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Goldman, Morgan Stanley Warn European QE, While Fully Priced In, Is Neither Imminent Nor Likely

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

On balance, Morgan Stanley feels that broad-based QE, (i.e. large-scale purchases of government bonds) is further away for the ECB than the market currently believes. Presently they only assign a subjective 40% probability to such a step being taken; whereas the euro rates market is already pricing in the ECB resorting to a broad-based purchase programme with a very high probability of 80-100%. Goldman agrees warning specifically that "Sovereign QE is not imminent… and indeed may never happen." It appears no matter what, disappointment is guaranteed for the market.

 

As Morgan Stanley points out, ahead of the November ECB meeting, the newswires seem to be picking up again on the possibility of the ECB taking additional policy measures before year-end. Our interest rate strategy team believes that the bond market currently assigns a very high probability of 80-100% or higher to the ECB starting to buy government bonds. In our view, such expectations are likely to be disappointed.

QE is not a panacea: In our view, the negative long-term side-effects of QE on the financial system would undermine the ECB’s efforts to repair the bank lending channel through the AQR, the TLTROs and the two purchase programmes. Furthermore, we think QE would be inconsistent with the ECB’s recent decision to cut the deposit rate further into negative territory.

In our view, the ECB would face some serious political and legal risks if were to move into the sovereign space. Given the explicit ban on monetisation of government debt in the EU Treaty, it might be easier for the ECB to buy private sector debt instead of public sector debt – especially with the German Constitutional Court already taking a critical view on the compatibility of OMT with the German Constitution as well as the EU Treaty. This legal dispute also would put the Bundesbank in a very difficult position should the Governing Council decide – contrary to our expectation – to push ahead with government bond purchases.

For QE not just to foster ‘Japanification’, the ECB would need to make sure that governments press on with structural and, if possible also, institutional reforms. One way to keep the pressures on governments would be to link the parameters of the purchases, notably the countries whose bonds are bought, to fulfilling the requirements of the…
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Careful What You Wish For: Plunging Yen Leads To 140% Surge In Bankruptcies

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Due to the depreciation of the JPY, leading to soaring raw material costs (crushing SME profitability), TSR reports that Japanese bankruptcies year-to-date in 2014 are up a stunning 140% having unerringly surged since Abenomics was unleashed. Despite constant reassurance and propaganda from various political leaders each and every night that Japan is on the right track… it simply is not and if there is a better indicator of the death spiral Abe has unleashed than surging bankruptcies, we are unaware of one.

 

Bankruptcies are soaring since Abenomics began…

 

As TSR additionally notes,

By industry, 81 of the transportation industry such as automobile cargo transportation industry (composition ratio 37.9%) is at most, fuel prices remain high is affected. Next, review the manufacturing industry 44 (20.6%), Wholesale 41 (19.2%), service industries other 19 cases (8.9%), and has spread retailing 11 (up 5.1%) in a wide range of industries.

 

Depreciation of the yen impact leads to soaring raw materials, profit deterioration deplete the strength of small and medium-sized enterprises. In addition to the deterioration in earnings, depending on trends of the future of the exchange rate, are also concerned about such further sales slump due to price competition.

But as Bloomberg reports,

“We’ve seen that the threat of an exchange rate weaker than 110 yen per dollar made a lot of people uneasy, so if the yen were to strengthen to 105 per dollar, I doubt we’d hear any complaints.”

 

A survey released last month by the Osaka Chamber of Commerce and Industry showed the majority of respondents viewed an exchange rate of 95-105 yen per dollar to be ideal. Japan Chamber of Commerce and Industry Chairman Akio Mimura said this month a “pleasing” level for the yen would be 100 per dollar, Kyodo reported.

 

An increasingly weaker yen won’t necessarily benefit Japan’s large exporters. Nintendo Co. booked a 15.5 billion-yen ($142 million) gain in the fiscal first half from the lower currency.

 

The median forecast among analysts surveyed by Bloomberg News is for the currency to weaken to 114 per dollar by the end of 2015 as U.S. and Japanese monetary policies diverge. It hasn’t been that weak since 2007.

Even…
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The Dollar Decline Continues: China Starts Direct Convertibility With Asia’s #1 Financial Hub

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Simon Black via Sovereign Man blog,

Earlier this week some of the biggest financial news of the year made huge waves all over Asia.

Yet in the Western press, this hugely important information has barely even been mentioned.

Singapore dollar news The dollar decline continues: China begins direct convertibility to Asias #1 financial center

While this is ignored in the US so far, it’s front page news in Asia

So what’s the news?

The Chinese government announced that the renminbi will become directly convertible with the Singapore dollar… effective immediately.

Singapore-Development-Growth

It’s clear this deal has been in the works for a while, and it’s another major step towards the continued internationalization of the renminbi and unseating of the dollar as the world’s dominant reserve currency.

For decades the renminbi has been a tightly controlled currency. It’s only been in the last few years that the Chinese government started loosening those controls, primarily in response to the obvious need for a dollar competitor.

The entire world is screaming for an alternative to the dollar and the US government.

Since the end of World War II, the US has been in the driver seat. The Fed essentially sets global monetary policy. Foreign banks are forced to rely on the US banking system. Nearly every nation on earth must hold US dollars and buy US government debt just to be able to trade with one another.

These were sacred privileges entrusted to the US government. And they have been abused time and time again.

The US government spies on its allies. It uses its banking system as a weapon to threaten foreign companies. It fines foreign banks billions of dollars for doing business with countries it doesn’t like.

 

They discredit themselves by continuing to indebt future generations and failing to make tough fiscal decisions.

 

And the Fed has printed so much money that major foreign institutions are left with no choice but to seek an alternative. Enough is enough.

China is taking the lead in providing the world with another option. And they’re not exactly doing this under cover of darkness. These moves have been widely telegraphed, at least to anyone paying attention.

For the last few years the Chinese government has entered into new ‘swap agreements’ at blazing speed, allowing other nations’ central banks
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Disillusioned Millennials Dump Democrats, Blame Obama

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

In a sad reflection of the hope-and-change expectations, a new national poll shows likely voters in the so-called millennial generation prefer a Republican-led Congress after next week’s elections, and young Hispanics are turning sharply against President Obama. As National Journal reports, the poll of 18-to-29-year-olds by Harvard’s Institute of Politics (IOP) shows that young Americans are leaving the new Democratic coalition that twice elected Obama as the president’s approval rating among Millennial tumbles from 47% in April to just 43% now (and nearly 60% of young Americans disapprove of Obamacare). However, the news is not all good as the future of the American electorate, generally hold Republicans in the lowest regard.

 

As The National Journal reports,

A new national poll of 18-to-29-year-olds by Harvard’s Institute of Politics shows that young Americans are leaving the new Democratic coalition that twice elected Obama. The news is little better for the GOP: These voters, who more than any other voting bloc represent the future of the American electorate, generally hold Republicans in the lowest regard.

 

The long-view IOP findings suggest that neither party is poised to win the largest generation in U.S. history – a pragmatic, demanding, relatively nonideological electorate raised in an age of terrorism, war, and government dysfunction.

 

“Millennials could be a critical swing vote,” said IOP Director Maggie Williams, projecting the latest results on future elections. “Candidates for office: Ignore millennial voters are your peril.” Williams is a Democrat and a former adviser to Hillary Clinton.

 

In the short term, the news is worse for Democrats than Republicans.

  • Millennials who told the IOP they will “definitely be voting” Tuesday favored Republicans over Democrats, 51 percent to 47 percent. That is a reversal of September 2010 results, when the IOP found Democrats favored over Republicans among young likely voters, 55 percent to 43 percent.
  • Obama’s job-approval rating among millennials decreased from 47 percent in April to 43 percent, his second-lowest rating in the IOP surveys. Among young Americans most likely to vote, his job-approval rating is just 42 percent.
  • Obama’s job approval is below 40 percent on several issues, including the economy, health care, the federal budget deficit, and foreign policy. Nearly six of 10 young Americans disapprove of Obamacare.
  • Among the


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Putin To Western Elites: Play-Time Is Over

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Via Club Orlov blog,

Most people in the English-speaking parts of the world missed Putin's speech at the Valdai conference in Sochi a few days ago, and, chances are, those of you who have heard of the speech didn't get a chance to read it, and missed its importance. Western media did their best to ignore it or to twist its meaning. Regardless of what you think or don't think of Putin (like the sun and the moon, he does not exist for you to cultivate an opinion) this is probably the most important political speech since Churchill's “Iron Curtain” speech of March 5, 1946.

In this speech, Putin abruptly changed the rules of the game. Previously, the game of international politics was played as follows: politicians made public pronouncements, for the sake of maintaining a pleasant fiction of national sovereignty, but they were strictly for show and had nothing to do with the substance of international politics; in the meantime, they engaged in secret back-room negotiations, in which the actual deals were hammered out. Previously, Putin tried to play this game, expecting only that Russia be treated as an equal. But these hopes have been dashed, and at this conference he declared the game to be over, explicitly violating Western taboo by speaking directly to the people over the heads of elite clans and political leaders.

The Russian blogger chipstone summarized the most salient points from Putin speech as follows:

1. Russia will no longer play games and engage in back-room negotiations over trifles. But Russia is prepared for serious conversations and agreements, if these are conducive to collective security, are based on fairness and take into account the interests of each side.

 

2. All systems of global collective security now lie in ruins. There are no longer any international security guarantees at all. And the entity that destroyed them has a name: The United States of America.

 

3. The builders of the New World Order have failed, having built a sand castle. Whether or not a new world order of any sort is to be built is not just Russia's decision, but it is a decision that will not be made without Russia.

 

4. Russia favors a conservative approach to introducing innovations into


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All Of These Items Point To a Collapse in the Markets

Courtesy of ZeroHedge. View original post here.

Submitted by Phoenix Capital Research.

The primary drivers of asset prices are the economy and corporate earnings.

 

Unfortunately, both are indicating future weakness.

 

If you want a somewhat accurate measure of GDP growth, you need to ignore the headline GDP numbers an look at nominal GDP.

 

The reason for this is that all “adjusted” GDP data involves a “deflator” metric that is meant to adjust for inflation. The Feds often use an inflation adjustment that is even lower than their official Consumer Price Index metric (which is already massaged to downplay inflation) in order to make GDP growth look greater.

 

Consider this simple example. Let’s say that the US GDP grew by 10% last year. Now let’s say that inflation also grew by 10%. In this scenario, real inflation adjusted GDP growth was ZERO. However, announcing ZERO GDP growth is a major problem politically. So what do the Feds do? They claim that inflation was just 8%, and BOOM you’ve got 2% GDP growth announced for a year in which real GDP growth was actually zero.

 

By using nominal GDP measures, you remove the Feds’ phony deflator metric. With that in mind, consider the year over year change in nominal GDP that has occurred.

 

 

As you can see, we’ve broken below four, the reading that has been triggered at every recession in the last 30 years. So the economy is likely at or already in a recession.

 

The above chart shows that the US is on the brink of a recession. With that in mind, consider that corporate profits are at all time highs.

 

Not only that, but corporate profits, as a percentage of GDP are at all-time highs. Never before in history have corporations made so much money relative to the US economy. This trend is not likely to continue.

 

 

So, we have a weak economy, record profits (mostly from cutting payroll by firing people) and record profits as a percentage of GDP. The simplest interpretation of this is that there will be a reversion to the mean at some point.

 

What will the mean be?

 

In terms of valuing stocks as a whole, based simply on CAPE (cyclical adjusted price to earnings) the market is significantly overvalued with a reading of nearly…
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Goldman Warns Midterm Elections Raise Risk Around Fiscal Deadlines

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

The US midterm elections taking place on November 4 may very well lead to a shift in Senate control to Republicans from Democrats, according to Goldman Sachs. They argue that a Republican-controlled Congress could renew legislative activity – at least on small issues – but also increase (unwanted) uncertainty on some larger ones creating risk around fiscal deadlines.

 

 

Goldman notes,

The US midterm elections taking place on November 4 may very well lead to a shift in Senate control to Republicans from Democrats. We ask four experts, one question each about the largest potential impacts of the election and of the possible Senate turnover in particular. They argue that a Republican-controlled Congress could renew legislative activity – at least on small issues – but also increase (unwanted) uncertainty on some larger ones. And they conclude that a shift to a Republican-controlled Senate would – intuitively – affect the healthcare sector, but – not-so-intuitively – may not directly impact defense. But with Democrats well positioned for material gains in 2016, Larry Sabato, a political expert at the University of Virginia, cautions that Republicans would need to use any newfound power wisely.

 

Q. Would a Republican takeover of the Senate in 2014 benefit Republicans in 2016?

A. Larry Sabato, Professor and Director of the Center for Politics, University of Virginia: Two years is four eternities in politics. After the GOP sweep in 2010, the Republican mantra was, “Even my dog could beat President Obama in 2012.” For every action, there can be an equal or opposite reaction in politics as well as physics. The same thing could happen this time if the Republicans do not use their newfound total control of Congress (assuming that happens) judiciously and strategically.

Q. What are the biggest potential policy implications of a possible Republican takeover of the Senate?

A. Alec Phillips: A Republican Senate majority would likely lead to an incremental uptick in legislative activity – potentially even on a couple of big issues, including tax reform – and increased risk around fiscal deadlines.

On some smaller issues, congressional Republicans would be more likely to advance legislation to the President that congressional Democrats have previously managed to hold back. This might include “fast track” authority to negotiate trade agreements,


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Hillary Clinton: “Businesses Don’t Create Jobs” – Why She’s Never Been More Wrong

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Via Future Money Trends,

Narcissism in politics is nothing new, but it is absolutely disgusting and scary that this person is a hero in the minds of millions of Americans.

“Businesses don’t create jobs,” according to Hillary Clinton. Apparently she missed the entire 1990s when private businesses created over 20 million jobs during her husband’s two terms in office.

In her mind, she clearly credits herself, her husband and the government for those years, when in reality, they walked into the greatest communications revolution since the telephone. And even then, they couldn’t balance the federal budget as tax dollars flooded in from all the new jobs that businesses were creating.

I know that the media claims President Clinton balanced the budget, but the truth is it never happened. The Boskin Commission changed the inflation calculation for the BLS, ripping off our senior citizens and turning their annual cost of living increase into an annual cost of survival rate. The Clinton Administration also made budget projections using short-term interest rates instead of long-term.

Hillary’s wrong on the idea that government creates jobs – the government destroys jobs.

1. Government Borrowing

All government borrowing hurts the real economy. Like a drug, it can have some short-term effects that are perceived as positive, but in the long run, this misallocation of capital hurts our chances of having a sustainable economy based on real supply and demand.

Every dollar loaned to the government is not invested in business, not loaned to the private industry, and is taken out of the economy and redirected by a central planner.

2. Taxes

The government raises its capital by putting a gun to its citizens’ heads; pay taxes or go to jail. This means taking money from our wallets, meaning we buy less, reducing the capital citizens have to spend, invest and save.

3. Central Banks Print

This is inflationary. In a real economy, prices go down; however, since the politicians use inflation as a stealth tax, our central planners are hell-bent on pushing the inflation rate up. Inflation is how the government is able to raise your taxes without getting any real backlash from voters. If prices go up and the tax rate stays the same, the government is making more money.

This hurts the everyday Americans; especially those on fixed income,…
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Thank You US Taxpayers: Russia-Ukraine Agree Terms On Gas-Supply Through March

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Good news for the cold-showering, snow-covered Ukrainians… Russia has reached an interim agreement to supply natural gas to Ukraine through March according to Bloomberg. Of course, this will be paid for by more IMF loans (thank you US Taxpayer), pushing Ukraine further into debt and more dependent upon the West.

  • *RUSSIA CONFIRMS GAS SUPPLY RESUMPTION TERMS AGREED WITH UKRAINE
  • *GAZPROM, NAFTOGAZ CEOS SIGN AMENDMENT TO CONTRACT
  • *RUSSIA, UKRAINE, EU AGREEMENT TO COVER DELIVERY THROUGH MARCH

Terms…

  • *OETTINGER: RUSSIA TO CHARGE UKRAINE $385/KCM THROUGH MARCH
  • *UKRAINE READY TO IMMEDIATELY PAY $1.45B OF GAS DEBT: OETTINGER
  • *NAFTOGAZ TO PAY $1.6B AS 2ND GAS DEBT INSTALLMENT BY YEAR-END

Paid for by US taxpayers…

  • *UKRAINE TO USE EU, IMF AID TO PAY FOR RUSSIAN GAS: OETTINGER

As Bloomberg reports,

Ukraine and Russia reached an interim natural-gas supply deal in talks brokered by the European Union to secure flows before the heating season, a Russian Energy Ministry spokeswoman said.

 

The accord agreed by Russian Energy Minister Alexander Novak, his Ukrainian counterpart, Yuri Prodan, and EU Energy Commissioner Guenther Oettinger will enable resumption of deliveries of gas from Russia to Ukraine after they were halted in June in a pricing and debt conflict.

 

Russian Energy Ministry spokeswoman Olga Golant, speaking by phone, confirmed the agreement.

 

The 28-nation EU was seeking to avoid a repeat of 2006 and 2009, when disputes between the former Soviet republics over gas debts and prices led to fuel transit disruptions and shortages across Europe amid freezing temperatures.

AP reports,

Moscow and Kiev have clinched a deal that will guarantee that Russian gas exports flows into Ukraine throughout the winter despite their intense rivalry over the fighting in eastern Ukraine.

In Thursday’s signing ceremony following protracted negotiations, the two sides promised to get the gas flowing into Ukraine again after a long and bitter dispute over payments.

EU Commission President Jose Manuel Barroso announced the “very important agreement” between the two sides.

Talks to guarantee that Russian gas imports flow into Ukraine throughout the winter appeared to be at an impasse Thursday because of doubts over payments from Kiev.

A European Union official says the negotiations, which were supposed to produce an agreement Wednesday, broke up inconclusively early…
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Jim Grant On Complexity: The Hidden Cost Of Central Bank Actions

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Authored by Jim Grant of Grant’s Interest Rate Observer,

Central banks are printing rules almost as fast as they’re printing money. The consequences of these fast-multiplying directives — complicated, long-winded, and sometimes self-contradictory — is one topic at hand. Manipulated interest rates is a second. Distortion and mispricing of stocks, bonds, and currencies is a third. Skipping to the conclusion of this essay, Grant’s is worried.

“One would not think at first sight that government had much to do with the trade of banking,” Walter Bagehot, the famed Victorian writer on finance, mused a century and a half ago. As time rolls on and regulation gives way to regimentation, the question presents itself: Do bankers have much to do with the trade of banking anymore?

One sees a certain measure of justice in the humbling of the regulated financial titans who put themselves in this position of vulnerability; many of them were going broke. Then, again, there’s irony in the regulatees ceding power to the regulators. The latter seemed to know even less about the corrupted structure of money and credit than the former.

The US Fed keeps talking about raising interest rates, and maybe the time has come, or will come in this lifetime, for the Federal Open Market Committee (FOMC) to act. Even the talk, though, places the Fed many cyclical furlongs ahead of its foreign counterparts. The central banks of Japan and Europe haven’t begun to acknowledge the eventual need for tighter money. Besides quantitative easing (QE) of one kind or another, Haruhiko Kuroda and Mario Draghi are dropping broad hints about the desirability of cheapening their respective currencies. Concerning the Swissie, the Swiss National Bank is reiterating its determination to print them up by the boxcar-full to protect the domestic Swiss economy against an export-thwarting Swiss/euro exchange rate.

What the mandarins share — ours and theirs — is faith in radical nostrums. Few would have contemplated these measures, let alone espoused them, much less implemented them, before 2008. The conventional monetary belief system changed in the blink of an eye. In 2002, in a speech in Washington, DC, then Fed Governor Ben S. Bernanke invoked Milton Friedman’s idea for emergency monetary stimulus. When banks are impaired and the price level sags, the stewards of a fiat currency could hire pilots and…
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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

Goldman, Morgan Stanley Warn European QE, While Fully Priced In, Is Neither Imminent Nor Likely

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

On balance, Morgan Stanley feels that broad-based QE, (i.e. large-scale purchases of government bonds) is further away for the ECB than the market currently believes. Presently they only assign a subjective 40% probability to such a step being taken; whereas the euro rates market is already pricing in the ECB resorting to a broad-based purchase programme with a very high probability of 80-100%. Goldman agrees warning specifically that "Sovereign QE is not imminent... and indeed may never happen." It appears no matter what, disappointment is guaranteed for the market.

 

As Morgan Stanley ...



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Chart School

Moving Averages: Month-End Preview

Courtesy of Doug Short.

Here is a preview of the monthly moving averages I track after the close of the last business day of the month. All three S&P 500 strategies are now signaling "invested" -- unchanged from last month. Two of the five of the Ivy Portfolio ETFs, the PowerShares DB Commodity Index Tracking (DBC and the Vanguard FTSE All-World ex-US ETF (VEU), are signal cash "cash" -- also unchanged from last month.

If a position is less than 2% from a signal, it is highlighted in yellow.


Note: My inclusion of the S&P 500 index updates is intended to illustrate a popular moving moving-average timing strategy. The index signals also give a general sense of how US equities are behaving. Howe...



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Phil's Favorites

Why Mitochondria Matter

Patrick starts by reviewing what a "broken record" is. (Sadly, I know and you probably do too.) He notes that biotechnology has undergone more enormous changes than the music delivery industry, and that most people do not have a proper appreciation of how big this "biotech transformation" is. Then, he reviews what mitochondria are, how they work and why they are so important to us.

Within all the cells of our bodies, microchondria produce energy - the energy supply needed to run the cells' activities. Without the ability to take nutrients and convert them to energy, via these little cellular machines, we are dead. And that, in brief, is why mitochondria are important. 

Illustration of a Mitochondrion by Kelvinsong, modified by ...



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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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Insider Scoop

Jennings Capital Downgrades Ballard Power Systems

Courtesy of Benzinga.

Related BLDP Lake View: Ballard Power Systems 'Making Progress' Morning Market Movers

Jennings Capital downgraded Ballard Power Systems Inc. (NASDAQ: BLDP) in a report issued Thursday from Buy to Hold and lowered its price target from $5 to $3.

Analyst Dev Bhangui noted that the company "reported Q3/14 results that were below our and consensus estimates. EPS were ($0.02) versus JCI and consensus of ($0.01). Revenue and gross margin m...



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Sabrient

Sector Detector: Bullish conviction returns, but market likely to consolidate its V-bottom

Courtesy of Sabrient Systems and Gradient Analytics

Bulls showed renewed backbone last week and drew a line in the sand for the bears, buying with gusto into weakness as I suggested they would. After all, this was the buying opportunity they had been waiting for. As if on cue, the start of the World Series launched the rapid market reversal and recovery. However, there is little chance that the rally will go straight up. Volatility is back, and I would look for prices to consolidate at this level before making an attempt to go higher. I still question whether the S&P 500 will ultimately achieve a new high before year end.

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 o...



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OpTrader

Swing trading portfolio - week of October 27th, 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, comments are found below each post.

Here's the latest Stock World Weekly. Enjoy!

(As usual, use your PSW user name and password to sign in. You may also take a free trial.) 

 

#455292918 / gettyimages.com

 

...

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Market Shadows

Bill Ackman's Big Pharma Trade Is Making Wall Street A Super Awkward Place

 

#452525522 / gettyimages.com

Intro by Ilene

If you're following Valeant's proposed takeover (or merger) of Allergan and the lawsuit by Allergan against Valeant and notorious hedge fund manager William Ackman, for insider trading this is a must-read article. 

Linette Lopez describes the roles played by key Wall Street hedge fund owners--Jim Chanos, John Paulson, and Mason Morfit, a major shareholder in Valeant. Linette goes through the con...



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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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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?

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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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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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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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