pm), so all sorts of fun this afternoon.   You know our game plan – we're short the S&P Futures (/ES) below the 2,100 line.  They are now 2,101.50 after hitting 2,082.50 on Friday, before the spectacular recovery and it's yet another example of why you need to have Futures Trading as part of your market tool-belt as we had a FANTASTIC time collecting money on our shorts off the Non-Farm Payroll disaster but only the very, very quick were able to profit from the action once the market opened.  

There was certainly nothing in Friday's data that made me change my mind about 2,100 being a top, along with 17,850 on the Dow (/YM), 4,525 on the Nasdaq (/NQ), 1,160 on the Russell (/TF) and 17,200 on the Nikkei (/NKD) and we're over a couple and under a couple and we use a 3 of 5 rule to set direction and the direction should be down this morning and I don't see how Yellen is going to reverse that since she either stays the course, which is tightening by summer or she flip-flops based on a single jobs report and appears weak in her convictions – it's a lose-lose.  

By the way, I don't want to come across as a perma-bear – we're just being cautious into the summer, where we expect a correction but then we'll be happy to buy again.  In fact, we just reviewed our Top Trade Alerts for the months of March and April and only one trade idea was bearish (CVX) and it turned out to be one of our only two misses for the period against 16 winning trades.  That would be impressive but it actually bought our average down as we were 16 for 16 in January and February!  

As I noted to our Top Trade Members at the end of the review:

Bear in mind we are NOT encouraging holding a lot of open trades at the moment as we expect a sell-off in the summer.  If you take anything away from these reviews it should be that you should

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Philstockworld Top Trade Review – Part 2

Yet another fantastic two months for our Top Trade Ideas!  Not only did we start the year with 15 of 16 winners (see April's Review), but our only losing trade idea at the time was UNG, which just turned around last week – making us PERFECT for 2016 in our first 16 picks.  

Of course, it's been like shooting fish in a barrel since the February dip on the bull side but the really cool thing is we also called the drop on Jan 8th with SDS and SQQQ hedges that paid off huge as we bottomed out the next month.  We only started doing Top Trades last August and what we do is simply select one or two trades a week from our Live Member Chat Room at Philstockworld that we feel have a very high probability of success.  That then sends out Text and EMail Alerts to our Members, so it's perfect for people who don't have time to be on-line during the day.  All PSW Basic and Premium Members have Top Trade Access (just make sure your smart phone number is in the box here). 

We don't have a portfolio for our Top Trades as it would be redundant to our 4 Member Tracking Portfolios but many Top Trade Ideas are from trades we do officially add to our portfolios.  That's why we do these reviews once in a while – to check in and see if our logic is on or off track.  You can't make good future decisions without learning from your past ones – something we emphasize at PSW!  

54 of our first 73 (74%) Top Trade ideas were winners and 4 of our 11 losers were Lumber Liquidators (LL) trade ideas – still one of our favorite value plays!  Getting 3 out of 4 trades right is plenty to move the investing ball towards the goal line.  

Combine that with sensible portfolio management techniques (diversification, managing losses, hedging) and you'll beat the S&P by a mile with no sweat.  Generally, with our Top Trades, we're simply picking stocks we feel are underpriced and we're using our various options techniques to give ourselves even better discounts and hedged entries but these are patience plays that can take time to get going, usually our Top Trade Ideas have…
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Friday Already? Non-Farm Payroll Disaster Knocks the Markets Lower

I love the shorter work-week.  

This is a great time to point out to your boss that you got just as much done this week as you do in a 5-day week so let's start a campaign to shorten the workweeks.  We certainly need shorter workweeks as we're no longer creating jobs (just 38,0000) in May – even though unemployment is LOWER, at 4.7% because people are quitting the workforce.

So say goodbye to 2,100 on the S&P and this is a good time to say "I told you so" as my headlines for the morning posts in this short week have been:

As I mentioned on Wednesday morning, we are already in a bearish stance in our portfolios and very much in CASH!!! and we are short the /ES Futures at 2,100 as well as long the S&P ultra-short ETF (SDS) which closed yesterday at $17.91.  It didn't have to be the NFP Report but SOMETHING was going to take the markets down as the rally was totally fake – on ridiculously low volume since last week.  The low-volume window-dressing began at 2,050 on the S&P, so that's our short-term target (-2.5%) and we'll see what kind of support we have down there.  

Meanwhile, the Futures are far worse than they look (down 0.25% at the moment) because the Dollar plunged 1% on the release of the Payroll Report (less workers need less Dollars to pay them) and we're back down at 94.50 but we should bounce around there and that bounce will make it worse for the indexes as the Dollar recovers.  It will also jam down commodities and less workers need less oil so Oil Futures (/CL) short at $49 are going to be a fun play this morning.  So much for the Fed tightening in June – no way that will happen now (not that it was going to).  

The worst thing about this situation, with low unemployment
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Fake Market Thursday – OPEC, ECB and the S&P 500

SPY 5 MINUTENo one was trading yesterday.

The markets may as well have been closed based on the volume trading on the S&P's ETF (SPY) and, as you can see, the TradeBots that did show up for work dutifully brought us right back to $210 (2,100 on the index) – to preserve the illusion that all is well – even though it's clearly not.  

Obama made a great speech yesterday laying out the good and bad of our current economy and setting the tone for the next 6 months of debate as we decide who will replace him next year.  The things that make me nervous about the markets have nothing to do with our economy – which is slowly recovering – it's about the economies of Europe and China and Japan.  Those are the economic nightmares that keep me up at night.  

Just yesterday, Bloomberg reported that the PBOC is looking to crack down on China's $8.1Tn on-line financing market (ie. shadow banking), which is used to finance everything in China from diamond mines to weddings.  $8Tn is 80% of China's entire economy in unregulated banking and the fear is that it's become a massive Ponzi scheme as more and more small investors get involved in lending schemes in search of higher interest rates than the banks give them.   

"Risks have also emerged because of the relatively loose regulations," Yu Xiangrong, an economist at China International Capital Corp. in Hong Kong, wrote in a recent note, citing reports of Ponzi schemes and operators disappearing with investor money. "We expect China to step up its efforts to address the risks associated with internet finance and to tighten regulations on fundraising, loan-pricing, lending and risk controls."

Meanwhile, casino revenues in Macau fell 9.6% – another indication of Chinese belt-tightening and April was down 9.5%.  The average visitor spent $220, down 30% from 2014 and Macau's economy is down 13.3% in Q1 – it's 7th consecutive decline.  Wynn (WYNN) opens the Palace in July – it will be interesting to see how that goes.  Then Sands (LVS) opens the Parisian in September.  While we wait, Moody's has downgraded the city's
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Phil's Favorites

Jail Wells Fargo CEO and Chairman John Stumpf!

  Jail Wells Fargo CEO and Chairman John Stumpf!

Stumpf's actions were not merely "unethical" — they were criminal. And in the current system, he'll not only get away with it, he'll profit more than handsomely.

Courtesy of NOMI PRINS

(Published at

Consider this. You’re a mob boss. You run a $1.8 trillion network of businesses across state lines and continents. Many of these are legit, but a select subset of them – not so much. Every so often the illegal components flare up; some Washington commission launches an investigation, someone blows a whistle, people lose their homes, a pack of investors sheds a ton of money and lawsuits fly. You get reprimanded and have to pay lawyers and accountants o...

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Case Study Of Henry Singleton And Teledyne

By Jae Jun. Originally published at ValueWalk.

Case Study Of Henry Singleton And Teledyne by Jae Jun


Yesterday, I published a guest post on Leon Cooperman and when this $3.2B man sells his stocks.

Four Reasons to Sell a Stock from a Man Worth $3.2B

It’s interesting how he mixes deep fundamental investing along with basic chart analysis.

Henry Singleton

I just don’t have the time t...

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Market News

News You Can Use From Phil's Stock World


Financial Markets and Economy

Ghost of Lehman Haunts Deutsche Bank (WSJ)

Eight years ago this month, Lehman Brothers failed in large part due to panicked hedge funds pulling their money. With some big hedge funds worried enough to cut their exposure to Deutsche Bank AG, the parallel is obvious—but also deeply misleading.

Deutsche Bank’s shares have plummeted in recent weeks after The Wall Street Journal reported that the U.S. Justice Department suggested the bank pay $14 billion to settle allegations around mortgage securities. The bank expects ...

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Kimble Charting Solutions

Commodities attempting triple breakout, says Joe Friday

Courtesy of Chris Kimble.

Below looks at Commodities ETF DBC over the past decade. Since the highs in 2008, DBC has been a great asset to avoid. Is it time to start paying attention and potentially own this hard hit ETF? Check out the rare price situation below in DBC.


The CRB (Commodities Index) has been down 5-years in a row, this has never happened in the history of commoditi...

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Mapping The Market

The Industry That Was Crushed By The Obama Administration

By Jean-Luc

Good riddance – cleaned up a lot of frauds there:

The Industry That Was Crushed By The Obama Administration

In early 2009, the seven largest publicly traded college operators were worth a combined $51 billion. Today, they’ve been all but wiped out.

When Barack Obama took office, America’s seven largest publicly traded college operators were worth a combined $51 billion, with more than 815,000 students enrolled at campuses spread across the country. The schools were flooded with with people seeking shelter from the recession, returning to school to pick up new skills.

Almost eight years later, the industry has been decimated. The seven largest listed operators are worth just over $6 billion, and the most valuable co...

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Chart School

RTT browsing latest..

Courtesy of Read the Ticker.

Please review a collection of WWW browsing results.

Date Found: Saturday, 26 March 2016, 02:36:15 PM

Click for popup. Clear your browser cache if image is not showing.
Comment: ZH: Its a BULLARD market, the FED jaw boning is keeping the market up!

Date Found: Sunday, 27 March 2016, 02:31:30 PM

Click for popup. Clear your browser cache if image is not showing.
Comment: RTT: World trade near 2008/09 lows. SP500 near all time highs. PLACE YOUR BETS! Roll up! Roll up!

Date Found: Tuesday, 29 March 2016, 02:42:11 PM

Click for popup. Clear your browser cach...

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Swing trading portfolio - week of September 26th, 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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Members' Corner

Market Liquidity and Macroeconomic Bullshit


Market Liquidity and Macroeconomic Bullshit

Courtesy of The Nattering Naybob

STJL - "Apparently macroeconomics is all bullshit – ROFL! Paging Naybob now… Famous Economist Paul Romer Says Macroeconomics Is All Bullshit."

The Nattering One muses... Macroeconomics as practiced by academics and those in charge is pure voodoo. Better to chant over goat blood, bird feathers and scattered entrails...

As for reality, overnight CNH HIBOR (...

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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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