Archive for the ‘High Mailing Priority’ Category

The ‘real’ St. Valentine was no patron of love

 

The 'real' St. Valentine was no patron of love

File 20180209 51703 10w4gt5.jpg?ixlib=rb 1.1

Relics of St. Valentine of Terni at the basilica of Saint Mary in Cosmedin. Dnalor 01 (Own work) , CC BY-SA

Courtesy of Lisa Bitel, University of Southern California – Dornsife College of Letters, Arts and Sciences

On Feb. 14, sweethearts of all ages will exchange cards, flowers, candy, and more lavish gifts in the name of St. Valentine. But as a historian of Christianity, I can tell you that at the root of our modern holiday is a beautiful fiction. St. Valentine was no lover or patron of love.

Valentine’s Day, in fact, originated as a liturgical feast to celebrate the decapitation of a third-century Christian martyr, or perhaps two. So, how did we get from beheading to betrothing on Valentine’s Day?

Early origins of St. Valentine

Ancient sources reveal that there were several St. Valentines who died on Feb. 14. Two of them were executed during the reign of Roman Emperor Claudius Gothicus in 269-270 A.D., at a time when persecution of Christians was common.

How do we know this? Because, an order of Belgian monks spent three centuries collecting evidence for the lives of saints from manuscript archives around the known world.

They were called Bollandists after Jean Bolland, a Jesuit scholar who began publishing the massive 68-folio volumes of “Acta Sanctorum,” or “Lives of the Saints,” beginning in 1643.

Since then, successive generations of monks continued the work until the last volume was published in 1940. The Brothers dug up every scrap of information about every saint on the liturgical calendar and printed the texts arranged according to the saint’s feast day.

The Valentine martyrs

The volume encompassing Feb. 14 contains the stories of a handful of “Valentini,” including the earliest three of whom died in the third century.

St. Valentine blessing an epileptic. Wellcome Images, CC BY

The earliest Valentinus is said to have died in Africa, along with 24 soldiers. Unfortunately, even…
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See Phil at the New York TradersExpo – Feb 25 – 27, 2018

 

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An Unprecedented Decline

 

An Unprecedented Decline

Courtesy of 

Conventional wisdom goes that tops are a process. This makes sense when you think about market psychology. In a rising market, every pullback is bought, which conditions us to expect future dips to behave like previous ones. But eventually, bounces are met with less enthusiasm and the rallying cry of buy the dip morphs into sell the rip. This typically plays out over weeks and months because in a bull market, investor psychology doesn’t stop on a dime, but rather it turns around like a cruise ship. The 1969 top provides a good visual of what this looks like.

Markets usually to start roll over before they fall through the elevator shaft.

By October 1929, the Dow was already 30% off its August highs and had spent more than a month below its 50-day moving average. On October 18, 1987, the Friday before the crash, the Dow was 18% lower than its August highs and again, had spent a few weeks below its 50-day moving average. I don’t believe the 50-day is some magic line that is any more important than the 20-day, I just use it here to make the point that at previous market tops, there was some deterioration before a vertical plunge lower.

This time, there was very little warning. Now, what just happened is nothing compared to the crashes of 1929 and 1987, but the recent move is unprecedented in terms of how quickly stocks fell from an all-time high. CTAs – which are expected to provide protection in a down market – didn’t have time to react, due to the nature of the decline. The CTA index experienced its worst 5-day return since 2007.

On January 26th, 2018, the Dow Jones Industrial Average closed at an all-time high. On Thursday, nine days later, it closed more than 10% below those highs. This is the first time ever (going back to 1900) that the Dow closed at an all-time high and declined 10% over the next nine days (1928 saw an all-time high then declined 9% in nine days).

The V-top we just experienced is a great reminder that anything can happen, and just because something has never happened doesn’t mean it can’t.…
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Passive My A**

 

Passive My A**

Courtesy of 

How about this, party people – Listerine was originally invented 135 years ago to cure gonorrhea. And then forty years later it became a mouthwash. True story.

I’ll do you one better – Viagra was originally expected to be a treatment for hypertension, angina, and other symptoms of heart disease. It failed to treat these problems in Phase I, but there was a delightful side effect reported by male patients in the study…

Brandy was invented 900 years ago by merchants who had boiled all the water out of their wine in order to transport it more cheaply. Then they tried the distillate and discovered they now had two drinkable potions rather than one.

Play-Doh was invented to be a wallpaper cleaner. Coca-Cola was originally sold to cure morphine addiction, etc. I could go on and on.

One of the biggest misunderstandings about the ETF and indexing revolution is in the usage of the funds. The popularity of these products should not be looked at as some sort of dramatic sea change in the underlying fear-and-greed driven behavior of investors. Just because people are using ETFs, doesn’t mean they’re using them well or that they’ve somehow all become disciplined investors.

Passive products, ironically, have become well established as ubiquitous trading vehicles over the last two decades. Tallying up ETF assets and concluding that there’s been a behavioral revolution would be a major mistake. Everyone’s calmly passive until their experience their first 10% loss.

The net flow figures out of SPY last week are bonkers. And I think they go a long way to illustrate how foolish it is to use the terms passive and index funds interchangeably.

Eric Balchunas at Bloomberg:

Outflows amounted to 8 percent of the fund’s total assets at the start of the week, a rate of withdrawals not seen since August 2010.

The five-session stampede for the exits erased the previous nine weeks of inflows into the fund, which is issued by State Street. The combination of price declines and withdrawals erased $38.6 billion in SPY’s assets. That’s nearly double the second-worst showing of $19.4 billion in asset shrinkage during the week ending Aug. 21, 2015.

Josh here – 8% of the ETF’s total assets came out in five days! LOL, passive my a**.





Be Terrified

 

Be Terrified

Courtesy of 

You are going to run into people who are so certain of what higher volatility means for the markets that it’s as if they are reciting their own name and phone number. Be terrified of their indefatigability about a topic like this. Imagine the sheer arrogance and borderline mental illness required for a person to assume that they can accurately foretell the actions of a hundred million investors around the world.

You will come into contact with investment professionals who give you direct, unflinching answers about what the impact of higher rates will be on the stock market. Despite the fact that a million other variables will simultaneously inflict their own unquantifiable influence on outcomes for each of the components of the Dow Jones, the S&P 500 and the Nasdaq Composite. Be terrified and slowly back away, for you are talking with an undeniably unscrupulous or insane person.

You will meet all sorts of people bearing rules, formulas and equations for why this thing should most assuredly follow that thing – as though there is some fundamental, physical law that can merely be looked up in a library and adhered to by anyone who bothers to search. Be terrified, for you are in discussions with the delusional and the deranged.

You may end up conversing with a person swearing by some rule of thumb or another as though any kind of constant can be applied to a complex, adaptive, biological system like the investment markets. The only response is to be terrified that someone could possibly not know better than to think some fragment of Old Wives Tale wisdom or age-old aphorism could ever be universally applied, in all situations, to satisfactory ends.

If there were ironclad rules, we would all be following them.

If there were inter-market relationships we could set our watches by, everyone would always know what time it was.

If there were immutable formulas, we’d all have adopted them a long time ago.

If there were an answer, we’d have all had the whisper of it imprinted on our very souls.

If there were a shortcut or a cheat code, every little boy…
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The Definition

 

The Definition

Courtesy of 

So, it’s official – we’ve had a stock market correction, according to the universally agreed upon definition of a 10% drawdown from the recent high.

From the New York Times, a recent history:

Too soon to know if this correction will turn into a bear market (regarded by most as a 20% drawdown). My director of research Michael Batnick notes that of the fifteen true corrections from record highs since 1928 (prior to this one), ten turned into full-blown bear markets while five did not.

More importantly, stocks have spent 55% of the time since 1928 in a 10% drawdown, so it’s fair to say that we’re in a completely normal environment.

The only thing that’s abnormal is the speed with which this 10% drawdown took place. Here’s my pal Ryan Detrick of LPL:

Perhaps we deserved that speed of decline. The S&P 500 chart was ridiculously extended to the upside.

Here’s Mike’s tweet and chart illustrating this:

Now, the good news:
 
54 million Americans are actively contributing to 401(k)s, in 550,000 plus corporate retirement plans across the country. Should current levels stand, next week they’ll be adding to their accounts from their Feb 15 paychecks en masse. They’ll be able to buy 10% more of the stock mutual funds they allocate to without doing anything. This is fantastic for everyone who is funding a goal years out into the future.
 
As for investors who are currently in retirement and drawing on their investment accounts to meet living expenses – provided they have planned well and allocated according to these plans, a 10% normal drawdown in stocks should not have any material impact beyond the merely psychological.

And for those who’ve been hurt disproportionately due to excessive risk taking, leverage or poorly constructed portfolios, it serves as a perfect wake-up call that they may need to consult a professional on either their plan, their portfolio or, most likely, both.

Namaste.

Soundtrack:

Links:





PhilStockWorld.com Weekly Trading Webinar – 02-07-18

 

PhilStockWorld.com Weekly Trading Webinar – 02-07-18

For LIVE access on Wednesday afternoons, join us at Phil's Stock World – click here

Major Topics:

00:01:47 Checking on the Markets
00:03:35 USD on Active trader
00:05:54 USD Charts
00:10:25 Bonds
00:14:13 Gasoline
00:17:33 RB on Active Trader
00:20:45 Indexes
00:25:21 UNG
00:30:10 Active Trader
00:32:53 NAK
00:37:25 ABX
00:45:38 DIA
00:53:55 SPDR
01:00:19 DIA Trade Ideas
01:08:35 Greencoin
01:16:11 FNSR
01:24:39 AAPL
01:28:39 Active Trader
01:31:19 Watchlist update
01:56:53 CMG
02:03:38 More on Watchlist update

Phil's Weekly Trading Webinars provide a great opportunity to learn what we do at PSW. Subscribe to our YouTube channel and view past webinars, here. For LIVE access to PSW's Weekly Webinars – demonstrating trading strategies in real time – join us at PSW — click here!

 





Three reasons not to worry about the stock market ‘crash’

 

Three reasons not to worry about the stock market 'crash'

Courtesy of Arturo Bris, IMD Business School

We have been talking about this for the last 12 months: when will financial markets realise that the amazing performance of 2017 was not sustainable? When will stock markets adjust? Are we approaching the next big market crash? When will the bubble burst?

Apparently, we now know the answer. A little more than a month into 2018, the Dow Jones industrial average suffered its largest drop by volume in history on February 5. Other markets across the world followed suit. What is even worse, the CBOE VIX index, which tracks market volatility and which was displaying worrisomely low levels, marked its biggest single-day jump of all time (84%). The drill is: the higher the volatility, the lower the stock market performance.

Only one week ago, the financial press was reporting “confidence” and “optimism” at the recent World Economic Forum annual meeting in Davos. Major geopolitical risks remain – it was said – but overall the world economy will display significantly higher growth rates than in the past, possibly dominated by Asia, in general, and China in particular. The scary thing is that the Davos participants reached the same conclusion about the world economy in January 2007.

However, I don’t think that we are today in the same situation we were at the beginning of 2007. There are three reasons why.

1. We’ve been here before

First of all, market adjustments of the magnitude just suffered are not unseen in financial markets. Between 1987 and 2018, the Dow Jones suffered declines of 4% or greater 37 times – that is more than once a year. Even considering the period following the 2007-08 financial crisis, the Dow has declined more than 4% once a year. The Nasdaq index is even more volatile: between 2002 and 2018, it has fallen 4% or more 176 times, or almost ten times a year. And after the financial crisis, the Nasdaq suffered similar such negative returns on 52 occasions.

 

2. No real news

More importantly, we have not had important…
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Tesla Building 250MW “Virtual Solar Power Plant” Using 50,000 Homes In Australia

Courtesy of Zero Hedge

After building the world's largest lithium battery in Australia nearly 40 days ahead of schedule, Tesla has announced plans to build the world's largest "virtual power plant" by outfitting 50,000 homes in South Australia with solar panels and Tesla battery storage units over the next four years, slashing participants' energy bill by 30%.

Beginning with a trial of 1100 Housing Trust properties, a 5kW solar panel system and 13.5kWh Tesla Powerwall 2 battery will be installed at no charge to the household and financed through the sale of electricity.

Following the trial, which has now commenced, systems are set to be installed at a further 24,000 Housing Trust properties, and then a similar deal offered to all South Australian households, with a plan for at least 50,000 households to participate over the next four years. -ourenergyplan.sa.gov.au

Over 6,500 households have already applied for the 250MW program (which will provide the panels for free), tweeted South Australian Premier Jay Weatherill on Monday.

More than 6,500 South Australian households have signed up to register their interest in the world’s biggest Virtual Power Plant.

To sign up and find out more, visit https://t.co/TkdmqBUrG9 pic.twitter.com/eXCnU6Q0i3

— Jay Weatherill (@JayWeatherill) February 4, 2018

The AUD$32 million ($25 million USD) project bankrolled by taxpayers and a state-funded techonlogy grant will be recovered by selling the electricity to customers on the grid. “We will use people’s homes as a way to generate energy for the South Australian grid, with participating households benefiting with significant savings in their energy bills,” says South Australia’s premier Jay Weatherill. “More renewable energy means cheaper power for all South Australians.”

Price predicts utility bills for participating households will be slashed by 30%. The installations will begin with 100 households in a low-income housing community. Those systems should be completed by the end of June. Then another 1,000 systems will be installed in similar properties by the end of the year.

After that, another 24,000 Housing Trust residents will be offered the opportunity to join the program, followed by 25,000 more households over the


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The Best Hedge There Is

 

"A Crash Course on the Rise and Fall of the Hottest Trade" from How Two Tiny Volatility Products Helped Fuel the Sudden Stock Slump ("the definitive article" Josh notes below)

The Best Hedge There Is

Courtesy of 

My friend Tracy Alloway has the definitive article about what went on with the volatility exchange traded products that blew up this week and probably triggered the historic bout of volatility we’re undergoing right now. The fact that these are Frankenstein products, built by maniacs, for use by maniacs, should be stated at the outset.

Here’s a sample quote from the story so you can understand what we’re dealing with:

“If you’re going to play the short-vol game, basically the goal is to just stay alive and avoid any circumstance where things can go up in smoke in minutes.”

Six years ago I sat on an ETF panel discussion for the New York Society of Security Analysts (NYSSA) and one of the creators of these “funds” tried to get cute with me when I explained this in front of the crowd. He was feeling like a big shot because he had just sold his company to a larger fund company and it was apparent in his haughty demeanor on stage. My point was that, yes, traders may find uses for this type of instrument (traders I know would also bet on two fruit flies racing each other to land on a bowl of peaches), but that investors don’t need this stuff and it may even prove to be toxic to the overall markets in certain scenarios.

Welp…

Here’s the deal: There’s a smart way and a stupid way to hedge against risk in a portfolio.

Smart people start out with a simple question – “How much risk do I actually need to take?” The answer to this question can be found in working with a financial planner, calculating what it might cost for your family to achieve all of its goals – both required goals and the stretch-y kind – and then working backwards to arrive at a somewhat optimal portfolio. That way, you


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Phil's Favorites

Seeing Your Blind Spots

 

Seeing Your Blind Spots

Courtesy of 

“The first principle is that you must not fool yourself — and you are the easiest person to fool.”

-Richard Feynman

Anybody who has ever tried to beat the market knows that understanding psychology is just as important as understanding a business. You can know a company’s return on equity to the third decimal and what management likes to do with excess capital, but if you don’t understand prospect theory or confirmation bias, you’re missing the most important elements of what it takes to be a successful investor...



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Zero Hedge

OPEC Pops The Question - Will Russia Say "I Do"?

Courtesy of ZeroHedge. View original post here.

Authored by Herman Wang via Platt's "The Barrel" blog,

OPEC is drafting an agreement to tie Russia into a so-called “super group” of oil producers.

Details on the proposal are vague and the Kremlin’s willingness to consider such a betrothal is uncertain, despite some positive vibes between Russia and OPEC kingpin Saudi Arabia at the moment.

In tryi...



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ValueWalk

Warren Buffett's Advice for Small Business 2018

By joniferdingcong. Originally published at ValueWalk.

The Master Investor gives top tips for budding entrepreneurs, startups, and small businesses.

]]> Get The Full Warren Buffett Series in PDF

Get the entire 10-part series on Warren Buffett in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues

The post Warren Buffett’s Advice for Small Business 2018 appeared first on ValueWalk.

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Chart School

Weekly Market Recap Feb 18, 2017

Courtesy of Blain.

BOO YAH! Now that’s more like it!  Your regularly scheduled non stop up market returned this past week with a “5 for 5” week (all 5 days up).  Three of those days were >1% so it was a return of the bulls.  That said to return to the “Trump market” we need to get back to almost no volatility and incremental up days of 0.3% or so 80% of the time.   We noted in last week’s recap the NYSE McClellan Oscillator was still VERY oversold so a “snapback rally” was still on the docket.  That was quite a snapback rally!  So the “easy part” of the bounce just happened – now we will see if we are going to return to a more volatile future or go right back to the sleepy market that tacks on a little 4 out of 5 ...



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Digital Currencies

As Bitcoin Nears $11,000, Here's A History Of Its Biggest Ups And Downs

Courtesy of ZeroHedge. View original post here.

The cryptocurrency rebound off Feb 5th's bloodbath lows (below $6,000 for Bitcoin) has been impressive, as a 'mysterious' massive buyer 'bought the dip' and momentum took care of the rest.

With Bitcoin now nearing $11,000 (almost a double off the lows), ...



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Insider Scoop

Walmart, Target Are Susquehanna's Top Picks Ahead Of Retail Earnings Season

Courtesy of Benzinga.

Related WMT Upcoming Earnings: Hurricane Effects Still Trickling Through For Home Depot? Did Walmart Meet It...

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Biotech

What is 'right to try,' and could it help?

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

 

What is 'right to try,' and could it help?

In this March 18, 2011 photo, Cassidy Hempel waved at hospital staff as she was being treated for a rare disorder. Her mother Chris, left, fought to gain permission for an experimental drug. AP Photo/Marcio Jose Sanchez

Morten Wendelbo, Texas A&M University and Timothy Callaghan, ...



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Mapping The Market

The tricks propagandists use to beat science

Via Jean-Luc

How propagandist beat science – they did it for the tobacco industry and now it's in favor of the energy companies:

The tricks propagandists use to beat science

The original tobacco strategy involved several lines of attack. One of these was to fund research that supported the industry and then publish only the results that fit the required narrative. “For instance, in 1954 the TIRC distributed a pamphlet entitled ‘A Scientific Perspective on the Cigarette Controversy’ to nearly 200,000 doctors, journalists, and policy-makers, in which they emphasized favorable research and questioned results supporting the contrary view,” say Weatherall and co, who call this approach biased production.

A second approach promoted independent research that happened to support ...



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Members' Corner

An Interview with David Brin

Our guest David Brin is an astrophysicist, technology consultant, and best-selling author who speaks, writes, and advises on a range of topics including national defense, creativity, and space exploration. He is also a well-known and influential futurist (one of four “World's Best Futurists,” according to The Urban Developer), and it is his ideas on the future, specifically the future of civilization, that I hope to learn about here.   

Ilene: David, you base many of your predictions of the future on a theory of historica...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

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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Promotions

NewsWare: Watch Today's Webinar!

 

We have a great guest at today's webinar!

Bill Olsen from NewsWare will be giving us a fun and lively demonstration of the advantages that real-time news provides. NewsWare is a market intelligence tool for news. In today's data driven markets, it is truly beneficial to have a tool that delivers access to the professional sources where you can obtain the facts in real time.

Join our webinar, free, it's open to all. 

Just click here at 1 pm est and join in!

[For more information on NewsWare, click here. For a list of prices: NewsWar...



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Kimble Charting Solutions

Brazil; Waterfall in prices starting? Impact U.S.?

Courtesy of Chris Kimble.

Below looks at the Brazil ETF (EWZ) over the last decade. The rally over the past year has it facing a critical level, from a Power of the Pattern perspective.

CLICK ON CHART TO ENLARGE

EWZ is facing dual resistance at (1), while in a 9-year down trend of lower highs and lower lows. The counter trend rally over the past 17-months has it testing key falling resistance. Did the counter trend reflation rally just end at dual resistance???

If EWZ b...



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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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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.

Market Shadows >>