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Chart o’ the Day: Don’t “Invest” in Stupid Sh*t

Joshua commented on the QZ article I posted a couple days ago and perfectly summarized the take-home message into an Investing Lesson. 

Chart o’ the Day: Don’t “Invest” in Stupid Sh*t

Courtesy of 

worst

The chart above comes from Matt Phillips at Quartz and is a good reminder of why you shouldn’t invest in stupid sh*t. Obviously any asset can decline in price – blue chip stocks, your house, etc – nothing is immune. But don’t go out looking for additional trouble when the world is perfectly capable of handing you losses on the regular stuff.

****

Recall Bitcoin's ugly chart for the year (source).





Market Selling Intensifies

Courtesy of Declan.

It ended up a roller coaster ride with markets rallying, then suffering losses to return indices to their lows. Volume rose in confirmed distribution, and many indices now sit inside Fib retracement levels – a good place to launch a relief bounce.

The S&P finished just a few points above the 50% Fib level, with the 200-day MA near the 61.8% zone – and a more probable place for a bounce.


The Nasdaq closed at the 38.2% level, but just below its 50-day MA. The inverse hammer at oversold stochastics is a potential reversal play. Watch for an upside gap tomorrow.

The Russell 2000 is another index sitting at the 38.2% Fib level, and just below its 50-day MA. Like the Nasdaq, it’s primed for a bounce, but is also outperforming the Nasdaq in relative terms.

Not to be left out, but the Dow is on its 50% Fib retracement zone. Also note the clustering of distribution days from the recent high.

Finally, the Semiconductor Index is right back at its breakout level of 659. It’s questionable whether the support level will hold given selling in lead indices, but this was also be the first test of the breakout. A small bounce may emerge because of this.

For tomorrow, we are edging ever closer to a bounce play. My #sectorbreadth analysis has the S&P at 27% bullishness, which is not heavily oversold. The S&P is also 1.3% above its 200-day MA – not exactly swing low territory. So tomorrow may not be the day, but those taking the punt may find themselves rewarded in 6-months time.  

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Saudi crude oil target is $40, chart agrees.

Courtesy of Read the Ticker.

saudi-crude-oil-target-is-40-chart-agreesWhere will the most important commodity in the world halt is fall, the House of Saudi says $40.

In 1985 Saudi (OPEC) did a similar sell off to protect their market share when the UK North Sea oil came on line. World oil prices plunged 69%. Lets face it, oil above $100 with all the new supply on the market was just to high, and as the Saudi’s put it, $100 allowed a lot of inefficient producers to enter the market (ie US shale oil), and has allowed Russia to expand its energy complex. Therefore the current sell off is forecasting lower oil prices for many years to come, most likely between $30 to $50 for a year or two, then a little higher after that, it may be that $100 oil wont be seen again for 5 to 10 years.

Of course all the debt associated with oil exploration while oil was above $100 is going to smash risk markets around for the next 12 months. You can not mention debt blow ups, with out the risk of derivative blow ups either. This risk will make it hard for risk on markets to climb higher.

Click for popup. Clear your browser cache if image is not showing.
OIL

Here is a chart with Crude, US dollar (DXY) and Gold (GLD). When crude stop falling, the USD will start to fall as traders will take profits on that event. Thus anti USD trades (ie metals, forex) will begin to rise.

Click for popup. Clear your browser cache if image is not showing.
GOLD



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

Investing Quote…

..”I believe that uncontrolled basic emotions are the true and deadly enemy of the speculator. That hope, fear, and greed is always present, these emotions sit on the edge of the psyche, waiting on the sidelines, waiting to jump into the action.”..

Jesse Livermore


..”A market is the combined behavior of thousands of people responding to information, misinformation and whim”..

Kenneth Chang








It’s Not Just Russia: Middle East In Freefall, Biggest Plunge In 6 Years

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Dubai's Financial Market General Index is now down 40% since the peak in oil prices in June this year. For now, only Qatar is clinging to gains year-to-date as the rest of the Middle Eastern equity markets give up 30-60% gains from mid-year and tumble to negative. Dubai and Abu Dhabi alone are down over 8% since Friday. Saudi Arabia is down 7.3% today – the biggest drop in 6 years.

Saudi Arabia's worst day in 6 years

 

Year-to-date, Kuwait is now down almost 20% with only Qatar clinging to gains…

 

as All Middle Eastern equity markets have collapsed since oil peaked…

Charts: Bloomberg





Further Selling, But More Likely

Courtesy of Declan.

The S&P took another beating as it undercut its 50-day MA. The day finished with confirmed distribution without any clear late day surge by bulls. Tomorrow could offer more of the same, although there is the benefit of Fib retracements on which buyers can lean on.


The Nasdaq finished on breakout support. However, today’s candlestick finished with a bearish engulfing pattern (weakened, because traditionally it’s only viewed as bearish when overbought).

The one index which I thought could hang on was the Russell 2000. It broke below range support, and its 200-day MA, leaving Fib retracements as the next support levels to work with.

The Semiconductor Index is fast approaching breakout support. The rate of advance is looking a little quick for it to be a bullish retracement, so look for the next bounce to be sold.

Tuesday is another opportunity for buyers to make a stance. I would be looking for an afternoon buying surge, but keep any eye on Fib levels – at which tomorrow’s open will offer Fib level support for the S&P and Russell 2000.

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Further Selling, But More Likely

Courtesy of Declan.

The S&P took another beating as it undercut its 50-day MA. The day finished with confirmed distribution without any clear late day surge by bulls. Tomorrow could offer more of the same, although there is the benefit of Fib retracements on which buyers can lean on.


The Nasdaq finished on breakout support. However, today’s candlestick finished with a bearish engulfing pattern (weakened, because traditionally it’s only viewed as bearish when overbought).

The one index which I thought could hang on was the Russell 2000. It broke below range support, and its 200-day MA, leaving Fib retracements as the next support levels to work with.

The Semiconductor Index is fast approaching breakout support. The rate of advance is looking a little quick for it to be a bullish retracement, so look for the next bounce to be sold.

Tuesday is another opportunity for buyers to make a stance. I would be looking for an afternoon buying surge, but keep any eye on Fib levels – at which tomorrow’s open will offer Fib level support for the S&P and Russell 2000.

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Accepting KIVA gift certificates to help support the work on this blog. All certificates gifted are converted into loans for those who need the help more.





S&P Breakout Support Cleanly Cut

Courtesy of Declan.

There wasn’t much for bulls to work with by the time markets closed Friday. I was somewhat surprised to see the S&P give up 2,009 breakout support without too much of a struggle. It finished at its 50-day MA which is also near psychological support of 2,000. Volume also climbed in confirmed distribution. Monday offers another chance for a bounce, but there is growing supply overhead which has the potential to kill any sustained Santa Rally.


The Nasdaq also suffered losses, but it does at least have support levels to work with. The question is whether it can hang on in the face of broader selling from other markets.

Nasdaq breadth metrics are weakening from a swing high, but not from overbought conditions,which would be a better marker for a top.

The semiconductor index has suffered in sympathy, although its losses have the look of a ‘bull flag’. Watch for a potential breakout.

The Dow finished right on breakout support, which itself is a converged Fib level. With the S&P undercutting its breakout level it’s hard to see the Dow holding out, but while it’s there these levels can’t be ignored.

The Russell 2000 finished on trading range support. The index reached a major low in October, and is holding up better to the selling experienced by other indices. Another swoon lower could offer a second opportunity for long term buyers.

For Monday, look for rallies in the Dow and Russell 2000. Sellers have the best chance in the S&P, although the short-side is likely limited in the short term.

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Accepting KIVA gift certificates to help support the work on this blog. All certificates gifted are converted into loans for those who need the help more.





Bond yields falling sharply…

Treasury Yields Are Crashing-er

By Tyler Durden

The entire bond complex has come under pressure here with 2Y through 30Y all seeing yields jerk lower. 10Y and 30Y yields are back at the flash-crash Bullard Lows of Oct 16th… as yet another squeeze of record Treasury Shorts blows the minds of every talking head on CNBC…

From the close of the day when Jim Bullard saved the world!!!

Full article from Zero Hedge.

The Oil Crash Is Not The Biggest Story In The Global Markets Right Now

By  at the Business Insider

The most talked-about story in the market is oil, but there is a more important move happening in markets: US Treasury bonds are on fire.

The yield on long-dated US Treasury bonds — meaning the 10- and 30-year bonds — has been falling sharply over the past week. 

When long-dated bonds rally, it is taken as a sign that investors are "fleeing to safety" or "seeking protection," as US Treasury bonds are considered the safest investment you can make.

Keep reading >

30year1211


Read more:  Treasury Bond Rally, December 11 – Business Insider.





Late Selling Puts Pressure on Friday

Courtesy of Declan.

Thursday saw another attempt by bulls to make up the losses of the previous day, but bears didn’t wait until the next day to attack. Instead, an afternoon assault pushed markets back towards their lows, setting up a situation for further losses today (Friday).

Volume was light, and there is plenty of support nearby to work, but it doesn’t look good if you want to be a buyer for the longer term.  If that’s your goal, refer to my table below to identify market conditions best suited to do this.

As for markets, the S&P inverse hammer looks ugly. A test of 2,009 today or Monday doesn’t look unreasonable.


The Nasdaq has rewarded shorts who attacked the ‘bear flag’ breakdown quite handsomely.  More to follow today? The inside day looks like a bullish harami doji (one of the most reliable reversal patterns), but as the index is not oversold I would not rely on it to hold true Friday.

The Russell is range bound, and of all the indices it offers no real advantage to bull or bear.

For Friday, look for selling to continue. If markets rally, look to stand aside until they make it close to week’s highs, then attack again with short positions.  Any short will be negated if November swing highs are taken out.

Accepting KIVA gift certificates to help support the work on this blog. All certificates gifted are converted into loans for those who need the help more.





Yesterday’s Recovery Wiped

Courtesy of Declan.

It looked a weak recovery, and today’s action quickly exposed the nature of yesterday’s buying. Volume was modest, as holiday trading continues to be a theme. Window dressing into end-of-year remains a bullish overhang, but there is no guarantee Santa will keep on delivering gifts.

For the S&P, look to Fib retracements and 2,009 breakout support. Buyers may attempt another run at the index then.


The Nasdaq has delivered nicely on the ‘bear flag’ breakdown. There is probably more to come from bears, with shorts likely to start covering at 4,610, down through the 50-day MA, to the first of the Fib retracements at 4,538.

The Russell 2000 finished with an inside day, a quite large inside day. However, the index is in effect range bound between 1,154 support and 1,191 resistance. Trading between these ranges is difficult given the noise of recent trading action.

Rallies can be shorted until there is a break of November highs. Measure risk accordingly.


Accepting KIVA gift certificates to help support the work on this blog. All certificates gifted are converted into loans for those who need the help more.





 
 
 

Zero Hedge

No More "Considerable Time" - Meet The New, "Patient" Fed

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

With expectations that the FOMC would drop "considerable time," ignore foreign market instability, and shrug off HY credit's demise (as they had previously said it was a bubble), the members did not let anyone down...

  • *FOMC SAYS IT CAN BE 'PATIENT' IN APPROACH TO RAISING RATES
  • *FOMC DECLINES TO MENTION RECENT GLOBAL MARKET INSTABILITY
  • *FOMC SAYS PATIENT APPROACH 'CONSISTENT WITH OCT. STATEMENT'
  • *FISHER, PLOSSER, KOCHERLAKOTA DISSENT IN FOMC DECISION

For the 3rd FOMC meeting in a row, equity markets have...



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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

Chart o' the Day: Don't "Invest" in Stupid Sh*t

Joshua commented on the QZ article I posted a couple days ago and perfectly summarized the take-home message into an Investing Lesson. 

Chart o’ the Day: Don’t “Invest” in Stupid Sh*t

Courtesy of 

The chart above comes from Matt Phillips at Quartz and is a good reminder of why you shouldn’t invest in s...



more from Ilene

Digital Currencies

Chart o' the Day: Don't "Invest" in Stupid Sh*t

Joshua commented on the QZ article I posted a couple days ago and perfectly summarized the take-home message into an Investing Lesson. 

Chart o’ the Day: Don’t “Invest” in Stupid Sh*t

Courtesy of 

The chart above comes from Matt Phillips at Quartz and is a good reminder of why you shouldn’t invest in s...



more from Bitcoin

Chart School

Market Selling Intensifies

Courtesy of Declan.

It ended up a roller coaster ride with markets rallying, then suffering losses to return indices to their lows. Volume rose in confirmed distribution, and many indices now sit inside Fib retracement levels - a good place to launch a relief bounce.

The S&P finished just a few points above the 50% Fib level, with the 200-day MA near the 61.8% zone - and a more probable place for a bounce.


The Nasdaq closed at the 38.2% level, but just below its 50-day MA. The inverse hammer at oversold stochastics is a potential reversal play. Watch for an upside gap tomorrow.

...

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OpTrader

Swing trading portfolio - week of December 15th, 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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Sabrient

Sector Detector: Energy sector rains on bulls' parade, but skies may clear soon

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

Courtesy of Scott Martindale of Sabrient Systems and Gradient Analytics

Stocks have needed a reason to take a breather and pull back in this long-standing ultra-bullish climate, with strong economic data and seasonality providing impressive tailwinds -- and plummeting oil prices certainly have given it to them. But this minor pullback was fully expected and indeed desirable for market health. The future remains bright for the U.S. economy and corporate profits despite the collapse in oil, and now the overbought technical condition has been relieved. While most sectors are gathering fundamental support and our sector rotation model remains bullish, the Energy sector looks fundamentally weak and continues to ran...



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Stock World Weekly

Stock World Weekly

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

Here's this week's Stock World Weekly.

Click here and sign in with your user name and password. 

 

...

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Option Review

SPX Call Spread Eyes Fresh Record Highs By Year End

Stocks got off to a rocky start on the first trading day in December, with the S&P 500 Index slipping just below 2050 on Monday. Based on one large bullish SPX options trade executed on Wednesday, however, such price action is not likely to break the trend of strong gains observed in the benchmark index since mid-October. It looks like one options market participant purchased 25,000 of the 31Dec’14 2105/2115 call spreads at a net premium of $2.70 each. The trade cost $6.75mm to put on, and represents the maximum potential loss on the position should the 2105 calls expire worthless at the end of December. The call spread could reap profits of as much as $7.30 per spread, or $18.25mm, in the event that the SPX ends the year above 2115. The index would need to rally 2.0% over the current level...



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Market Shadows

Official Moves in the Market Shadows' Virtual Portfolio

By Ilene 

I officially bought 250 shares of EZCH at $18.76 and sold 300 shares of IGT at $17.09 in Market Shadows' Virtual Portfolio yesterday (Fri. 11-21).

Click here for Thursday's post where I was thinking about buying EZCH. After further reading, I decided to add it to the virtual portfolio and to sell IGT and several other stocks, which we'll be saying goodbye to next week.

Notes

1. th...



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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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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!




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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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