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Dow Is Up 110 Points, Visa Is 120 Of Them

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Broad-based strength… as Pisani might say.



Chart: Bloomberg

Stocks Decouple From Bonds, Ramp To Pre-FOMC Levels

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Now what?



as the machines lift stocks to the scene of yesterday’s crime…


As Visa lifts the Dow.

Russian Ruble Soars Over 5% On Intervention, Rate-Hike Rumors

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Having made new record lows for 7 days in a row, various technical triggers, short squeezes, and rumors of Central Bank intervention prompted the Russian Ruble to rally over 5%  – the biggest swing since 1998 as chatter of a very aggressive (greater than 50bp) rate-hike at tomorrow’s meeting.

Massive shortr squeeze


and intraday the move is immense!


Commerzbank suggests intervention:

…looks like either a substantial one-off central bank FX intervention, or indirect intervention to the local banking community, Simon Quijano-Evans, head of EM Research at Commerzbank


If RUB recovery is not due to any geopolitical progress, a strong message in defense of the RUB is needed in tmrw’s CBR meeting: Quijano-Evans


This would include a rate hike of at least 200bps, and/or one-off FX interventions, and dropping the corridor policy

UBS’ EM desk suggest 3 drivers:

a) hope of rapproachment between Ukraine and Russia


b) risk that central bank hikes rates very aggressively tomorrow


c) expectations that oil price isn’t going much lower from here; small tactical rally is possible near term

And technical drivers:

“Ruble may be poised to appreciate against the U.S. dollar in coming weeks after the slow-stochastics study, which measure the velocity of a security’s price movement, exhibits a bullish crossover near the oversold threshold,” says Bloomberg Technical Analyst Sejul Gokal. “A similar crossover in March this year, led to a 6.2% appreciation of the the Russian ruble versus the greenback, over a period of 13-weeks.”

As Goldman adds,

The sharp decline in the Ruble and US$28bn in reserve losses month-to-date are likely to be of significant concern to the CBR, given related risks to financial stability as well as to inflation expectations, and we think this is likely to cause the CBR to enact decisive changes to its FX policy.

While the recent uptick in inflation expectations increases the risk of a larger rate hike and this is now being priced by the market, we continue to expect the CBR to hike its policy rate by 50bp at its board meeting on Friday morning (October 31).

In our view, the rationale for a rate hike…
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The Wrath of Draghi: First German Bank Hits Savers with Negative Interest Rate

Courtesy of ZeroHedge. View original post here.

Submitted by testosteronepit.

Wolf Richter

Deutsche Skatbank, a division of VR-Bank Altenburger Land, which was founded in 1859, is not the biggest bank in Germany, but it’s the first bank to confirm what German savers have been dreading for a while: the wrath of Draghi.

Retail and business customers with over €500,000 on deposit as of November 1 will earn a “negative interest rate” of 0.25%. In less euphemistic terms, they have to pay 0.25% per annum to the bank for the privilege of handing the bank their hard-earned money or their business cash.

Inflation has had a similar effect in the zero-interest-rate environment that the ECB and other central banks have inflicted on savers, but this time it’s official, it’s open, it can’t be hidden. Instead of lending your moolah to the bank so that the bank can lend it out to businesses and retail customers for all sorts of economically beneficial purposes, you’re financially better off hiding it in the basement. Grudging respect is due the ECB and other central banks: through the perverse regime of ZIRP, they have succeeded in transmogrifying “cash in bank” from an income-producing asset to a costly liability.

“Punishment Interest” is what Germans lovingly call this. It’s the latest and most blatant step of the central-bank strategy to confiscate in bits and pieces and over time the wealth that prudent people and businesses have accumulated, and that should have re-entered the economy via the intermediation of the banks.

Last summer, the ECB imposed negative deposit rates on member banks. At first, it was 0.1%, which has now doubled to 0.2%. The reason? The ECB dragged out its “mandate,” which is, as it said, “to ensure” that “price stability” is “below but close to 2% inflation,” which in turn is “a necessary condition for sustainable growth in the euro area.” Whatever. There is not a scintilla of evidence that inflation is required for economic growth; however, there is plenty of evidence that economic growth can stir up inflation. The good folks at the ECB know this. It’s just the official pretext for using inflation to eat up debt – along with savers.

“There will be no direct impact on your savings,” the ECB announced five months ago. “Only banks that deposit money in certain accounts at the ECB have to pay.” But it added ominously, “Commercial…
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Why Did Q3 GDP Jump: Thank ISIS And The “War On Terror”

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

As we noted previously, the main reason why Q3 GDP surprised to the upside was thanks to yet another accounting gimmick, where it wasn’t the US consumer leading to US growth, as has historically been the case, but because the government stepped up, and boosted GDP by the most since Q2 2009.


So just which aspect of government taxpayer fund recirculation was responsible for this sudden boost in US “growth” (leaving aside the philosophical debate whether government capital allocations ever lead to grwoth)?

The answer is shown in the chart below showing the quarterly change in US National Defense spending: at by $30 billion, it was the most since 2008!

In short: thank you ISIS and renewed war on terror.

And what is more disturbing, as we noted earlier, is that the Fed had this data when it decided yesterday to end QE and to present its “surprisingly hawkish” assessment of the economy, suggesting the Fed is comfortbale with defense spending as a marginal leader of US growth (and is also not seeing any snow whatsoever this winter)

So… the “Fed war put” anyone?

Source: St. Louis Fed

Q3 GDP Rises 3.5% Despite Sharp Slowdown In Consumption, Pushed Higher By Government Spending Spree

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Moments ago, the market was expecting Q3 GDP to print at 3.0%, and was pleasantly surprised when instead it got a 3.5% print, sending all risk assets kneejerk higher. However, a quick glance into the components revealed that things were certainly not as they seemed, with Personal Consumption in Q3 actually decreasing notably from Q2′s 2.5%, to just 1.8% in Q3, below the 1.9% Expected, and accounting for 1.22% of the 3.54% Q3 GDP, the lowest Personal Consumption boost to GDP since Q2 2012 excluding the infamous Q1 winter vortex quarter.

Some of the notable moves in Q3 GDP: Inventory, which was expected to boost GDP, was in fact a detractor, leading to a -0.57% net impact on the bottom line. This, however, was more than offset by net trade, which surged from Q2′s -0.34% to 1.32% as Imports reversed for the first time since Q1 2013, meaning imports decline in Q3 suggesting a sharp slowdown in end demand in the US, which is also why inventories slid. One wonders just what all those PMI indices were looking at if domestic industries not only ground to a halt but reversed from Q2?

So what happened to boost Q2 GDP if that core driver, the US consumer was not there? Simple. Government stepped in, and stepped in hard, with its 0.83% boost to the bottom line GDP the highest since Q2 of 2009!

In other words, the Fed, which yesterday had the advance GDP print in hand, decided to end QE on hopes Government spending would continue. And since government spending in this case was mostly a function of surging National Defense spending, it appears that Janet Yellen is strongly betting on, drumroll, war.

Initial Jobless Claims Average Nears 40-Year Low

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Initial claims rose a very modest 3k this week but it does little to change the overall picture of a jobs market where there is no hiring and therefore no firing. The 4-week moving average of initial claims has only been lower than this once in 40 years. Is it any wonder the FOMC is stuck with its hawkish perspective… Continuing claims rose 33k to 2.384 million, missing expectations by the most since August – but still hovering near cycle lows.



But perhaps more stunning is that we have only been lower than this level of average claims once in the last 40 years…


Continuing Claims ticked up very modestly, missing by the most since August…


Charts: Bloomberg

Silver, Copper Slammed As Commodities Crumble Into US Open

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Catalyst, who needs catalyst…continued dollar strength post-FOMC is weighing on the whole commodity complex but copper and silver seem to suffering most…



Close up…

Western Banks Find “In China, Nothing Is What It Appears To Be”

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

When Chinese property developer Agile Property Holdings Ltd. said this month that its chairman was taken into custody by authorities, the disclosure was a shock to Western banks that lent the company money, according to China Spectator as the fog of ever-rising asset values suddenly evaporates into the reality of an opaque real estate credit market slap them in the face. The simple fact is "it is very difficult to get a handle on the financials of a Chinese company," as a local investigative consulting firm warns "in China, nothing is what it appears to be."

Foreign lenders in China have been stung by a string of suspected fraud cases and problem loans in the country as Beijing investigates company executives and seizes assets in a crackdown on corruption. Most notable recently , as China Spectator reports, was Agile Property…

Agile Property has a large debt payment due in December and has been scrambling to raise funds. It is in discussions with bankers at HSBC Holdings PLC and its unit Hang Seng Bank Ltd. , and Standard Chartered PLC for an extension of the US$475 million loan.


The company cancelled plans at the start of the month to raise 2.75 billion Hong Kong dollars (US$355 million) through a rights issue. A few days later, the company said it would try again, this time with the fundraising backed by the controlling family, meaning they would have to buy any shares not bought by investors.


When news came that the chairman was taken into custody, it was a shock to banks such as BNP Paribas , HSBC and Standard Chartered that had agreed to underwrite the original offering, and who have also lent the company money.


“It was a surprise to all the banks. We didn’t know,” said one executive at a Western bank with direct knowledge of the matter.



Half a dozen Western lenders are also locked in legal battles over exposures of around US$1 billion linked to a suspected fraud at Qingdao port.



In another widely reported case, a group of banks including Nomura International lent US$60 million to Chinese shoe company Ultrasonic AG just months before company funds went missing and its then-chief executive disappeared. That prompted the

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Don’t Show The “Deflation Isn’t Going To Happen” ECB Germany’s Declining October Prices

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Remember when this past weekend, as part of its stress test “worst case” scenario, in all its wisdom the ECB decided not to stress test a deflationary outcome in Europe’s immediate future…

Despite the market clearly screaming “deflation, deflation, deflation”…

… because as ECB governor Constancio said “the scenario of deflation is not there because indeed we don’t consider that deflation is going to happen.

Well, don’t tell the ECB, but according to just reported October regional inflation data for Germany, the country that is supposedly Europe’s growth dynamo is now in outright deflation:

  • Brandenburg CPI -0.3%, Previous 0.0%
  • Hesse CPI -0.2%, Previous 0.1%
  • Saxony CPI -0.2%, Previous 0.1%
  • Bavaria CPI -0.3%, Previous 0.1%

And lest someone think this is purely a “core” phenomenon, Spain also reported October CPI which was not the balmy 0.0% expected but a negative print as well, at -0.1%.

So, is it already time to rerun “the most successfull and thorough European stress test” yet? Judging by the clobbering Italian banks have gotten virtually every day in the past week, it is probably not a bad idea.


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!


Zero Hedge

This Is The 12-Days-Old News That Just Spiked USDJPY And Stocks

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Day after day after day this 'market' is manipulated and managed by headlines that memory-less machines read and act upon. Today - yet again - at 210am Japan time, Nikkei news decides it is time to print these headlines:


And sure enough JPY explodes instantly in an attempt to spark momentum. This is not news (it's a constant headline every day since October 18th) as Abe sacrifices his economy and his people's...

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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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Phil's Favorites

Tim Cook: "I'm Proud to be Gay"


#455064918 /

Tim Cook discusses being gay on BusinessWeek. Recent bullying statistics show that gay teens are from 2 to 3 times more likely to commit suicide than others, and almost 30% of completed suicides are related to problems dealing with sexual identity. Perhaps Tim Cook's story will help people accept their differences, whatever they are, and move on to achieve their goals. 



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Chart School

Visualizing GDP: A Look Inside the Q3 Advance Estimate

Courtesy of Doug Short.

Note from dshort: The charts in this commentary have been updated to include the Q3 2014 Advance Estimate.

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

The increase in real GDP in the third quarter primarily reflected positive contributions from personal consumption expenditures (PCE), exports, nonresidential fixed investment, federal government spending, and state and local government spending that were partly offset by a negative contribution from private inventory investment. Imports, which are a subtraction in the calculation of GDP, decreased.

Let's take a closer look at the cont...

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Insider Scoop

UPDATE: D.A. Davidson Reiterates On Rogers Corporation On Strong Q3 Upside

Courtesy of Benzinga.

Related ROG Earnings Scheduled For October 28, 2014 Earnings Scheduled For July 29, 2014

In a report published Thursday, D.A. Davidson analyst Avinash Kant reiterated a Buy rating on Rogers Corporation (NYSE: ROG), and raised the price target from $71.00 to $77.00.

In the report, D.A. Davidson noted, “ROG reported Q3:CY14 operating EPS of $1.09 on record revenues of $163.1 million (up 6% from Q2:CY14 and up 14% from Q3:CY13); well above consensus expectat... more from Insider


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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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 /



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Market Shadows

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


#452525522 /

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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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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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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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 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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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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