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Frontrunning: October 24

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

  • Doctor with Ebola in New York hospital after return from Guinea (Reuters)
  • Ebola Puts Spotlight on Bellevue, Key NYC Trauma Center (WSJ)
  • Uber Driver Transported Ebola-Positive Doctor in New York (BBG)
  • GOP Gains in Key Senate Races as Gender Gap Narrows (WSJ)
  • ECB Tries for Third Time Lucky in European Stress Tests (BBG)
  • Security tight in Canada as police probe Parliament gunman’s ties (Reuters)
  • Why Madrid’s poor fear Goldman Sachs and Blackstone (Reuters)
  • Fed’s $4 Trillion Holdings Keep Boosting Growth Beyond End of QE (BBG)
  • Cold War Banker to Putin Billionaires Walks Sanction Wire (BBG)
  • Ground offensive against Islamic State months away in Iraq (Reuters)
  • Bank Breakup Plan Hits More EU Hurdles as Danes Reject Idea (BBG)
  • Servicing JFK Airliners for Decades, Now There’s Ebola (BBG)
  • New York police officer critically wounded in hatchet attack (Reuters)
  • China Scores Cheap Oil 14,000 Miles Away as Glut Deepens (BBG)

 

 

Overnight Media Digest

WSJ

* A doctor who had returned to New York City recently after treating Ebola patients in West Africa tested positive for the virus on Thursday, officials said, setting up a new test for the nation’s ability to control the spread of the deadly disease. (http://on.wsj.com/1wvvsql)

* A number of details about Michael Zehaf-Bibeau, who killed a Canadian soldier and thrust the government into a terrified lockdown on Wednesday, emerged that began to fill in a picture of a middle-class suburban youth who grew estranged from his family and descended into a string of petty crimes. (http://on.wsj.com/1z2Sebz)

* In a warning flag for Democrats, recent polls suggest the party is failing to draw enough support from women in three key Senate races – in Iowa, Arkansas and Colorado – to offset the strong backing that men are giving to Republicans. (http://on.wsj.com/1nBCDf0)

* The travails at Gucci are emblematic of the problems afflicting fashion’s big power houses. (http://on.wsj.com/1uNAjyR)

* Amazon.com Inc’s soaring ambitions are coming at a steep cost, dragging the e-commerce giant to its largest quarterly loss in 14 years. (http://on.wsj.com/1wnXRxD)

* Canada’s chief energy regulator said Thursday a municipality along the route of a crude-oil pipeline cannot stop an affiliate of Kinder Morgan Energy Partners from…
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Overnight Futures Fail To Ramp As Algos Focus On New York’s First Ever Ebola Case

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

And just like that, the Ebola panic is back front and center, because after one week of the west African pandemic gradually disappearing from front page coverage and dropping out of sight and out of mind, suddenly Ebola has struck at global ground zero. While the consequences are unpredictable at this point, and a “follow through” infection will only set the fear level back to orange, we applaud whichever central bank has been buying futures (and the USDJPY) because they clearly are betting that despite the first ever case of Ebola in New York, that this will not result in a surge in Ebola scare stories, which as we showed a few days ago, may well have been the primary catalyst for the market freakout in the past month.

For those who missed events last night, a doctor in New York City who recently returned from treating Ebola patients in Guinea has become the first person in New York City to test positive for the virus. Officials told a press conference at Bellevue hospital that they were monitoring 4 people with whom Spencer had contact. His fiancée and two friends had been quarantined, while the fourth person, a taxi driver, was not considered to be at risk

So with Ebola roaring back, many are wondering if the same fears that sent the market turmoiling in late September and early October will also return, most prominently global commodity deflation, slamming the EMs.  In this regard, commodity markets remain relatively tentative nonetheless, WTI crude futures trade in the red in a continuation of recent losses, with BofA seeing downside risks to WTI oil prices over the next three months. In terms of metal specific news, China’s copper production rose to a record high in September of 715,000 tonnes, an increase of 5% M/M and analysts at Goldman Sachs say that iron ore prices should remain supported in the short term, adding there is no obvious catalyst that would drive prices outside the recent range.

In other market news, Asian equities traded mostly higher, albeit off their best levels following notable weakness observed across US equity futures after confirmation that a patient who was being tested for Ebola in NYC tested positive for the disease. Nikkei 225 (+1%) shrugged off the negative sentiment seen across US…
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NYC Doctor Confirmed Positive For Ebola; Contact With Girlfriend (Quarantine) & 3 Others; “Unlikely” Contagious On Subway

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

UPDATE:

  • *PATIENT IN NYC TESTS POSITIVE FOR EBOLA, NEW YORK TIMES SAYS
  • *NYC EBOLA PATIENT GIRLFRIEND QUARANTINED: CNN
  • *S&P 500, NASDAQ 100 FUTURES EXTEND DECLINES ON EBOLA REPORT
  • *TREASURIES ADVANCE AS NYC EBOLA REPORT SPURS DEMAND FOR SAFETY

 

 

Press Conference Live Feed (via NYC Live)

Headlines from the press conference:

De Blasio:

  • *TESTING CONFIRMS PATIENT IS POSITIVE FOR EBOLA: DE BLASIO
  • *NYC HAS PREPARED FOR MONTHS FOR THREAT FROM EBOLA: DE BLASIO
  •  *BELLEVUE HOSPITAL IN NYC IS A DESIGNATED EBOLA CENTER
  • *EVERY HOSPITAL IN NYC PREPARED FOR PATIENTS: DE BLASIO

Cuomo: “There is no reason for New Yorkers to be alarmed”

  • *NYC HAD BENEFIT OF LEARNING FROM DALLAS: CUOMO
  • *EBOLA PATIENT HAD WORKED WITH DOCTORS WITHOUT BORDERS: CUOMO
  • *NEW YORK `FULLY COORDINATED WITH AGENCIES, U.S. GOV.: CUOMO
  • *HAVE IDENTIFIED 4 PEOPLE IN CONTACT WITH EBOLA PATIENT: CUOMO
  • *HEALTH OFFICIALS IN CONTACT WITH THOSE IDENTIFIED: CUOMO

Mary Basset – NYC Health Commissioner

  • *HOSPITAL EBOLA TEST TO BE CONFIRMED BY CDC WITHIN 24 HRS
  • *EBOLA PATIENT RETURNED TO NYC FROM GUINEA THIS MONTH: BASSETT
  • *EBOLA PATIENT HAD SYMPTOMS BEGIN EARLIER TODAY: BASSETT
  • *NYC EBOLA PATIENT LEFT GUINEA ON OCT. 14: BASSETT
  • *NYC EBOLA PATIENT HAD FIRST FEVER SYMPTOM TODAY: BASSETT
  • *NYC EBOLA PATIENT WENT ON 3-MILE JOG: BASSETT
  • *NYC EBOLA PATIENT WENT TO BOWLING ALLEY YESTERDAY: BASSETT
  • *EBOLA PATIENT USED SUBWAYS, WENT TO BOWLING ALLEY: BASSETT
  • *EBOLA PATIENT HAD CONTACT WITH GIRLFRIEND, 2 FRIENDS: BASSETT
  • *TRANSPORTATION DRIVER NOT THOUGHT TO BE AT RISE: BASSETT
  • *UBER DRIVER IN CONTACT W/ PATIENT CONSIDERED NOT AT RISK

Zucker – Acting health commissioner:

  • *EBOLA PATIENT BROUGHT TO HOSPITAL WITH


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“Why I Will Not Submit To Medical Martial Law”

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Brandon Smith of Alt-Market.com,

One of the most dangerous philosophical contentions even amongst liberty movement activists is the conundrum of government force and prevention during times of imminent pandemic. All of us at one time or another have had this debate. If a legitimate viral threat existed and threatened to infect and kill millions of Americans, is it then acceptable for the government to step in, remove civil liberties, enforce quarantines, and stop people from spreading the disease? After all, during a viral event, the decisions of each individual can truly have a positive or negative effect on the rest of society, right? One out of control (or “lone wolf”) citizen/terrorist could reignite a biological firestorm, so, should we not turn to government and forgo certain freedoms in order to achieve the greater good for the greater number?

If the government in question was a proven and honorable institution, then I would say pro-Medical Martial Law arguments might have a leg to stand on. However, this is not the case. In my view, medical martial law is absolutely unacceptable under ANY circumstances, including Ebola, in light of the fact that our current government will be the predominant cause of viral outbreak. That is to say, you DO NOT turn to the government for help when the government is the cause of the problem.

The recent rise of global Ebola is slowly bringing the issue of medical martial law to the forefront of our culture. Charles Krauthammer at The Washington Post recently argued in favor of possible restrictions on individual and Constitutional liberties in the face of a viral pandemic threat.

The CDC now argues that in the case of people who may be potential carriers, or even in the case of people who refuse to undergo screenings, it has the legal authority to dissolve all constitutional protections and essentially imprison (quarantine) an American citizen for as long as they see fit to do so.

The Obama Administration is now using militant terminology in reference to Ebola response, including the formation of “Ebola SWAT Teams” for quick reaction to potential outbreak areas.

In typical socialist fashion, the nurses union 'National Nurses United' has called for Barack Obama to use “executive authority” to take control of all Ebola…
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Van Hoisington And The Fed’s Bubble: “Overtrading” And “Discredit” Always End In “Revulsion”

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Excerpted from Hoisington Investment Management’s Quarterly Outlook,

via Van Hoisington and Lacy Hunt:

The U.S. economy continues to lose momentum despite the Federal Reserve’s use of conventional techniques and numerous experimental measures to spur growth. In the first half of the year, real GDP grew at only a 1.2% annual rate while real per capita GDP increased by a minimal 0.3% annual rate. Such increases are insufficient to raise the standard of living, which, as measured by real median household income, stands at the same level as it did seventeen years ago.

Asset Bubbles

Historically, in our judgment, the most important authority on the subject of asset bubbles was the late MIT professor Charles Kindleberger, author of 20 books including the one of the greatest books on capital markets Manias, Panics and Crashes (1978). He found that asset price bubbles depend on the growth of credit. Atif Mian (Princeton) and Amir Sufi (University of Chicago) provided confirmation for Kindleberger’s pioneering work and expanded on it in their 2014 book House of Debt. Chapter 8, entitled “Debt and Bubbles,” contains the heart of their insights. Mian and Sufi demonstrate that increasing the flow of credit is extremely counterproductive when the fundamental problem is too much debt, and excessive debt can fuel asset bubbles.

Based on our reading of these two books we would define an asset bubble as a rise in prices that is caused by excess central bank liquidity rather than economic fundamentals. As Kindleberger clearly stated, the process of excess liquidity fueling higher prices in the face of faltering fundamentals can run for a long time, a phase Kindleberger called “overtrading”. But eventually, this gives way to “discredit”, when the discerning few see the discrepancy between prices and fundamentals. Eventually, discredit yields to “revulsion”, when the crowd understands the imbalance, and markets correct.

Economists have commented on the high correlation between the S&P 500 and the Fed’s balance sheet since 2009. From 2009 to the latest available month, the monetary base (MB) surged from $1.7 trillion to $4.1 trillion. We ran the MB increase against the S&P 500 and found a very high correlation of 0.69. While correlation does not prove causality, the high correlation is certainly not inconsistent with the idea that the Fed liquidity played a major role in…
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Why Gold Is Undervalued

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Alisdair Mcleod via Peak Prosperity,

Gold has been in a bear market for three years. Technical analysts are asking themselves whether they should call an end to this slump on the basis of the "triple-bottom" recently made at $1180/oz, or if they should be wary of a coming downside break beneath that level. The purpose of this article is to look at the drivers of the gold price and explain why today's market value is badly reflective of gold's true worth.

First, I think a reminder would be timely. Those who seek to trade gold are at substantial disadvantage:

  • they line themselves up against too-big-to-fail banks which have the implicit backing of the taxpayer to bail them out of their trading positions;
  • furthermore markets have become so manipulated and dangerous that gold should be considered as insurance against systemic risk instead of a punt.

Because the majority of market investors don't fully grasp these risks, when the current global financial bubbles eventually burst, there will only be a tiny minority who end up possessing gold — by which I mean physical gold held outside the fiat money system.

Technical Analysis & Gold

Using charts has the theoretical advantage of taking the emotion out of trading. So long as there is no significant change in the purchasing power of the currency against which it is traded, prices in the past have relevance to the future, because recent price experience sets an expectation in the human mind. The chart below shows the gold price since the peak in September 2011.

The chart shows a potential triple-bottom pattern formed over fifteen months, at just over $1180/oz. We know that the three bottoms were all at quarter-ends, strongly suggestive of price manipulation to enhance bullion bank profits and their traders’ bonuses. In each case, computer-driven traders had near-record short positions evident in this second chart, of Managed Money shorts on Comex:

This confirms that $1180/oz appears to be the point of maximum bearishness, in which case our triple-bottom pattern should hold.

However, this pattern is rare and should not be the first conclusion we jump to. The definitive work on Dow Theory (Technical Analysis of Stock Trends – Edwards & Magee) describes an unconfirmed triple bottom as


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Everything You Need To Know About Blue Chip Earnings In One (Ugly) Table

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

With today’s exuberance around earnings (notably forgetting the reality of various bellwether fails), we thought it appropriate to get some context on just what the “market stalwarts’” results look like in context.

 

 

A third of the companies in the Dow have posted shrinking or flat revenue over the past 12 months, as WSJ notes,

“steady has become stagnant as companies once considered among the market’s most reliable post poor growth, quarter after woeful quarter.

Source: WSJ





AND NoW FoR A MeSSaGe FRoM YouR EBoLa CZaR…

Courtesy of ZeroHedge. View original post here.

Submitted by williambanzai7.

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Google Vs The Entire Newspaper Industry: And The Winner Is…

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

As Brookings notes, “overall the economic devastation would be difficult to exaggerate,” with regard the shift from print to online journalism – as the following chart sums up in all its devastating reality… it’s a new world.

“…putting newspapers online has not remotely restored their profitability…”

 

“Now, however, in the first years of the 21st century, accelerating technological transformation has undermined the business models that kept American news media afloat, raising the possibility that the great institutions on which we have depended for news of the world around us may not survive.”

 

Source: Brookings





A Furious Albert Edwards Lashes Out At Central Bankers: “Will These Morons Ever Learn?”

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Albert Edwards is angry, and understandably so: almost exactly two weeks after warning readers to “sell everything and run for your lives” and the market was on the verge of its first correction in years, several powerful verbal interventions by central banks from the Fed, to the BOJ to the ECB have staged yet another massive rebound which has nearly wiped out all the October losses.

Central-planning aside (and ask how much the USSR would have wished for central planning to indeed have been “aside”) we share his frustrations, almost to the point where we would reiterate word for word Edwards’ furious outburst, as follows: “Simply put, the central banks for all their huffing and puffing cannot eliminate the business cycle. And they should have realised after the 2008 Great Recession that the longer they suppress volatility, both economic and market, the greater the subsequent crash. Will these morons ever learn?

Obviously, they will never will because their very entire existence is based on the assumption that what they do can impact the business cycle when all it does is merely delay the inevitable. In this case, a recession whose arrival will be so violent, it will crush not only US stocks, but the overall economy, which has for the past 6 years existed purely on the Fed’s CTRL-P fumes. Fumes, which by the looks of things, will evaporate at just the worst possible moment: just when half of the world’s entire growth in 2015 is expected to come from the US (the other half from China).

So what is it that has peeved Edwards so much about the latest mispricing of, well, everything by the Mandarins of Marriner Eccles:

The bottom line is that there is far too much over-confidence in the US recovery. Fragile and vulnerable in itself, the US recovery now battles against the rest of the world, which like a horror movie is dragging it down into a hellish Ice Age underworld. The problem is that at, these stratospheric valuations, the market does not need to suffer an ACTUAL recession to see a crash. Like October 1987, just the fear of recession will be enough to trigger a massive market move.

Specifically, Edwards looks at implied inflation expectations –…
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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 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!

 
 

Zero Hedge

Frontrunning: October 24

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

  • Doctor with Ebola in New York hospital after return from Guinea (Reuters)
  • Ebola Puts Spotlight on Bellevue, Key NYC Trauma Center (WSJ)
  • Uber Driver Transported Ebola-Positive Doctor in New York (BBG)
  • GOP Gains in Key Senate Races as Gender Gap Narrows (...


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Phil's Favorites

The Death of the Blue Chip

The Death of the Blue Chip

Courtesy of 

My title above is only half-kidding. Because everytime Wall Street pronounces “The Death Of” anything, that’s pretty much when it starts working again. But there is an important point being made in a new article at the Wall Street Journal about the current state of some of our biggest stalwart stocks and their underlying businesses, a point I made two days ago here

Here’s the Journal:

A third of the companies in the Dow Jones Industrial Average have posted shrinking or flat revenue over the past 12 m...



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Chart School

S&P 500 Snapshot: Back in Rally Mode

Courtesy of Doug Short.

After a one-day pause, the S&P 500 returned to rally mode. The index opened at its 0.20% intraday low, vaulted upward and then drifted to its 1.81% mid-afternoon high. It closed ninety minutes later with a trimmed gain of 1.23%. The popular financial press touted strong pre-market earnings (most notably from Caterpillar and 3M) as the rally trigger and blamed the afternoon fade on renewed Ebola worries (a doctor being tested in NY).

Looking ahead ... will Amazon's post-close earnings disappointment trigger a market struggle at tomorrow's open? Stay tuned!

The yield on the 10-year Note closed at 2.29%, up 4 bps from yesterday's close. The weekly average for the 30-year fixed mortgage was announced today at 3.92%, the lowest rate since early June of last year.

Here is a 15-minute chart of the past five sessions.

...

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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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Option Review

LUV Options Active Ahead Of Earnings

There is lots of action in Southwest Airlines Co. November expiry call options today ahead of the air carrier’s third-quarter earnings report prior to the opening bell on Thursday. Among the large block trades initiated throughout the trading session, there appears to be at least one options market participant establishing a call spread in far out of the money options. It looks like the trader purchased a 4,000-lot Nov 37/39 call spread at a net premium of $0.40 apiece. The trade makes money if shares in Southwest rally 9.0% over the current price of $34.32 to exceed the effective breakeven point at $37.40, with maximum potential profits of $1.60 per contract available in the event that shares jump more than 13% to $39.00 by expiration. In September, the stock tou...



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Sabrient

Sector Detector: Sharp selloff in stocks sets up long-awaiting buying opportunity

Courtesy of Sabrient Systems and Gradient Analytics

Last week brought even more stock market weakness and volatility as the selloff became self-perpetuating, with nobody mid-day on Wednesday wanting to be the last guy left holding equities. Hedge funds and other weak holders exacerbated the situation. But the extreme volatility and panic selling finally led some bulls (along with many corporate insiders) to summon a little backbone and buy into weakness, and the market finished the week on a high note, with continued momentum likely into the first part of this week.

Despite concerns about global economic growth and a persistent lack of inflation, especially given all the global quantitative easing, fundamentals for U.S. stocks still look good, and I believe this overdue correction ultimately will shape up to be a great buying opportunity -- i.e., th...



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Digital Currencies

Goodbye War On Drugs, Hello Libertarian Utopia. Dominic Frisby's Bitcoin: The Future of Money?

Courtesy of John Rubino.

Now that bitcoin has subsided from speculative bubble to functioning currency (see the price chart below), it’s safe for non-speculators to explore the whole “cryptocurrency” thing. So…is bitcoin or one of its growing list of competitors a useful addition to the average person’s array of bank accounts and credit cards — or is it a replacement for most of those things? And how does one make this transition?

With his usual excellent timing, London-based financial writer/actor/stand-up comic Dominic Frisby has just released Bitcoin: The Future of Money? in which he explains all this in terms most readers will have no tr...



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OpTrader

Swing trading portfolio - week of October 20th, 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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Market Shadows

Falling Energy Prices: Sober Look takes a Sober Look

Falling Energy Prices: Sober Look takes a Sober Look

What do falling energy prices mean for the US consumer? Sober Look writes a brief yet thorough overview of the consequences of the correction in the price of crude oil. There are good aspects, particularly for the consumer, bad aspects, and out-right ugly possibilities. For more on this subject, read James Hamilton's How will Saudi Arabia respond to lower oil prices?  In previous eras, Saudi Arabia would tighten the supply to help increase prices, but in this "game of chicken," the rules m...



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Stock World Weekly

Stock World Weekly

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

Here's this week's Stock World Weekly. Just sign in with your PSW user name and password. (Or take a free trial.)

#457319216 / gettyimages.com

 

...

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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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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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