Author Archive for Zero Hedge

Sheep Led To The Slaughter: The Muzzling Of Free Speech In America

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by John Whitehead via The Rutherford Institute,

“If the freedom of speech be taken away, then dumb and silent we may be led, like sheep to the slaughter.”—George Washington

The architects of the American police state must think we’re idiots.

With every passing day, we’re being moved further down the road towards a totalitarian society characterized by government censorship, violence, corruption, hypocrisy and intolerance, all packaged for our supposed benefit in the Orwellian doublespeak of national security, tolerance and so-called “government speech.”

Long gone are the days when advocates of free speech could prevail in a case such as Tinker v. Des Moines. Indeed, it’s been 50 years since 13-year-old Mary Beth Tinker was suspended for wearing a black armband to school in protest of the Vietnam War. In taking up her case, the U.S. Supreme Court declared that students do not “shed their constitutional rights to freedom of speech or expression at the schoolhouse gate.”

Were Tinker to make its way through the courts today, it would have to overcome the many hurdles being placed in the path of those attempting to voice sentiments that may be construed as unpopular, offensive, conspiratorial, violent, threatening or anti-government.

Consider, if you will, that the U.S. Supreme Court, historically a champion of the First Amendment, has declared that citizens can exercise their right to free speech everywhere it’s lawful—online, in social media, on a public sidewalk, etc.—as long as they don’t do so in front of the Court itself.

What is the rationale for upholding this ban on expressive activity on the Supreme Court plaza?

“Allowing demonstrations directed at the Court, on the Court’s own front terrace, would tend to yield the…impression…of a Court engaged with — and potentially vulnerable to — outside entreaties by the public.”

Translation: The appellate court that issued that particular ruling in Hodge v. Talkin actually wants us to believe that the Court is so impressionable that the justices could be swayed by the sight of a single man, civil rights activist Harold Hodge, standing alone and silent in the snow in a 20,000 square-foot space in front of the Supreme Court building wearing a small sign protesting the toll the police state is taking on the lives of black and Hispanic Americans.…
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Circling The Drain….

Courtesy of ZeroHedge. View original post here.

Submitted by dazzak.


So last weeks turmoil is seemingly not over yet…..Was it simply a storm in a teacup brought on by another one of those market tantrums that erupt every now and again to keep everyone on their toes and eventually evaporate? Or was it a significant tremor giving pre warning of a major earthquake to follow?


Historically September and October are not very good months for stocks and there are fundamental arguments for both sides.

The fact is that there is a lot more to worry about than to be confident of. 

There are clearly real concerns both internally and externally that the China’s growth rate is running at closer to 5% than 7%, Brazil and Russia are in recession, 

Emerging market countries are suffering massive capital outflows and are burdened with huge dollar debts, Abenomics is not delivering inflation in Japan, the Eurozone is an invalid, Greece is a month away from another potential exit crisis, Europe faces a migrant crisis and the Middle East is unstable. 

There is plenty of reason to be concerned especially when the global economy is in the anaemic state it is despite a zero interest rate environment and huge injections of QE. At the height of last week’s crisis the proposed responses if the rout continued were for more of the same — QE in China to be added to more QE in Japan and Europe. There was even a suggestion from the president of the Minneapolis Fed that the week’s developments potentially justified “adding accommodation”. All this despite evidence that the impact of each new injection is diminishing and creating side effects that are sowing the seeds of the next financial crisis.


We broke ,we rallied to the multi year trend line  and now we have retreated again…..

Weekly S&P chart:

You really dont need to be a rocket scientist;

What I have not liked from the recent move is that the fixed income market that one would expect to flatten from his point has if fact steepened…this has been down to apparent Chinese liquidation of treasury positions;


With everything for sale…the next 2 months could be quite hairy

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Chinese Stocks Open Down Hard As PBOC Strengthens Yuan By Most Since 2010 & Default Risk Hits 2-Year High

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

From the moment Japan opened, USDJPY buying took off (standard 100 pip rip on absolutely no news whatsoever) as yet another manipulated market breathed new life into equity longs dreams. That 'help' combined with the fact that, as SCMP's George Chen reports, 50 China brokerages will jointly contribute 100 bln RMB capital to the government margin finance agency to start "new round of market rescue" provided some stability after US markets' collapse. However, tonight's big news appears to be a major crackdown on leverage as MNI notes regulators ordering brokerage houses to clear all non-official margin trading services – not just halting new clients but also closing existing accounts. Chinese stocks are opening modestly lower as PBOC fixes Yuan stronger for the 4th day in a row. Finally, China credit risk has spiked to 2-year highs as traders increase positions dramatically. The manipulation will continue through tomorrow at least when Parade Week peaks, so buckle up.

Japan "rescued"… "Mysterious"? – Large USD/JPY Buyer Seen Before Nikkei Index Opened: Traders

China "Stability?"

Though some weakness at the Chinese open:



And then PBOC Strengthens Yuan:


And loses controil of money markets:


This is the biggest 4-day strengthening in 5 years!

But tonight's big news appears be a major clampdown on margin trading (as MNI reports),

China's stock market regulator has issued a circular ordering brokerage houses to clear all non-official margin trading services jointly provided with a third party — not just halting new clients but also closing existing accounts.

Chinese brokerage houses were allowed to offer margin trading services in 2010 but strong stock market performance since last year saw many third parties also providing margin trading services with help from brokerage houses. Beijing realized the potential threat of these fast-growing margin trading services, particularly unofficial ones, and started to push for market deleveraging in late-June this year, contributing to the stock market rout which saw Shanghai Composite

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Macroeconomics Is The Root Of All Error

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Bill Frezza via The Daily Caller,

Will Fed chief Janet Yellen pull the trigger to raise interest rates in September or not? Only the soothsayers at Jackson Hole know for sure. But while the world awaits the decision, ponder this. What do the following have in common?

  • Asset bubbles fueled by monetary policy.
  • Unsustainable sovereign debts threatening government bankruptcies.
  • Government economic “cures” worse than the diseases they are supposed to treat.
  • Questionable GDP statistics.
  • Recurring bank bailouts.

Figured it out yet? They are all driven by an overweening state religion called macroeconomics.

Friedrich Hayek said it best. The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.”

A pity this simple, yet profound insight remains at the fringes of a field that continues to wreak havoc in the hands of those who imagine they can design economic outcomes.

Think about it. We are currently watching global stock markets gyrate toward breakdown trying to anticipate the whims of a cloistered professor who never launched a business, never met a payroll, never shipped a product, and never won an election, yet has been empowered to determine the price of money. What’s even stranger is that people consider this normal. Ask yourself: Why do we wait on pins and needles for Janet Yellen to set interest rates yet laugh at the idea that kings once set the “just price” for a loaf of bread?

That’s where Hayek’s curious task comes in.

The human inclination to seek order in a seemingly chaotic world has long been exploited by generations of pundits, professors, and politicians eager to convince us they can impart certainty to the unknowable.

Note that I say the unknowable, not the unknown. Science has proven quite adept at exploring the unknown. That’s because as science progresses, falsifiable hypotheses that fail to make accurate predictions get discarded in favor of alternatives that do. No so in macroeconomics, whose prognostications bear an uncanny resemblance to predicting the nature of the afterlife. Rather than make continuous progress, the same discredited macroeconomic theories tend to cycle in and out of fashion depending on which court economists have the upper hand
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Wondering Why Dow Futures Just Spiked Over 100 Points?

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Wonder no more…

Get back to work Mr. Kuroda…

But remember – it’s Chinese stocks that are “manipulated” – that is all.

Charts: Bloomberg

“If I Don’t Come Home, Look After My Wife”: What Happens In China If You Sell Stocks

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

It’s probably safe to say that at this point, Beijing is fed up with stocks. 

The thing about equities that has the Politburo so vexed is that it turns out they can go down as well as up, and because stocks aren’t people, you can’t threaten them or arrest them, although China did its best to do both by throwing CNY1 trillion at the problem and by halting nearly three quarters of the market at the height of the meltdown.

Ultimately, none of it worked.

Fortunately for Chinese authorities, carbon-based lifeforms still play an active role in China’s stock market even if they’ve been all but replaced by vacuum tubes elsewhere. These carbon-based lifeforms are responsive to threats and intimidation which is why last week, fearing that the plunge protection effort would end up becoming a black hole, China started arresting people. 

And not just a few people or any people, but in fact hundreds of people and important people.

There was Xu Gang, the CITIC executive. And CSRC official Liu Shufan. And let’s not forget poor Wang Xiaolu, the Caijing reporter who, clearly under duress, made the following public confession after suggesting in a story that China’s plunge protection team might be considering an exit from the market (which is of course true): “I shouldn’t have released a report with a major negative impact on the market at such a sensitive time. I shouldn’t do that just to catch attention which has caused the country and its investors such a big loss. I regret . . . [it and am] willing to confess my crime.” 

Now, China is rounding up other industry players and taking them into custody so that they might “assist with inquiries.” As Reuters reports, for some fund managers, being summoned to to provide such “assistance” is tantamount to getting “sent for” by the Italian mob. Here’s more:

Investigations by Chinese authorities into wild stock market swings are spreading fear among China-based investors, with some unsure if they are simply helping with inquiries or actually under suspicion, executives in the financial community said.

Chinese fund managers say they have come under increasing pressure from Beijing as authorities’ attempts to revive the country’s stock markets hit headwinds, with some investors now being called in to explain trading strategies to regulators every two weeks.


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Guest Post: 10 Things I Hate About (You) Twitter Finance

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.


"You" is used below to indicate "you people" on Twitter Finance. "You people" know who "you" are.

  1. When it comes time for a market correction you make sure to let everyone know that if they would have followed your advice, $29.99 newsletter, or real time alert they would have been fine and avoided disaster.
  2. You are an "expert" in every facet of the economy (Greece, oil, China, Central Banking) yet you graduated with an Art History degree from some community college and live in your parent's basement using Time Warner Cable's 5MB/s internet speed.
  3. You put #timestamps where #timestamps are not needed and then delete tweets when it turns out you were wrong.
  4. You tweet too much and don't click the buy button enough.
  5. After something bad happens, you tweet archaic quotes from 3rd century B.C. Roman poets that no one cares about. (e.g. "Fortune favors the brave." -Aenied)
  6. You consistently quote tweet or RT followers who give you praise for nailing the bottom. (e.g. Thanks! RT @XYZ Great call on $AAPL! Now I'm rich! You nailed it!)
  7. You say "I nailed it" way too much.
  8. You only post about the trades you made money on.  You never post about the trades you lost money on.  This is the oldest trick in the book to make people think you are actually good at what you do and that they should follow you.  They shouldn't.
  9. You incorrectly say $STUDY and annoyingly use it too much.
  10. You post charts that look like this:
If you find that you are pointing to yourself on 5 or more of the bullet items above please delete your Twitter account immediately.


Trump: The Art Of The Bureaucrat

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Doug French via Mises Canada,

Donald Trump says America’s problems are managerial. The political class is “stupid,” and “horrible negotiators.” He can fix the country’s problems instantaneously with his own entrepreneurial ability and by drafting into government service the likes of multi-billionaire Carl Icahn. Trump claims he said over dinner recently,  “Carl, if I get this thing, I want to put you in charge of China and Japan, can you handle both of them? Okay? China and Japan,”

We’re to imagine Icahn telling his Washington secretary, “Get me China on the phone!” As Jeffrey Tucker explains, Trump sees the country as a single company competing against the companies of China and Japan Inc.. Tucker writes,

In effect, he believes that he is running to be the CEO of the country — not just of the government (as Ross Perot once believed) but of the entire country. In this capacity, he believes that he will make deals with other countries that cause the U.S. to come out on top, whatever that could mean. He conjures up visions of himself or one of his associates sitting across the table from some Indian or Chinese leader and making wild demands that they will buy such and such amount of product else “we” won’t buy their product.

Republican voters love it. He’s a breath of fresh, simple, political air. Maybe you’re a smartypants who thinks Trump’s tirades border on moronic. That’s because his answers scored at the 4th-grade reading level during the August 6th debate when the text of his answers was run through the Flesch-Kincaid grade-level test. Most adults wouldn’t pride themselves on speaking at that level, but, a certain financial newsletter operation I know wants their writers to produce Trump-level copy.  So, there must be a market Trumpspeak.

“The role Trumpspeak has played in Trump’s surging polls suggests that perhaps too many politicians talk over the public’s head when more should be talking beneath it in the hope of winning elections,” Jack Shafer concludes in his Politico piece.

So if short, blocky words, combined into short, blocky sentences and in turn short, blocky paragraphs works wondrously with the voters, how about the federal bureaucracy The Donald would have to manage? Not that he really wants to manage the leviathan.  Donny Deutsch was probably right when…
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How To Trade Quantitative Tightening, According To Deutsche Bank

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Last week, the world was introduced to what Deutsche Bank has branded “quantitative tightening” or, in layman’s terms, “reverse QE.”

In short, what began late last year with the death of the petrodollar and culminated last month with China’s massive UST liquidation can be broadly conceptualized as the end of the great EM USD asset accumulation or, put differently, as the (black?) swan song for the era of emerging market FX reserve hoarding that has for years served as a source of liquidity for global markets and kept a bid under assets like USTs. 

We – as well as Citi, SocGen, and now Deutsche Bank – have endeavored to speculate on what hundreds of billions (if not trillions) in EM FX reserve liquidation may mean for UST yields (see here, for instance), but if you’re looking for other ways to trade QT, Deutsche Bank has another idea and on that note we present the following graphs along and commentary from DB, with the caveat that one should always beware of mistaking correlation for causation.

From Deutsche Bank:

The fact that two thirds of global reserves are held in dollars means that a sell-off should be bullish USD against other reserve currencies. This is because as central banks prop up their currencies against the dollar, they also sell other reserve currencies against the USD so as to keep their FX allocations constant. Indeed, fluctuations in EUR/USD are tightly correlated with changes in global reserves (Figure 25), though this correlation naturally captures causality in both directions.

Sep 2 – Dow Sinks Over 400 Points as Weak China Data Batter U.S. Stocks

Courtesy of ZeroHedge. View original post here.

Submitted by Pivotfarm.






Put and Call Options: EXTREME FEAR During the last five trading days, volume in put options has lagged volume in call options by 24.03% as investors make bullish bets in their portfolios. However, this is still among the highest levels of put buying seen during the last two years, indicating extreme fear on the part of investors.

Market Volatility:  EXTREME FEAR The CBOE Volatility Index (VIX) is at 31.40 and indicates that investors remain concerned about declines in the stock market.

Stock Price Strength: EXTREME FEAR The number of stocks hitting 52-week lows is slightly greater than the number hitting highs and is at the lower end of its range, indicating extreme fear.


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Zero Hedge

Sheep Led To The Slaughter: The Muzzling Of Free Speech In America

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by John Whitehead via The Rutherford Institute,

“If the freedom of speech be taken away, then dumb and silent we may be led, like sheep to the slaughter.”—George Washington

The architects of the American police state must think we’re idiots.

With every passing day, we’re being moved further down the road towards a totalitarian society characterized by go...

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Market News

News You Can Use From Phil's Stock World


Financial Markets and Economy

Americans' confidence in the economy has plunged to an 11-month low (Business Insider)

Americans' confidence in the economy continues to slide.

Who Crashed China's Stock Market? (The Atlantic)

China’s stock markets continue to stumble, despite the massive stimulus that the government has unleashed to prop them up. The Shanghai benchmark index fell by 1.23 percent Tuesday, after closing down slightly Monday. The index has fallen by nearly 40 percent from its mid-June peak.


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Phil's Favorites

6 reasons the FOMC is unlikely to move in September


6 reasons the FOMC is unlikely to move in September

Courtesy of Sober Look

The majority of economists still expect the Federal Reserve to begin the long-awaited liftoff next month.

However is this dovish FOMC truly prepared to "pull the trigger" this time? Here are some reasons the central bank is likely to delay the first hike.

1. While the Fed officially talks about not being focused on the currency markets, the recent dollar rally should give them some food for thought. The global "currency wars" have sent the trade-weighted US dollar to the highest levels in over a decade. This will conti...

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Chart School

Distribution Selling Returns

Courtesy of Declan.

After the late recovery last week, sellers again made markets their home. Sizable losses were accompanied with higher volume distribution, although volume was down on earlier panic.  Another pass at August lows looks likely.

The S&P is again heading to the 10% 200-day MA envelope. Relative performance is shifting away from Large Caps to more speculative indices, which is bullish in a rising market, but in a falling market suggests a lack of sanctuary.

The Nasdaq is also in the early stages of a retest of the August low. Technicals are weak, although stochastics crept above the bullish mid-line, but not enough to suggest ...

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All About Trends

Mid-Day Update

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

Click here for the full report.

To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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Kimble Charting Solutions

Nikkei (Japan) topped last 5 times it was here, its back again!

Courtesy of Chris Kimble.


Could a price zone that started impacting the Nikkei 30-years ago still impact it again today? Well it looks like it is!

The Nikkei found the 21,000 level, line (1), to be support several times between 1987 and 1992. Once this support broke it then switched from a support to a resistance level.

As you can see several times from 1992 to 2000 the Nikkei ran into this resistance zone and failed to solidly break above it, leading to a top numerous times. The last time it hit this resistance zone was back in 2000. After failing to break above resistance then, it ...

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Swing trading portfolio - week of August 31st, 2015

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


This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...

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Sector Detector: Finally, market capitulation gives bulls a real test of conviction, plus perhaps a buying opportunity

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

Courtesy of Sabrient Systems and Gradient Analytics

The dark veil around China is creating a little too much uncertainty for investors, with the usual fear mongers piling on and sending the vast buy-the-dip crowd running for the sidelines until the smoke clears. Furthermore, Sabrient’s fundamentals-based SectorCast rankings have been flashing near-term defensive signals. The end result is a long overdue capitulation event that has left no market segment unscathed in its mass carnage. The historically long technical consolidation finally came to the point of having to break one way or the other, and it decided to break hard to the downside, actually testing the lows from last ...

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Some Hedge Funds "Hedged" During Stock Market Sell Off, Others Not As Risk Focused

By Mark Melin. Originally published at ValueWalk.

With the VIX index jumping 120 percent on a weekly basis, the most in its history, and with the index measuring volatility or "fear" up near 47 percent on the day, one might think professional investors might be concerned. While the sell off did surprise some, certain hedge fund managers have started to dip their toes in the water to buy stocks they have on their accumulation list, while other algorithmic strategies are actually prospering in this volatile but generally consistently trending market.

Stock market sell off surprises some while others were prepared and are hedged prospering

While so...

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Digital Currencies

Bitcoin Battered After "Governance Coup"

Courtesy of ZeroHedge. View original post here.

Naysyers are warning that the recent plunge in Bitcoin prices - from almost $318 at its peak during the Greek crisis, to $221 yesterday - is due to growing power struggle over the future of the cryptocurrency that is dividing its lead developers. On Saturday, a rival version of the current software was released by two bitcoin big guns. As Reuters reports, Bitcoin XT would increase the block size to 8 megabytes enabling more transactions to be processed every second. Those who oppose Bitcoin XT say the bigger block size jeopardizes the vision of a decentralized payments system that bitcoin is built on with some believing ...

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Baxter's Spinoff

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

Baxter Int. (BAX) is splitting off its BioSciences division into a new company called Baxalta. Shares of Baxalta will be given as a tax-free dividend, in the ratio of one to one, to BAX holders on record on June 17, 2015. That means, if you want to receive the Baxalta dividend, you need to buy the stock this week (on or before June 12).

The Baxalta Spinoff

By Ilene with Trevor of Lowenthal Capital Partners and Paul Price

In its recent filing with the SEC, Baxter provides:

“This information statement is being ...

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Mapping The Market

An update on oil proxies

Courtesy of Jean-Luc Saillard

Back in December, I wrote a post on my blog where I compared the performances of various ETFs related to the oil industry. I was looking for the best possible proxy to match the moves of oil prices if you didn't want to play with futures. At the time, I concluded that for medium term trades, USO and the leveraged ETFs UCO and SCO were the most promising. Longer term, broader ETFs like OIH and XLE might make better investment if oil prices do recover to more profitable prices since ETF linked to futures like USO, UCO and SCO do suffer from decay. It also seemed that DIG and DUG could be promising if OIH could recover as it should with the price of oil, but that they don't make a good proxy for the price of oil itself. 


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Watch the Phil Davis Special on Money Talk on BNN TV!

Kim Parlee interviews Phil on Money Talk. Be sure to watch the replays if you missed the show live on Wednesday night (it was recorded on Monday). As usual, Phil provides an excellent program packed with macro analysis, important lessons and trading ideas. ~ Ilene


The replay is now available on BNN's website. For the three part series, click on the links below. 

Part 1 is here (discussing the macro outlook for the markets) Part 2 is here. (discussing our main trading strategies) Part 3 is here. (reviewing our pick of th...

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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!

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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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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