Author Archive for Zero Hedge

Dollar Doldrums To Continue As “Fantasy World Of Rate Normalization” Unwinds

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Despite today’s jump in the USD index, the sharp dollar selloff trend remains even as U.S. rates have climbed and the commodity rally pauses. It’s logical to query if there is an end in sight for the rout. The short answer, according to Bloomberg’s Mark Cudmore, is no. The dollar may be due a bounce, but that would likely mark a consolidation phase rather than a trend reversal.

Today was the Bloomberg Dollar Index’s best day since Nov 2015…

The Bloomberg Dollar Index is down about 8% since the end of January and trading at its lowest level in a year. Those looking for support from a pickup in Treasury yields would do well to bear in mind that the correlation recently switched to negative. These days, a rise in Treasury yields is more likely to be accompanied by a weaker dollar.

It is also worth remembering that 10-year yields are 75 basis points lower than two years ago while the dollar is nearly 15% stronger. The currency was pricing in what now looks like a fantasy world of the U.S. entering a proper rate-hiking cycle in isolation. That needs to be unwound…

The theory of the U.S. decoupling from the global economy was painfully debunked in 2008 on the way down; it has now been debunked in potential recovery as well.

The greenback has fallen after the start of the last three U.S. hiking cycles partly for that reason. Basically, if the U.S. is raising interest rates it generally means the global economy is in an OK place. In such a situation, investors tend to re-leverage and sell the dollar.

The dollar collapse is starting to look stretched short-term and a technical bounce lasting a few weeks could occur, for example from risk-aversion and a flow into Treasuries, but that isn’t a recipe for long-term strength.

‘Kill! Kill! Kill! – How China Recruits For Its Massively Underpaid Army

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

China’s military is out with a new recruiting video, although it isn’t what some may envision. The People’s Liberation Army (incidentally the world’s largest military force, with a strength of approximately 2,285,000 personnel, or 0.18% of China’s population) released an online recruiting video, which however was anything but your average, army stock filler with a beating bass line or a cherubic choir in the background: it was just the testament to demonstrate China’s militant yet “cultured uniqueness” as it sets off to dominates the world. In other words: a “culturally unique” rap video.

Here is Quartz‘ translation of the clip, which begins with an narrator voiceover of a soldier getting dressed.

There is always a mission on your mind.

There is always an enemy in your view

There is always responsibility on your shoulders

There is always passion in your heart

War could erupt any time

Are you ready?

The morbid chorus opens with a reference to what else: getting shot. It is a rap video after all.

Even if a bullet passes through my chest
My mission remains carved in my heart
Brothers, let’s follow this path
[Roar! Roar! Roar! Roar!]
Roar with animal spirit
Look to the bravest general of them all
Walk from here toward the site of combat

Even if a bullet passes through my chest
My mission remains carved in my heart
From the center to the borders
Let’s go to war, let’s fight to win
When we follow the commands of the party
The country honors our guardianship
The rising head of a loyal patriot
If I don’t bear the burden, who else will?

And then a gentle invocation to take out China’s enemies ruthlessly, mercilessly and with the following refrain: “Kill! Kill! Kill!”

To be sure, this is not China’s first attempt a “motivational rapping.” Last December, China’s CCTV released an animated rap clip describing the virtues of president Xi Jinping’s anti-corruption campaign. Then, a few weeks ago, China’s public security ministry released more videos warning citizens about the dangers of spies—in this case US superheroes.

A PLA spokesman said that the video marks an attempt to attract younger recruits, and also dismiss any notions that the army doesn’t stack up against other countries in technological prowess. The PLA…
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Trump Crushes Cruz With Critical Win In Indiana Primary; Sanders Takes Lead Over Hillary

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Live stream from the Donald Trump victory press conference:

Update 2: In a stunning development, Bernie Sanders has taken the lead over Hillary Clinton, as Hillary’s original lead of some 4% has evaporated, and with 33% of votes counted, Bernie Sanders now leads 51.6% to 48.4%.

* * *

Moments ago, Trump was declared the winner of the Indiana Primary; Hillary’s lead over Sanders is about 3% and declining, which is why the networks refuse to call her victory yet.

#Breaking: CNN projects Donald Trump will win the Indiana Republican primary

— CNN Politics (@CNNPolitics) May 3, 2016

With the polls in eastern Indiana closed (the last polls in the western part of the state are open until 7pm Eastern), the first results come in, and in early counting of the available votes, Trump has a daunting 53% lead over Cruz’s 33% and Kasich at 11%, while Hillary leads Bernie Sanders 58% to 43%.

If Trump’s 50%+ lead remains largely unchallenged, it is difficult to see how the New York real estate billionaire will fail to accumulate the required threshold of votes before the Republican convention in July.


* * *

From earlier, here are the 5 things to watch in the Indiana Primary:

Do Cruz’s gambles work?

Cruz has already been mathematically eliminated from winning the nomination on the first ballot at July’s Republican National Convention in Cleveland. But he has been feverishly campaigning across Indiana and trying to shake up the race.

Last week, the Texas senator’s campaign announced he had forged an alliance with third-place contender John Kasich in the hope that the Ohio governor’s supporters would vote for Cruz in Indiana and keep Trump from winning as many delegates.

But the pact quickly unraveled as the candidates sent mixed messages. Kasich canceled events in the state but insisted he wouldn’t tell supporters to vote for his opponent; Cruz denied he’s working with Kasich at all.

A few days later, Cruz named Carly Fiorina as his vice presidential pick if he’s the nominee. The rare gamble of naming a running mate at this stage hasn’t happened since 1976. At an Indianapolis rally, Fiorina sought to convince voters that Trump

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“I Don’t Know How To Explain It” – Confused Clinton Can’t Explain Own Comments To Coal-Miner

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

When politicians say things, many people just ignore them and move on. However, as Hillary Clinton recently found out, words do have meaning, and some people don’t take kindly to loose rhetoric when it comes to how they provide for their families.

On the campaign trail, Hillary Clinton said with a smile “We’re going to put a lot of coal miners, and coal companies out of business.

Bo Copely, a 39 year old father who recently lost his job, reminded Hillary as he fought back tears that not everyone lives in a world that’s rainbows and skittles. Sometimes people actually have to work for a living, and when politicians say and do things to generate a good laugh from their well-off inner circle, it can directly impact many hard working people.

“When you make comments like ‘we’re going to put a lot of coal miners out of jobs’ these are the kind of people that you’re affecting, this is my family. I just want to know how you can say you’re going to put a lot of coal miners out of jobs, and then come in here and tell us how you’re going to be our friend.

Hillary’s response:

“I don’t know how to explain it”, and then blamed him for somehow taking her exact words out of context.

Here is Hillary trying to pretend she didn’t say what she said

We can’t say we’re surprised by any of this, as just like the financial elites that run everything, political elites also have realities that are significantly disconnected from everyone else.

h/t @theblaze

Did The Bank Of Japan Just Step In To Sell Yen?

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Just another central bank intervention in what is now a daily occurrence?

Standard 75 pip vertical ramp after NY hours…and before Japan opens:


Notably heavy volume in futures:

Stop run? One wonders what the half life of this move will be?

A Currency War That Europe And Japan Can’t Afford To Lose

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by John Rubino via,

The dollar is tanking lately – apart from today’s biggest jump in 2 months. From a high of around 100 in December, the dollar index — which measures USD against a basket of foreign currencies — is down about 8%, and the decline is steepening. In counterintuitive currency war terms, that means the US is winning the latest battle.

Dollar index May 16

After three years of the dollar being pretty much the only strong currency in the world, US corporate profits are falling (because it’s hard to sell things abroad when you price them in an expensive currency) and growth is slowing (because an economy can’t expand if corporate profits are falling). Presumably the plunging dollar will offer some relief on those fronts.

But our relief comes at a high, potentially-catastrophic price for Japan and Europe, because a weak dollar by definition means a strong euro and yen. And those economies are totally unprepared for their exports becoming pricier and therefore harder to move. Here’s what the yen and euro are doing while the dollar is falling:

Yen May 16

Euro May 16

Japan’s 2016 GDP growth forecast is an anemic 1.2%. The eurozone’s inflation rate is -0.2%. French unemployment is above 10%. The list goes on, but the scariest stats come from Italy where some major banks are trading at less than half of book value, implying that huge loan losses are expected.

This is clearly not the time to tighten monetary policy by raising the value of one’s currency. But that’s exactly what Japan and Europe are doing. And the sense of panic is building:

Italy, Japan urge G7 to spend for growth

(Straights Times) – Italy and Japan want the upcoming summit of Group of Seven (G7) leaders to send a “strong signal” of support for using flexible budget policies to stimulate a slowing global economy, the leaders of the two countries said on Monday (May 2).

At the start of a European tour focused on preparations for the summit, Japanese Prime Minister Shinzo Abe said he and his Italian counterpart Matteo Renzi shared a view that an acceleration of structural reforms in leading economies had to be accompanied by greater flexibility on budgetary policies.

“We agreed the G7 should send a strong signal in this sense,” Mr Abe said

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Why Is Tesla Short Interest Near All Time High: Each Car Is “Valued” At $620,000, And More

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

There is one group of investors who will be closely watching Tesla’s results due out tomorrow: the shorts. The reason is that with the stock trading near record highs following a dramatic rebound from the February lows when it plunged to $150, only to rebound back to $250, short sellers have stubbornly refused to step away, and as the chart below shows, short interest remains just shy of record high.

As Reuters notes Tesla’s nosebleed valuation of 125x forward earnings, has kept it a shorters’ favorite. In fact, the company is among the world’s 10 most-shorted companies by market value, even after the torrid 85% rally earlier this year scalded some of those short sellers. In the past month, short bets against Tesla have fallen modestly, but are still above $6 billion, according to financial analytics firm S3 Partners.

“This is not just day traders coming in and out of the market. This is fundamental guys who have put it in their portfolio and are saying, ‘We don’t believe this valuation is correct,’” said Ihor Dusaniwsky, S3′s head of research.

That may be the case, but Tesla had roughly the same number of shorts when the stock price was below $50: anyone who has kept their short position since then has been crushed.

Vilas Capital Management Chief Executive John Thompson, one of those short sellers, cited by Reuters said he believes investors underestimate the hurdles Tesla faces trying to rapidly increase production, including the cost to build future high-end robotic assembly lines.

“They’re going to have to spend an enormous amount of money on capital expenditures to achieve their long-term goals and they don’t have the money because they don’t have the earnings,” Thompson said. “So they’re going to have to sell stock to finance it.”

So what is the fundamental case math: with a market capitalization of $31 billion, Tesla is valued at about $620,000 for every car it delivered last year, and about $63,000 for every car it hopes to produce in four years, in 2020. By comparison, General Motors, with its 5x PE and $48 billion market value is equivalent to about $4,800 for every vehicle it sold last year: a 130x growth premium.

Some more math: if Tesla shares were to grow…
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Mike Bloomberg Booed After Lashing Out At College “Safe Spaces”

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Michael Bloomberg gave a not so popular commencement address at the University of Michigan over the weekend. The former champion of banning large sugary drinks was surprisingly critical of college “safe spaces”, the new trend that’s sweeping the nation.

When the topic of critical lessons learned throughout college came up, the former mayor didn’t hold back on his feelings about the subject. As he spoke, he was originally met with a mixed reaction from the students, with some clapping and some booing.

“The most important knowledge that you will leave here today with, like the importance of team work, has nothing to do with your major. It is about how to study, how to cooperate, how to listen carefully, how to think critically, and how to resolve conflicts through reason. In other words, it is working with others. Those are the most important skills in the working world, and it’s why colleges have always exposed students to challenging and uncomfortable ideas. The fact that some university boards and administrations now bow to pressure groups, and shield students from these ideas through safe spaces, code words, and trigger warnings, is in my view a terrible mistake.

He didn’t let up there, and as he went on the crowd grew seemingly more irritated with the lecture and the booing took over.

“The whole purpose of college is to learn how to deal with difficult situations, not to run away from them. A micro aggression is exactly that, micro. But in a macro sense, one of the most dangerous places on a college campus is the so-called safe space because it creates a false impression that we can isolate ourselves from those who hold different views. We can’t, and we shouldn’t try. Not in politics, or in the workplace.”

In the new era of super political correctness, we’re actually quite surprised that Mr. Bloomberg was critical of safe spaces and their usage, and it wouldn’t hurt to have a bit more truthiness from those within the political arena.

Perhaps, Mr. Bloomberg will allow people to make their own decisions about the food they eat and liquids they drink as he exposes the harsh realities of the real world to the must-be-cared-for Millenials

The Only Safe Space Is Your Home

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WTI Crude Jumps Above $44 After Smaller Than Expected Cushing Build

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Notable weakness in oil prices amid growth/demand concerns today, following Genscape’s (+821k) Cushing’s big build report yesterday, and expectations for continued builds in overall crude and Cushing levels set up trades ahead of API’s report with oil below $44 heading in. An overall crude inventory rise of 1.3mm barrels (almost double the 750k expectation) was not enough to trump a smaller than expected Cushing build of just 382k barrels (1.3m exp) which seemed to please the machines which ripped WTI back above $44 instantly.

As Bloomberg reports, Crude inventories +1.3m, gasoline -1.2m, distillates -2.6m, according to person familiar and reports on Twitter. Cushing crude inventories +382k


  • Crude +1.265m (+750k exp)
  • Cushing +382k (+1.3m exp.. Genscape +821k)
  • Gasoline -1.17m
  • Distillates -2.6m

Cushing’s lower than expected build is the biggest driver for now…

And the reaction in crude, after jumping higher after the NYMEX Close…

“The price of crude got ahead of itself,” Michael Corcelli, chief investment officer of hedge fund Alexander Alternative Capital in Miami, says. “The supply issue is definitely there. That’s not something that is going to change. Now people are starting to get worried about demand.”

Charts: Bloomberg

ECB Blames You For Negative Interest Rates

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Simon Black via,

Just after sunrise on April 19, 1775, a large contingent of British military troops arrived to the town of Lexington, Massachusetts.

They were under orders to search for and confiscate all weapons and munitions from the colonials– something the British army had done countless times before.

In many ways it was a routine operation. And yet, that morning, roughly 80 local militiamen stood blocking their path.

Paul Revere had ridden through Lexington only hours before to warn residents of the approaching threat.

There was a lot of yelling and tension between the two sides, and amid all the confusion, someone fired his musket. Then another. Then another.

(Historians are still unclear which side shot first, though much of the evidence points to Han Solo.)

And though few people realized it at the time, those turned out to be the opening shots of the American Revolution.

This is how revolutions often start– people who have reached their breaking points engage in a small acts of defiance that quickly escalate out of control.

We’ve seen this pattern over and over again.

The Arab Spring uprising in 2011 started with a Tunisian fruit cart merchant who lit himself on fire. Revolution ensued.

The 2014 revolution in Ukraine started when police violently clashed with peaceful anti-government demonstrators.

Revolutions, of course, can take many forms. There are social revolutions, political revolutions… and even financial revolutions.

That’s what we’re seeing today: financial revolution.

Now that interest rates are negative in many parts of the world, the financial system has become an incredibly destructive force.

Negative rates adversely impact the livelihoods of just about everyone, from the average guy on the street all the way to the banks themselves.

A few key players have reached their breaking points and are starting to engage in acts of defiance.

I told you recently how the Bavarian Banking Association in Germany advised its member banks to hold physical cash instead of reserve deposits with the European Central Bank (ECB) at negative interest.

Some major insurance funds are also jumping on board, choosing to hold physical cash instead of bank deposits earning negative interest.

In its effort to avoid negative interest rates, the Canton of Zug in Switzerland asked its citizens to delay paying their
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Phil's Favorites

China Warns Economists, Analysts, Reporters About "Overly bearish" Remarks

Courtesy of Mish.

I remain in “awe” of China-loving proponents who believe the Yuan will soon supplant the US dollar as the world’s reserve currency on the way to becoming the world’s top economic power.

By soon I mean a “decade” or less. It’s not going to happen.

Centrally planned bogus economies, with tiny illiquid bond markets, huge capital controls, pegged currencies, and no freedom of speech are no way suitable for such lofty expectations.

One can make such comments here, in China, you are in trouble.

Please consider China Presses Economists to Brighten Their Outlooks.


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Zero Hedge

Declining Production Rates for many of the Top 30 Oil Producing Countries (Video)

Courtesy of ZeroHedge. View original post here.

Submitted by EconMatters.

By EconMatters

People don`t realize the magnitude of all the Oil Producing Countries with declining Production Rates, and trending the wrong direction compared with the consistent and steady rise in Global Oil Demand ...

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Market News

News You Can Use From Phil's Stock World


Financial Markets and Economy

Seven big banks settle U.S. rate-rigging lawsuit for $324 million (Reuters)

Seven of the world's biggest banks have agreed to pay $324 million to settle a private U.S. lawsuit accusing them of rigging an interest rate benchmark used in the $553 trillion derivatives market.

Here's What Usually Happens to Stocks in Years Like 2016 (Bloomberg)

Despite the huge comeback in the S&P 500, investors remain skeptical of...

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2016 Sohn Conference: Schreiber, Robbins, Einhorn, Druckenmiller, And More [LIVE]

By Jacob Wolinsky. Originally published at ValueWalk.

The 2016 Sohn Conference starts on Wednesday (May 4th) at David Geffen Hall, Lincoln Center 10 Lincoln Center Plaza New York City. As is our custom at ValueWalk we will be providing in-depth coverage of the most anticipated event of the year. The line up this year once again does not disappoint.

Note – we will post all links to our coverage on this page so just bookmark it or sign up for our free newsletter– also we will post the schedule once it is up

Sohn Investment Conference 12:00PM – 5:30PM

Here are the speakers

  • Larry Robbins, Glenview capital
  • David Einhorn, Greenlight Capital
  • Zach Schreiber, Poinstate Capital
  • ...

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Chart School

S&P 500 Snapshot: Erasing Yesterday's Gain

Courtesy of Doug Short's Advisor Perspectives.

Yesterday, the first market day of the proverbial "sell in May" strategy, saw a 0.78% gain, but the second day of May trading erased the gain with a 0.87% loss. Today was light on economic news, with the big economic event of the week coming on Friday with the release of the April employment report. The popular financial press pointed to larger than expected contraction (at 49.4) in China's Caixin Manufacturing PMI, a diffusion index that has contracted for the past 21 months. Our colleagues at had forecast a near break-even at 49.9. The S&P 500 plunged at the open and sold off to its late morning -1.28% intraday low. It rec...

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All About Trends

Mid-Day Update

Reminder: Harlan 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

DAX Index (Germany) - Leading indicator pulling S&P down with it?

Courtesy of Chris Kimble.

Over the past 12-15 months, the majority of global stock markets have been in a down trend, creating a series of lower highs and lower lows. The German Stock market peaked around 6-weeks ahead of the S&P 500 last year and could be considered a global trend leader, creating a domino effect.

Below updates the pattern in the DAX index-


The DAX index remains inside of long-term rising channel (A), no doubt ...

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Digital Currencies

Is Craig Wright The Creator Of Bitcoin? Frisby and Matonis On 'Satoshi Nakamoto'

Courtesy of ZeroHedge. View original post here.

Is Craig Wright The Creator Of Bitcoin? Frisby and Matonis On ‘Satoshi Nakamoto’

By Mark O' 

Craig Wright, an Australian computer scientist, self-declared cyber security expert and entrepreneur, has claimed to be the creator of Bitcoin, the elusive &l...

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Swing trading portfolio - week of May 2nd, 2016

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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PRGO, VRX and an Overpriced Papa

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

By Ilene 

Remember this? It was Monday. PRGO is down from around $130 to under $100 since I started following it LAST WEEK. That's down almost 25% in a week, and almost 50% in the last year. So I wrote, 

"Perrigo CEO Joseph Papa leaves Perrigo (PRGO) to lead Valeant (VRX) while PRGO issues a warning about missing earnings expectations. Not surprisingly, PRGO stock plummeted today. 

Robert Ingram, Chairman of the [Valeant] Board, stated, "The Board has conducted a thorough search process and believes that Joe is the ideal leader for Valeant at this time. He has a strong shareholder orientation,...

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Mapping The Market

About that debate last night

Although we try to stay focused on finding and managing promising trade ideas, the comments in the comment section sometimes take a political turn (for access, try PSW — click here!). So today, Jean Luc writes,

The GOP debate last night was just unreal – are these people running to be president of the US or to lead a college fraternity! Comparing tool size? The only guy that looks semi-sane is Kasich. The other guys are just like 3 jackals right now. 

And something else – if Trump is the candidate, that little Romney speech yesterday is probably already being made into a commercial. And all these little snippets from the debate will also make some nice ads! If you are a conservative, you have to be scared now. 

Phil writes back,

I was expecting them to start throwing poop at each other &n...

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PSW is more than just stock talk!


We know you love coming here for our Stocks & Options education, strategy and trade ideas, and for Phil's daily commentary which you can't live without, but there's more! features the most important and most interesting news items from around the web, all day, every day!

News: If you missed it, you can probably find it in our Market News section. We sift through piles of news so you don't have to.   

If you are looking for non-mainstream, provocatively-narrated news and opinion pieces which promise to make you think -- we feature Zero Hedge, ...

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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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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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