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3 WTF Charts

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Something doesn’t add up here… (and rumors of heavy institutional selling is not helping)

 

Breadth is weak…

 

and flows are diverging…

The average Russell 2000 stock is -20% under its 52 week high

And High Yield credit is flashing bright red…

 

As Barclays Phil Solarz warns,

One of the things that sticks in my mind from 2007 (and I am NOT suggesting a 2007/2008 repeat here) is the fact that the credit markets moved before equity markets….and not just once, but three or four times through 2007 and 2008.

 

I recall looking at charts like the attached and thinking “why has this correlation broken down?”

 

Inevitably, the credit markets would be right, and the equity market would eventually catch up and re-establish the correlation.

 

The chart above shows (the inverse of) the junk-less-10 year spread vs the S&P. The tight correlation of the past 12 months (and actually, the last 3 years) has broken down this month.

Charts: JC O’Hara at FBN Securities, @Not_Jim_Cramer, Barclays





White House Retaliates, “Condemns” Israeli Shelling Of UN School In Gaza

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

It was only a matter of time.

Following yesterday’s scandalous release of the Obama-Natanyahu phone call transcript by Israel’s Channel 1, which officials on both sides have claimed was a fake (due to its clearly negative implications for US foreign policy which appears painfully weak) yet which the media outlet has defended as authentic, citing a “senior American official” as a source, one was wondering how long it would take for the White House to “teach” Israel a lesson, and put it in its place. The answer: less than 24 hours. Moments ago, the White House officially “condemned” the shelling of a United Nations school in Gaza that local authorities estimated killed at least 15 Palestinians who were sheltering there.

Still, to appear measured, the US also condemned Hamas, although indirectly: “We are extremely concerned that thousands of internally displaced Palestinians who have been called on by the Israeli military to evacuate their homes are not safe in U.N. designated shelters in Gaza,” White House National Security Council spokeswoman Bernadette Meehan said, cited by Reuters. “We also condemn those responsible for hiding weapons in United Nations facilities in Gaza.”

As AP adds, this is “the sharpest criticism the U.S. has leveled at Israel over the more than three weeks of fighting between Israel and Hamas militants in Gaza.” In fact, it may be the first time in recent history when the US has condemned anything to do with Israel.

Exciting, yes?

No, not really, because as everything else coming out of the White House in the past 6 years, this too was merely for popular theater purposes.

How do we know? Because this hit moments later.





Stocks Give Up Post-FOMC Gains, Dollar Drops, Gold Flat

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Oil prices are holding below $100 and gold (after oscillating) is flat post FOMC. Stocks have roundtripped and given up the kneejerk gains as the USDollar has sold off notably (retracing its gains from GDP earlier in the day). Treasury yields are lower post-FOMC.

 

 

 

Charts: Bloomberg





G7 Condemns Acts In Ukraine, Threatens To “Intensify The Costs” On Russia

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

As had been rumored all day, The G7 just issued yet another statement on Ukraine showing its wholehearted support for sanctions:

  • *G-7 LEADERS ISSUE STATEMENT CONDEMNING RUSSIAN ACTS IN UKRAINE
  • *G-7 LEADERS SAY READY TO ‘INTENSIFY THE COSTS’ ON RUSSIA

The statement, released by The White House, also demands “transparent” access to the MH17 crash site. As this was released, the EU announced its sanctions list (8 people, 3 entities).

 

As Bloomberg reports, The G7 Statement noted,

“We once again condemn Russia’s
illegal annexation of Crimea, and actions to de-stabilize eastern Ukraine,” G-7 leaders say in statement released by White House.

 

“Those actions are unacceptable and violate international law”

 

Demand “prompt, full, unimpeded and transparent” intl investigation into downing of Malaysian Airline plane

 

“We remain convinced that there must be a political solution to the current conflict,” yet ready to add more sanctions if Russia doesn’t change course

Then Europe released its sanctions list:

  • *EU ADDS EIGHT PEOPLE, THREE ENTITIES TO UKRAINE SANCTIONS LIST
  • *EU NAMES RUSSIAN OLIGARCH ARKADY ROTENBERG TO SANCTIONS LIST
  • *EU ADDS RUSSIA’S YURIY KOVALCHUK, ALEXEY GROMOV TO BLACKLIST

Full list here:





Fed Tapers Another $10 Billion, Raises Inflation Concerns, Plosser Dissents – Statement Redline

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

As expected, The FOMC continued its taper pace at $10bn but what was supposed to be a ‘steady as she goes’ statement had a few surprises:

  • *PLOSSER DISSENTS ON DECISION, CITING GUIDANCE ON RATE OUTLOOK
  • *FOMC SEES SIGNIFICANT UNDERUTILIZATION OF LABOR RESOURCES
  • *FOMC: ODDS OF PERSISTENT SUB-2% INFLATION `DIMINISHED SOMEWHAT’

More of the same but some modestly hawkish sentiment sneaking in regarding improving labor markets. Oddly – no trade recommendations from Yellen

Of note, the addition of the following language about labor slack:

… a range of labor market indicators suggests that there remains significant underutilization of labor resources…

Remember when the Fed had a 6.5% unemployment target for “slack”? It appears that the Fed continues to understand that it is not just jobs, part-time agem, but wages that matter. And as we have shown repeatedly, real wages continue to decline.

As for inflation, the language…

“inflation running persistently below its 2 percent objective could pose risks to economic performance, and it is monitoring inflation developments carefully for evidence that inflation will move back toward its objective over the medium term”

… has been struck, and replaced with the following:

Inflation has moved somewhat closer to the Committee’s longer-run objective. Longer-term inflation expectations have remained stable…  the likelihood of inflation running persistently below 2 percent has diminished somewhat

Plosser objected “to the guidance indicating that it likely will be appropriate to maintain the current target range for the federal funds rate for “a considerable time after the asset purchase program ends,” because such language is time dependent and does not reflect the considerable economic progress that has been made toward the Committee’s goals.”

The conclusion: “The Committee currently judges that there is sufficient underlying strength in the broader economy to support ongoing improvement in labor market conditions.”

So… rate hike any second, right?

Market Pre-FOMC: S&P Futs 1961.5, 10Y 2.55%, JPY 102.90, Gold $1294

Full statement redline:





WTI Crude Oil Tumbles Below $100 – 10-Week Lows

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

It appears global geopolitical risk is fixed… WTI crude futures have tumbled back below $100 this afternoon to their equal lowest since early May. Despite warnings from Russia over higher energy prices, oil is well below MH17 headlines levels…

 





FOMC Preview: Dashboards, Dissent, & “Degree-Of-Accommodation” Differences

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

“More of the same,” should summarize today’s FOMC statement. There will be no press conference or refresh of the ‘dot plot’ economic projections. The Fed is expected to continue to taper by $10 billion with confirmation that the “growth meme” is playing out just as they projected (especially after today’s GDP print). Goldman believes the focus will be on the jobs ‘dashboard’ and recent inflation data enables the dovish Fed to argue recent moves were noise and stay easier for longer. The downside risk (for markets) may be that Fed hawks will likely have little luck in altering the way forward guidance is employed by the Fed (and chatter over a Fisher dissent is possible).

 

RanSquawk’s FOMC PREVIEW

  • Fed expected to taper by USD 10bln again, taking monthly bond buys down to USD 25bln from USD 35bln
  • Yet again, all focus on rate pathway and projections for the first Fed Fund Rate (FFR) hike by Fed officials
  • There will be no press conference from Fed Chair Yellen or release of Summary of Economic Projections alongside the decision

TAPERING: The latest announcement from the Fed which coincides with a slew of key economic data such as an initial estimate of growth in the Q2 and the monthly jobs report release by the BLS is expected to result in the Federal Reserve members agreeing on another USD 10bln taper. Likelihood of a larger USD 15bln taper are rather small, as this would almost inevitably risk resulting in a repeat of the “taper tantrum” price action observed last year.

RATES: The accompanying statement is likely to be tweaked to emphasise not only the pickup in growth, but also the subdued and contained nature of inflation expectations. At the same time, members of the Federal Reserve board will continue to actively look at various price measures including wage inflation and debate on the best method for raising rates. As such, despite a potentially more upbeat statement, Fed hawks will likely have little luck in altering the way forward guidance is employed by the Fed, with Fed Fund Rate futures pricing in the first rate hike in June 2015. There is however a risk as noted by analysts at JP Morgan that changing description of unemployment from “elevated” to “somewhat elevated” would allow for a more gradual…
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French Housing “In Total Meltdown”, “Current Figures Are Disastrous”

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

If Venezuela is the case study of a country in the late stages of transition into a socialist utopia, then France is the clear runner up. The most recent case in point, aside from the already sliding French economy, whose recent contraction can be best seen be deteriorating PMI data…

… which hints at the dreaded “triple dip” recession, nowhere is the economic collapse in France more evident than in its housing market which as even Bloomberg admits, citing industry participants, is now “in total meltdown.

The reason? The belief of the socialist president that a few economists know better than the overall market, especially when the sanctity of the “fairness doctrine” and the greater good is to be upheld at all costs. To wit: “French President Francois Hollande’s government may have made a housing slump worse, pushing the construction market to its lowest in more than 15 years. Housing starts fell 19 percent in the second quarter from a year earlier, and permits — a gauge of future construction — dropped 13 percent, the French Housing Ministry said yesterday.

The reason: a law that was passed this year that seeks to make housing more affordable by capping rents in expensive neighborhoods. To protect home buyers, the law also boosted the number of documents that must be provided by sellers, leading to a decline in home sales and longer transaction times.

Of course, it didn’t take long for the government to realize its mistake and to scramble to adjust the rules, but “the damage is done, threatening France’s anemic recovery that’s already lagging behind those of the U.K. and Germany.”

Enter the soundbites: “Construction is in total meltdown,” said Dominique Barbet, an economist at BNP Paribas in Paris. “It’s difficult to see how the new housing law is not to blame.”

Barbet says the drop in home building lopped 0.4 points off France’s gross domestic product growth last year and cut the pace of expansion by a third in the first quarter. Expenditure in the sector was at its lowest level ever as a portion of total real GDP in the first quarter at 4.7 percent, down from 6.3 percent in the first three months of 2007, he estimates.

Sales of new-build homes fell 5 percent in the first quarter from…
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President Obama To Explain How Inventory Stuffing Is Good For All Of Us – Live Feed

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

A 4.0% GDP print – time to get out in front of the people and take the credit…

 





A SKeLeToN OF HiS OWN…

Courtesy of ZeroHedge. View original post here.

Submitted by williambanzai7.





 

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!

 
 

Phil's Favorites

Memo to CAPE Slaves

Memo to CAPE Slaves Courtesy of    You don’t hear much out of the adherents of CAPE these days, as even its most ardent fans have given up on it as a timing tool.

Earlier this year and during much of last year, I’d taken the Cyclically Adjusted Price-Earnings ratio to task for various reasons, most notably the fact that it didn’t allow for accounting changes (GAAP losses are recorded differently), structural changes in our economy (are we all still farmers?), structural changes in the makeup of the stock market (isn’t software inherently more profitable than railroading?), taxation (dividends get preferential treatment versus ordinary income) etc. See ...



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Chart School

Visualizing GDP: Dissecting the Q2 Advance Estimate

Courtesy of Doug Short.

Note from dshort: The charts in this commentary have been updated to include the Q2 2014 Advance Estimate.

The chart below is my way to visualize real GDP change since 2007. I've used a stacked column chart to segment the four major components of GDP with a dashed line overlay to show the sum of the four, which is real GDP itself. Here is the latest overview from the Bureau of Labor Statistics:

The increase in real GDP in the second quarter primarily reflected positive contributions from personal consumption expenditures (PCE), private inventory investment, exports, nonresidential fixed investment, state and local government spending, and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.

Let's take a closer look at the contributions of GDP of the four major subcomponents. My ...



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Zero Hedge

3 WTF Charts

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Something doesn't add up here... (and rumors of heavy institutional selling is not helping)

 

Breadth is weak...

 

and flows are diverging...

The average Russell 2000 stock is -20% under its 52 week high

And High Yield credit is flashing bright red...

 

As Barc...



more from Tyler

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

Orbitz Worldwide Annouces Large Stakeholder Will Sell Shares In Public Offering

Courtesy of Benzinga.

Related OWW Morning Market Losers UPDATE: Oppenheimer Initiates Coverage On Orbitz Powerful Proxy Adviser Blasts Target Board Over Breach (Fox Business)

In a press release Wednesday, Orbitz Worldwide (NYSE: OWW) announced its largest stakeholder will sell 20 million shares of the company.

Orbitz released a separate press release stating mostly ...



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Option Review

Kellogg Call Options Active Ahead Of Earnings

Shares in packaged foods producer Kellogg Co. (Ticker: K) are in positive territory on Monday afternoon, trading up by roughly 0.20% at $65.48 as of 2:20 p.m. ET. Options volume on the stock is well above average levels today, with around 12,500 contracts traded on the name versus an average daily reading of around 1,700 contracts. Most of the volume is concentrated in September expiry calls, perhaps ahead of the company’s second-quarter earnings report set for release ahead of the opening bell on Thursday. Time and sales data suggests traders are snapping up calls at the Sep 67.5, 70.0 and 72.5 strikes. Volume is heaviest in the Sep 72.5 strike calls, with around 4,600 contracts traded against sizable open interest of approximately 11,800 contracts. It looks like traders paid an average premium of $0.37 per contrac...



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Sabrient

Sector Detector: Bold bulls dare meek bears to take another crack

Courtesy of Sabrient Systems and Gradient Analytics

Once again, stocks have shown some inkling of weakness. But every other time for almost three years running, the bears have failed to pile on and get a real correction in gear. Will this time be different? Bulls are almost daring them to try it, putting forth their best Dirty Harry impression: “Go ahead, make my day.” Despite weak or neutral charts and moderately bullish (at best) sector rankings, the trend is definitely on the side of the bulls, not to mention the bears’ neurotic skittishness about emerging into the sunlight.

In this weekly update, I give my view of the current market environment, offer a technical analysis of the S&P 500 chart, review our weekly fundamentals-based SectorCast rankings of the ten U.S. business sectors, and then offer up some actionable trading ideas, incl...



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OpTrader

Swing trading portfolio - week of July 28th, 2014

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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Stock World Weekly

Stock World Weekly

Newsletter writers are available to chat with Members regarding topics presented in SWW in the comments below each post. 

Our weekly newsletter Stock World Weekly is ready for your enjoyment.

Read about the week ahead, trade ideas from Phil, and more. Please click here and sign in with your PSW user name and password. Or take a free trial.

We appreciate your feedback--please let us know what you think in the comment section below.  

...

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Digital Currencies

BitLicense Part 1 - Can Poorly Thought Out Regulation Drive the US Economy Back into the Dark Ages?

Courtesy of Reggie Middleton.

An Op-Ed piece penned by Veritaseum Chief Contracts Officer, Matt Bogosian

This past weekend (despite American Airlines' best efforts), Reggie and I made it to the Second Annual North American Bitcoin Conference in Chicago. While there were some very creative (and very ambitious) ideas on how to try to realize the disruptive Bitcoin protocol, one of the predominant topics of discussion was New York Superintendent of Financial Services Benjamin Lawsky's proposed Bitcoin regulations (the BitLicense proposal) - percieved by many participants at the event as an apparent ...



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Market Shadows

Danger: Falling Prices

Danger: Falling Prices

By Dr. Paul Price of Market Shadows

 

We tried holding up stock prices but couldn’t get the job done. Market Shadows’ Virtual Value Portfolio dipped by 2% during the week but still holds on to a market-beating 8.45% gain YTD. There was no escaping the downdraft after a major Portuguese bank failed. Of all the triggers for a large selloff, I’d guess the Portuguese bank failure was pretty far down most people's list of "things to worry about." 

All three major indices gave up some ground with the Nasdaq composite taking the hardest hi...



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Pharmboy

Biotechs & Bubbles

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

Well PSW Subscribers....I am still here, barely.  From my last post a few months ago to now, nothing has changed much, but there are a few bargins out there that as investors, should be put on the watch list (again) and if so desired....buy a small amount.

First, the media is on a tear against biotechs/pharma, ripping companies for their drug prices.  Gilead's HepC drug, Sovaldi, is priced at $84K for the 12-week treatment.  Pundits were screaming bloody murder that it was a total rip off, but when one investigates the other drugs out there, and the consequences of not taking Sovaldi vs. another drug combinations, then things become clearer.  For instance, Olysio (JNJ) is about $66,000 for a 12-week treatment, but is approved for fewer types of patients AND...



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Promotions

See Live Demo Of This Google-Like Trade Algorithm

I just wanted to be sure you saw this.  There’s a ‘live’ training webinar this Thursday, March 27th at Noon or 9:00 pm ET.

If GOOGLE, the NSA, and Steve Jobs all got together in a room with the task of building a tremendously accurate trading algorithm… it wouldn’t just be any ordinary system… it’d be the greatest trading algorithm in the world.

Well, I hate to break it to you though… they never got around to building it, but my friends at Market Tamer did.

Follow this link to register for their training webinar where they’ll demonstrate the tested and proven Algorithm powered by the same technological principles that have made GOOGLE the #1 search engine on the planet!

And get this…had you done nothing b...



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