Archive for the ‘Chart School’ Category

Tech Hold Breakout,.but S&P Wedge Bound

Courtesy of Declan.

It was a mixed day for indices. Large Caps remain bound by wedge support/resistance, but Tech broke upside yesterday from similar wedges and held those breakout today.

There was little change for the S&P over the last couple of days. The one technical change was the MACD trigger ‘buy’ as other technicals stayed on the bearish side.

Meanwhile, the Nasdaq cleared wedge resistance yesterday, and was able to hang on to the breakout despite today’s loss. It too enjoyed a MACD trigger ‘buy’, but had an On-Balance-Volume ‘sell’ to contend with too.

The Semiconductor Index had a better day. It suffered very little loss on yesterday’s gain and it’s on the verge of a MACD trigger ‘buy’. This will help the Nsadaq and Nasdaq 100 hold on to their breakouts.

The Russell 2000 had looked to kick start a recovery, but today’s loss turned what had the makings of a swing low into a potential ‘bear flag’; watch for follow through downside tomorrow.

Things are a little different for tomorrow. The Russell 2000 had set up for a swing low, but today’s action delivered a greater than expected loss and didn’t offer a bullish follow through. While the Nasdaq has offered a clean break higher and is holding those gains in the face of today’s loss; bulls may find some joy here.

You’ve now read my opinion, next read Douglas’ blog.

I trade a small account on eToro, and invest using Ameritrade. If you would like to join me on eToro, register through the banner link and search for “fallond”.

If you are new to spread betting, here is a guide on position size based on eToro’s system.

RTT browsing latest..

Courtesy of Read the Ticker.

rtt-browsing-latestPlease review a collection of WWW browsing results.

Date Found: Sunday, 10 April 2016, 01:58:50 PM

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Comment: Pay attention : www.thefelderrepo…

Date Found: Monday, 11 April 2016, 03:52:28 PM

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Comment: RTT: Who owns the SP500?

Date Found: Monday, 11 April 2016, 03:53:00 PM

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Comment: RTT: Looks like long term trend to resume!

Date Found: Monday, 11 April 2016, 06:54:48 PM

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Comment: BofA:The 2016 set-up is similar to early 2001 and early 2008 with 350 important resistance and 300 important support. Both 2001 and 2008 saw rebounds into bearishly positioned and falling 26/40-week MAs that formed important lower tops in May. We think this pattern could repeat or at least rhyme moving into May 2016. The breaks below 300 in September 2011 and June 2008 led to much deeper weakness and a similar break in 2016 could see the SXXP trend down toward 200.

Date Found: Wednesday, 13 April 2016, 03:32:16 PM

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Comment: Whos correct? Bonds vs Stocks, Bonds win most of the time!

Date Found: Saturday, 16 April 2016, 07:40:24 PM

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Comment: …”retail sales suggesting consumers are ramping debt just to maintain lifestyle “… RTT: This does stop with a POP…

Date Found: Wednesday, 20 April 2016, 03:56:46 AM

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Comment: Fed Can’t Admit Economy’s Weak While Obama Tries to Elect Hillary Clinton

Date Found: Thursday, 21 April 2016, 03:03:40 PM

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Comment: Earnings are nowhere near vindicating expectations, SP500 to 1,500 (if central bankers stayed out of market)

Date Found: Thursday, 21 April 2016, 06:33:37 PM

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Weekly Market Recap Oct 23, 2016

Courtesy of Blain.

The week that was…

A sleepy week indeed as almost all the “action” came out of a gap up Tuesday morning and a gap down Friday morning (which was met with buyers).  Outside of those events, the indexes stuck closely to unchanged most of the week.  Earnings began in earnest but outside of some individual high profile stories it was a lot of beating lowered expectations.

“Despite a couple of good reports, we’re in the midst of another earnings season that is hardly painting a bright picture,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott. “Having another quarter where profits contract is not an underpinning for stocks to advance, and the market is searching for, if not demanding, a catalyst to move higher. At the moment, one is lacking.”

On Tuesday it was reported that the Consumer Price Index climbed 0.3% last month, the largest jump in five months, driven by more expensive gas and rising housing costs.  That caused some chit chat about “higher inflation” that is about to hit the economy but that talk has been out there for YEARS now, and there has been very little significant inflation.   Wednesday, the Federal Reserve Beige Book suggested that the U.S. economy remains on track for modest growth while wages continue to rise steadily.  Not market moving.

Existing-home sales ran at a seasonally adjusted annual rate of 5.47 million, the National Association of Realtors said Thursday. That was a 3.2% increase from a slightly revised 5.30 million pace in August and a 0.6% increase compared to September 2015.   Sales stumbled in July and August after touching a 9-year high in June.   Still nowhere peak levels of the bubble but a solid recovery to “normalization”.


Thursday was a day of central bank focus as Mario Draghi – head of the European Central Bank – said they had neither talked about extending its quantitative-easing program, nor tapering it. The ECB met expectations by leaving interest rates steady and keeping intact its program of buying €80 billion ($88 billion) a month in bonds within the eurozone.  Analysts said…
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More of the Same: Small Bearish Wedges

Courtesy of Declan.

Friday had bears rubbing their hands in glee as it finally looked like momentum was shifting their way, but bulls again stepped in to take markets back to their open price, and in some cases, higher. Volume did climb to count as distribution, but with the small price changes for these indices

The S&P remains tightly bound to the rising wedge. Swing traders have the best chance to profit; market coiling action often leads to a directional trend – either a continuation down or a counter break higher, stop on the flip side. Technicals suggest a move lower.

The Nasdaq was one of the indices to close higher, however volume was lighter than other indices which registered declines. The relative performance of the index continues to out perform the S&P. However, the 50-day MA is playing as resistance and the bearish wedge, in its current form, is a bearish continuation pattern.

The Russell 2000 is playing a bullish tune. Friday finished with a bullish doji/hammer off key 1,205 support. Technicals are still negative, but price action points more in bulls favour based on current available action.

Dow action remains scrappy (disclosure: still holding an intermediate-time-frame short position). Bearish technicals hasn’t really expressed itself with weaker price action. The fresh ‘buy’ signal (weak, because it triggered below the zero line) may yield a new rally, although stochastics and directional index will take more than a couple of days of gains to turn bullish.

One index to watch is the Semiconductor Index. It has been a key market leader performer for 2016, but there is a chance this may be changing. The current bearish pattern is hugging its 50-day MA as a support line. The swing low from early September is an initial target.

For Monday, bulls can look to the Russell 2000, bears can look to any index shaping a bearish rising wedge (S&P, Nasdaq and Nasdaq 100), although the Semiconductor Index might be the most rewarding.

You’ve now read my opinion, next read Douglas’ blog.

I trade a small account on eToro, and invest using Ameritrade. If you would like to join me on eToro, register through the banner link and search for “fallond”.

If you are new to spread betting, here is a guide on position size based on eToro’s system.

Fund Managers’ Current Asset Allocation – October


Fund Managers' Current Asset Allocation – October

Courtesy of , The Fat Pitch

Summary: Throughout 2013, 2014 and early 2015, fund managers were heavily overweight equities and underweight cash and bonds. Those allocations have entirely flipped in 2016, with investors persistently shunning equities in exchange for holding cash.

Global equities are more than 15% higher than in February. A tailwind for this rally has been the bearish positioning of investors, with fund managers' cash in October rising to the highest level since 2001. Similarly, their equity allocations are now like those in February, mid-2010 and mid-2012, periods which were notable lows for equity prices during this bull market. Overall, fund managers' defensive positioning supports higher equity prices in the month(s) ahead.

Allocations to US equities had been near 8-year lows over the past year and half, during which the US outperformed most of the world. After rising for two months during the summer, allocations fell again to underweight in both September and October. Bearish sentiment remains a tailwind for US equities.

European equity markets, which had been the consensus overweight and also the world's worst performing region, are now underweighted relative to their long term mean.  Investors are chasing the world's best performing region – emerging markets – which now have their highest overweight in 3 1/2 years. Emerging markets may rise further but note that the contrarian long trade is now over.

* * *

Among the various ways of measuring investor sentiment, the BAML survey of global fund managers is one of the better ones as the results reflect how managers are allocated in various asset classes. These managers oversee a combined $600b in assets.

The data should be viewed mostly from a contrarian perspective; that is, when equities fall in price, allocations to cash go higher and allocations to equities go lower as investors become bearish, setting up a buy signal. When prices rise, the opposite occurs, setting up a sell signal. We did a recap of this pattern in December 2014 (post).

Let's review the highlights from the past month.

Cash: Fund managers' cash levels at the equity low in February were

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Another Health Care Chart Looks Sick


Another Health Care Chart Looks Sick

Courtesy of Dana Lyons


A popular pharmaceutical ETF is testing its (ill-fated?) post-2009 bull market trendline.


As the major stock averages continue to bide their time in sideways fashion, one of the weaker sectors in the market continues to look sick. We have covered the relative laggard health care sector plenty over the past few weeks. The focus in many of the posts has centered around the various indices’ tests of their post-2008-2009 bull market Up trendlines. Some tests have been successful (e.g., biotech index, BTK…for now) while some have failed (e.g., pharmaceutical index, DRG). Today’s Chart Of The Day adds another example of such a test from the health care sector. This time, it is a fund, the SPDR S&P Pharmaceuticals ETF, ticker, XPH. 



Like its pharma index sister, the DRG, the XPH is testing its post-2009 Up trendline (on a log scale). That said, while the DRG had held its steeper trendline connecting the 2009, 2011 and early 2016 lows until breaking it last week, the XPH (on an unadjusted basis) broke its similar trendline last year. However, we see a new, shallower trendline connecting the 2009 lows and the March 2016 lows serving as support over the past 6 months. Tests of this line in May and June resulted in bounces in the XPH. A few months later, we see the XPH testing this line once again.

In a weakish tape today, we saw the XPH pop nearly 1%. Thus, the line continues to provide support. However, like a sick patient, a dose of medicine may provide a temporary jolt, but if the symptoms persist, a full recovery may remain elusive. As such, despite the temporary bounces, this chart still looks sick.

As we have mentioned often, the more frequent that trendline tests occur, the more likely, in our experience, the trendline is to break. The troubling thing is that with 4 touches of the trendline in 7 months, the symptoms seem to persist. That is, the XPH has been unable to create any meaningful…
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Can Biotech Stocks Stay “Trendy”?


Can Biotech Stocks Stay “Trendy”?

Courtesy of Dana Lyons


A key gauge of biotechnology stocks is testing major trendline support presently – can it hold yet again?


When this market cycle finally comes to an end, among the sectors that will be remembered as one of its key drivers is biotechnology. With a gaudy 750% gain since its 2009 lows, the Biotech run had been so hot, it attracted “bubble” talk in its descriptions, including by us back on March 23, 2015 (backslap: the run actually topped the very day before that post, save for a brief, failed higher high that July). Since then, the sector has fallen on tougher times, leading to calls that a top is indeed in. We don’t know if that’s the case or not. However, with distinct lower highs now on the chart, the sector is one breakdown away from making a more compelling “top is in” case. It very well may get that opportunity in short order.

The most popular index in the sector is the NYSE ARCA Biotechnology Index, ticker, BTK. Since 2008, the BTK has been riding an Up trendline on its log scale chart. This trendline begins at the BTK’s shock low in November 2008, and connects the lows in March 2009, November & December 2011 and February & June of this year. After the selloff in the sector over the past few weeks, the BTK finds itself once again testing this major post-2008 Up trendlin around the 3000 level. To boot, the index is also presently testing the top side of its post-2015 Down trendline (also on a log scale) that it broke above this past July.




This convergence of trendlines should provide for staunch support in the BTK and biotech stocks – at least in the short-term. Our concern in this case, as we have mentioned often, is that the increased frequency (i.e., decreased time lapse) of trendline touches is often a harbinger of a forthcoming trendline break. If that is the case here, after whatever short-term bounce may materialize, we can likely expect to see the trendline…
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SP500 Status Pre US 2016 Elections

Courtesy of Read the Ticker.

sp500-status-pre-us-2016-electionsWhere have we been, what does the future look like?

More from RTT Tv

NOTE: does allow users to load objects and text on charts, however some annotations are by a free third party image tool named

Investing Quote…

…”There is what I call the behaviour of a stock, actions that enable you to judge whether or not it is going to proceed in accordance with the precedents that your observation has noted. If a stock doesn’t act right don’t touch it, because, being unable to tell precisely what is wrong, you cannot tell which way it is going.”…

Jesse Livermore

..“It is much harder to sell stocks correctly than to buy them correctly.” Because of the emotional aspect of trading, if a “stock went up, the average investor would hold because he wants more gains – he’s exhibiting greed. If the stock declines, he also holds on and hopes the stock will come back so he can at least sell and break even – he’s hoping against hope”..

Bernard Baruch

..The time of maximum pessimism is the best time to buy and the time of maximum optimism is the best time to sell”..

John Templeton

..“Successful speculation requires staying on top of changes in industries and companies that either create new industries or improve on existing industries. The majority of your profits will come from these two … The shrewdest traders throughout history all adapted the skill of reactionary change, as the market constantly presents new and different opportunities.”..

Bernard Baruch

Unless you can watch your stock holding decline by 50 per cent without becoming panic stricken, you should not be in the stock market.

Warren Buffett

Mini-Bearish Wedges in Lead Markets

Courtesy of Declan.

The last few days have seen little movement in key markets. The one potential development to look to resolve tomorrow or Monday are rising wedges in certain markets. The advantage bulls have is that if markets can push above wedge highs (which are close), shorts will be squeezed in a buying scramble.

The S&P has a created a small, rising wedge off a larger rising wedge from September. The 20-day and 50-day MAs lend additional overhead resistance as does higher volume distribution for the index today (although the trading range for the day was very narrow).

The Nasdaq hasn’t got the earlier bearish wedge as evident in the S&P, but it is mapping a mini-wedge like the latter index. Technicals are mostly negative, although stochastics [39,1] are rebounding off a level typical of a bullish reaction.

The one index doing its own thing is the Russell 2000. After coming off what had the look of a very bearish ‘bull trap’ breakout, the index has been able to dig in at early September lows. There is a relatively low risk opportunity for longs with a stop on a loss of 1,200.

For tomorrow, bulls should keep an eye on the Russell 2000 – early strength could bring buyers back to this neglected index. Shorts will be looking to the rising wedges to jump on the quick if there is an early breakdown.

You’ve now read my opinion, next read Douglas’ blog.

I trade a small account on eToro, and invest using Ameritrade. If you would like to join me on eToro, register through the banner link and search for “fallond”.

If you are new to spread betting, here is a guide on position size based on eToro’s system.

Here’s Why Technical Analysis Gets a Bad Rap


Here’s Why Technical Analysis Gets a Bad Rap

Courtesy of , The Irrelevant Investor

There are a lot of people who don’t believe in the merits of technical analysis. It doesn’t make sense to them that you can look at past price movements and determine future price movements. If stock prices are driven by earnings, how can a chart provide any insight? Well, yeah, stocks are driven by earnings in the long-run, but in the short-run they’re driven by sentiment, which can be observed by measuring supply and demand.

Anecdotally, nonsensical forecasts seems to permeate from technical analysis way more than fundamental analysis, which is the main reason it often gets ridiculed. (By the way, I’m not suggesting nonsensical forecasts aren’t ever driven by fundamental analysis, Dow 36,000 is a great example.) These outrageous claims are provided by technicians that abuse the charts. They’ll draw a few dozen lines, waves and retracements, and use a handful of oscillators. In addition to some of the crazy artwork, the patterns they’ll cite have names that sound ridiculous to the laymen; a rising wedge, head and shoulders, three peaks and a domed house, etc. 

Here’s a recent “Red Alert” example from HSBC:


The Head & Shoulders Top with the neckline acting as resistance comes on top of a potentially bearish Elliot Wave irregular flat pattern and the fact that the index is now backing off from the old 2015 highs. A close below 17,992 would be very bearish. Pressure would ease above 18,449.

Lol, what?

Here is another example from an article yesterday in the Wall Street Journal with the headline “Technical Analysts are Getting Nervous About This Market.” It included the following statement:

Those who owned S&P 500 stocks only when both the index and its cumulative advance-decline line were below their 50-day moving averages, as is currently the case, would have lost about 50% since 2012, according to FBN Securities.

What does this actually mean!?!

And finally, stuff like this exists, which shows stocks vs. regional surface temperature of the Pacific Ocean…


Requires no further commentary.

To me, technical analysis is…
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Ed Garden Bullish On Bank of New York Mellon

By Jacob Wolinsky. Originally published at ValueWalk.

We are out at the Invest for Kids conference today in Chicago – below are our informal notes from the presentation by Ed Garden Of Trian Partners. We have a lot more coverage so stay tuned 

Also we have a lot more conference coverage under our hedge fund Q3 post

Ed Garden

Bank of New York Mellon (BK)

Trian’s general goal is to work with management and the board to improve the income statement, very different from traditional activist.  More like a private equity sponsor.  Looking to do two things 1) Eliminate management’s information advantage over the board, and 2) attack the problem issues directly. ...

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Zero Hedge

Stocks Pump'n'Dump As Crude Crumbles To 3-Week Lows

Courtesy of ZeroHedge. View original post here.

Ok - to summarize - stocks ripped to a technical level then dipped, thanks to momentum ignition from the crude complex as machines misread the inventory draw data (which sent oil over $50 opnly to crash back to the lows)... Homebuilders dropped as new home sales rose... and restaurant stocks plunged as Services PMI soared... Makes perfect sense, right?

Builders battered despite surge in new home sales...

Despite a surge in Services PMI, ...

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Digital Currencies

Bitcoin Soars As China Launches Crackdown On Wealth-Management Products

Courtesy of ZeroHedge. View original post here.

After trading in a tight range for much of the summer, coiled within a $100 range around the mid-$500s, over the past several weeks bitcoin has once again started to push higher, closely tracking the decline in the Chinese Yuan as shown below.

However, the most recent burst in bitcoin activity, which sent it surging by over $20 overnight, has little to do with any moves in the official Chinese currency, which recently...

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Phil's Favorites

US Trade Deficit Sinks 5.2%; Gaming the GDP Effect; Food for Thought

Courtesy of Mish.

This morning the The U.S. Census Bureau announced “Advance Numbers” for international trade, wholesale inventories, and retail inventories for September 2016.

The key line item is a decline in imports and a rise in exports. This will likely, but not necessarily, boost 3rd quarter GDP estimates.

Advance Trade and Inventory Numbers

Advance International Trade

Advance International Trade Details...

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Kimble Charting Solutions

Connect Series Webinar Oct 2016

Courtesy of Chris Kimble.

We cover the most dominating themes in the markets and share pattern analysis and perspectives to empower members to make better investment decisions.

To become a member of Kimble Charting Solutions, click here.


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Market News

News You Can Use From Phil's Stock World


Financial Markets and Economy

Oil Falls as U.S. Supply Seen Rising While Russia Resists Cuts (Bloomberg)

Oil dropped for a third day after industry data showed U.S. crude stockpiles expanded as Russia reiterated it would prefer freezing output at current levels rather than cutting.

Wall Street's top oil watcher explains what's happening in Saudi Arabia, Russia, and Libya (Business Insider)

Helima Croft, head of commodity strategy at RBC Capital Markets, spends her days keeping tabs on geopolitics and oil.


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Chart School

Tech Hold Breakout,.but S&P Wedge Bound

Courtesy of Declan.

It was a mixed day for indices. Large Caps remain bound by wedge support/resistance, but Tech broke upside yesterday from similar wedges and held those breakout today.

There was little change for the S&P over the last couple of days. The one technical change was the MACD trigger 'buy' as other technicals stayed on the bearish side.

Meanwhile, the Nasdaq cleared wedge resistance yesterday, and was able to hang on to the breakout despite today's loss. It too enjoyed a MACD trigger 'buy', but had an On-Bal...

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Members' Corner

A Lack of Faith, Disturbing?

Courtesy of Nattering Naybob.

Over at Philstockworld... High Finance for Real People - Fun and Profits...   

Phil – "long-term rates are suddenly ticking up as bond buyers have lost faith that the Central Banksters will be able to keep a lid on inflation"More so a rebirth of hope for much needed monetary flows in the form of "dollars" and some form of economic recovery rising in the distance.  Good luck there.  

By now those rogue bond traders should know the power of the dark side and all the carnage which that widow makers trade has left in its wake. J...

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Swing trading portfolio - week of October 24th,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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Mapping The Market

The Most Overlooked Trait of Investing Success

Via Jean-Luc

Good article on investing success:

The Most Overlooked Trait of Investing Success

By Morgan Housel

There is a reason no Berkshire Hathaway investor chides Buffett when the company has a bad quarter. It’s because Buffett has so thoroughly convinced his investors that it’s pointless to try to navigate around 90-day intervals. He’s done that by writing incredibly lucid letters to investors for the last 50 years, communicating in easy-to-understand language at annual meetings, and speaking on TV in ways that someone with no investing experience can grasp.

Yes, Buffett runs an amazing investment company. But he also runs an amazing investor company. One of the most underappreciated part of his s...

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Epizyme - A Waiting Game

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

Epizyme was founded in 2007, and trying to create drugs to treat patient's cancer by focusing on genetically-linked differences between normal and cancer cells. Cancer areas of focus include leukemia, Non-Hodgkin's lymphoma and breast cancer.  One of the Epizme cofounders, H. Robert Horvitz, won the Nobel Prize in Medicine in 2002 for "discoveries concerning genetic regulation of organ development and programmed cell death."

Before discussing the drug targets of Epizyme, understanding epigenetics is crucial to comprehend the company's goals.  

Genetic components are the DNA sequences that are 'inherited.'  Some of these genes are stronger than others in their expression (e.g., eye color).  Yet, some genes turn on or off due to external factors (environmental), and it is und...

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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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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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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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