Archive for the ‘Appears on main page’ Category

Trade War Tuesday – Trump “Probes” China, A Welcome Distraction

Related image1, 2, 3, 4 – I declare a trade war!  

Those of you who are students of economic history know that nothing is more damaging to an economy than a trade war and those of you who don't know enough history to believe there are "alternate facts" aren't worth trying to convince, so I won't waste time here.  Our President, of course, is not one to let facts get in the way of a rash decision and Trump is proposing special taxes on Chinese imports, starting with aluminum but actually, this is a sneaky way to stop the flow of cheap solar cells into the US to boost Trump's beloved coal industry (and the Koch Brothers).  

It is not unusual for the U.S. to punish businesses it deems to be “cheating” on global trade rules, and one should not be too quick to judge any specific punitive measure taken. But the fear is that we are now on a slippery slope toward a trade war, as China is certain to respond by taxing U.S. sales of goods in China.

All of this trade talk ignores the basic fact that China is our factory floor, the way the midwestern cities once were in the mid-20th century.  They were dirty and polluted and the kind of jobs people had were not the kind of jobs people actually wanted, which is why the people in the Northeast were thrilled to export those jobs and the pollution out west.  As the US developed and as World Trade became more efficient, we exported the jobs and factories all the way to Asia and China became the new Japan (who were our factory in the 70s) and now China is pushing those jobs and factories to Africa because, in the end – NOBODY ACTUALLY WANTS THEM!

Image result for iphone assembly lineAssembling IPhones is not a dream job but those are on the high end of of what we have exported overseas.  I'm going to focus on the IPhone so I can explain to you what an idiot our President is, without making it too complex.  

 Though the IPhone is an American product, it's assembled in China and those
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Intel CEO Resigns From Trump Manufacturing Council Over “Divided Political Climate”

Courtesy of Zero Hedge

The CEOs on President Trump's Manufacturing Council are dropping like flies as they realize, one by one, this weekend's media mayhem surrounding Trump's comments about the chaos in Charlotteville is the perfect excuse to detach from the Trump bandwagon.

[It's a good reason. Thank you, Ken Frazier, Kevin Plank and Bryan Krzanich.]

Following Merck's Ken Frazier and Under Armour's Kevin Plank, Intel CEO Bryan Krzanich chose to resign his position by announcing it quietly on a blog post at 2230ET explaining that he is departing the manufacturing council in order to bring attention to the demise of US manufacturing…

In a blog post, Krzanich said that the decline in American manufacturing remains a serious issue, but said that "politics and political agendas have sidelined the important mission of rebuilding America's manufacturing base."

 "I resigned to call attention to the serious harm our divided political climate is causing to critical issues, including the serious need to address the decline of American manufacturing," Krzanich said in a blog post.

"Politics and political agendas have sidelined the important mission of rebuilding America's manufacturing base."

Here is Krzanich's full statement:

Earlier today, I tendered my resignation from the American Manufacturing Council. I resigned to call attention to the serious harm our divided political climate is causing to critical issues, including the serious need to address the decline of American manufacturing. Politics and political agendas have sidelined the important mission of rebuilding America's manufacturing base.

I have already made clear my abhorrence at the recent hate-spawned violence in Charlottesville, and earlier today I called on all leaders to condemn the white supremacists and their ilk who marched and committed violence. I resigned because I want to make progress, while many in Washington seem more concerned with attacking anyone who disagrees with them. We should honor – not attack – those who have stood up for equality and other cherished American values. I hope this will change, and I remain willing to serve when it does.

I am not a politician.

I am an engineer who has spent most of his career working in factories that manufacture the world's most advanced devices. Yet, it is clear

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This is why Donald Trump can’t be human


This is why Donald Trump can't be human

From Double Down News

Donald Trump’s not human and planet earth’s DOOMED!! George Monbiot offers hope, but only a little and you have to wait till the end


Monday Morning Market Movement – More of the Same

If it's Monday, the Futures must be higher.

It's very easy to get the markets going in thin weekend trading and usually we peak out of Meaningless Mondays or Testy Tuesdays and then we resume our normal shorting activities.  Last Tuesday, we called for shorting the S&P Futures (/ES) at the 2,480 line and we caught a ride down to 2,435 for 45 points at $50 per point per contact – a profit of $2,250 per contract (you're welcome) and that was a very poor 2nd to our Russell Futures short (/TF), which fell from 1,430 all the way to 1,370, which was good for a profit of $6,000 per contract.

It's really not hard to follow these trades, we laid out the levels and the details in Tuesday Morning's PSW Report and delivered it to the inbox of our subscribers by 8:35 on Tuesday morning, an hour before the market opened and that day's $3 investment in our newletter was paid back 2,000 times on the Russell alone.  Subscribe here if you'd like to catch the next 2,000x winner!  

Rembember – I can only tell you what the market is likely to do and how to make money playing it, that is the extent of my powers – the rest is up to you…

We also put up an options spread on SPY for those who aren't able to trade the Futures (though it's really not hard, we teach Futures trading to our Members in our Live Weekly Webinars) and that trade was:

We've been talking about hedges and a good way to hedge the S&P, other than simply shorting /ESFutures with tight stops above, is a bear put spread on SPY options, which we can accomplish with the following:

  • Buy 20 SPY Sept $247 puts for $2.50 ($5,000) 

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An unlikely analogy: the emboldening of white supremacists and the 10-Year Treasury bond yield. I only wish I could feel as hopeful as Joshua Brown that this new era of hate is a counter-trend and not a new trend.  


Courtesy of 

Yesterday, thirty people were injured and three killed at a white supremacist demonstration in Charlottesville, Virginia.

Neo-Nazis, far-right militias, the Ku Klux Klan and other hate groups, emboldened by the Presidency that they believe they helped to bring about, are now marching out in the open – no hoods, no masks, no shame.

Just three generations ago, American boys and girls went off to war and died in the hundreds of thousands to defeat these evil ideologies. Fascism is at odds with liberty and freedom. We all agreed on this as a society once upon a time. As descendants of these World War II heroes, we now find ourselves, a scant seven decades later, re-fighting this war – on the streets of our towns, on the internet and, yes, in the halls of government.

On Wall Street, we have a term called trend. It’s a description of the direction a particular stock, bond, index or asset class is headed. An up-trend implies a price that is moving higher. A downtrend is a price that is clearly headed lower. The thing is, powerful trends that last a long time are prone to short periods of time during which they appear to reverse themselves.

We call these counter-trends.

Counter-trends confuse people. They trick us into thinking that the prevailing trend itself has changed. In the chart below, you’ll see the yield on the 10-Year Treasury bond, which has been falling since the middle of 1981 or in a defined trend lower. But it hasn’t all been one smooth ride down. You can see several examples of counter-trends (red arrows) within the larger trend.

Counter-trends will do that. They’ll take us by surprise and shock the people who had grown accustomed to an established, prevailing trend.They call this relentless drop in interest rates “the great moderation.” It’s easy to see how obvious this trend is, but only with the benefit of hindsight. For investors in 1994, watching the counter-trend rally in interest rates,…
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If You Own Stocks You’re a Value (and Growth) Investor


If You Own Stocks You’re a Value (and Growth) Investor

Courtesy of Cullen Roche, Pragmatic Capitalism 

I have a general theory about how good business operators think about their businesses:

“All business owners think their business is a value and growth business.”

What I mean by this is that entrepreneurs and good business owners pretty much always believe their business is selling below its intrinstic value and will provide growth in the future. I’ve run a number of businesses throughout my life and I never once said to myself “I will start a business that will only provide value and not growth!”. That’s just not how entrepreneurs and business operators think. They almost always think their business will grow and that other people undervalue that growth.

The point I am making is a relatively simple one – when someone starts a business they generally think they’re capturing an opportunity that the market has not valued properly. But this mentality does not really change as the business matures. In fact, if you look at stock buybacks you’ll notice that even very mature companies consistently believe their businesses are undervalued (sometimes even when they’re on the verge of collapse). This isn’t naive or necessarily stupid. It is the way it should be. A good business operator should always believe that their business is going to provide much more value and growth in the future than most people expect. So, I would argue that running a business is perfectly synonymous with value and growth investing.

I was thinking about this as I read this article about how “value” investing has failed over time. You probably know the story by now. This group of stocks that we call “value” has underperformed “growth” and the broader market:

But let’s think this through logically. If you understand what I’ve described above then it makes zero sense to describe some companies as “value” while others are just “growth”.¹ After all, a mature company whose highest growth has probably passed them by does not simply stop trying to grow at all. And they don’t automatically become a good “value” just because…
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What the Google gender ‘manifesto’ really says about Silicon Valley

Science fails to support the notion that biological differences cause less women to go into tech fields. But framing the controversial Google memo as being a quasi-scientific exploration into gender differences misses the real issue: sexism in the workplace. 

What the Google gender 'manifesto' really says about Silicon Valley

Courtesy of Marie HicksUniversity of Wisconsin-Madison

File 20170809 32154 xnrsxk

Oh the terrible irony. Photo by Mar Hicks

Five years ago, Silicon Valley was rocked by a wave of “brogrammer” bad behavior, when overfunded, highly entitled, mostly white and male startup founders did things that were juvenile, out of line and just plain stupid. Most of these activities – such as putting pornography into PowerPoint slides – revolved around the explicit or implied devaluation and harassment of women and the assumption that heterosexual men’s privilege could or should define the workplace. The recent “memo” scandal out of Google shows how far we have yet to go.

It may be that more established and successful companies don’t make job applicants deal with “bikini shots” and “gangbang interviews.” But even the tech giants foster an environment where heteronormativity and male privilege is so rampant that an engineer could feel comfortable writing and distributing a screed that effectively harassed all of his women co-workers en masse.

This is a pity, because tech companies say they want to change this culture. This summer, I gave a talk at Google UK about my work as a historian of technology and gender. I thought my talk might help change people’s minds about women in computing, and might even help women and nonbinary folks working at Google now. Still, the irony was strong: I was visiting a multibillion-dollar tech company to talk about how women are undervalued in tech, for free.

Facing common fears

I went to Google UK with significant trepidation. I was going to talk about the subject of my upcoming book, “Programmed Inequality,” about how women got pushed out of computing in the U.K. In the 1940s through the early 1960s, most British computer workers were women, but over the course of…
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Irrelevant Investor’s (Final) Thoughts on the CAPE Ratio


Courtesy of 

Meb Faber recently asked three very interesting questions on Twitter.

  1. Do you currently own U.S. stocks? 87% Yes, 13% No (1,401 votes)
  2. Would you continue to hold U.S. stocks if valuations hit a 10-year PE (CAPE) of 50? 55% Yes, 45% No (1,282 votes)
  3. Would you continue to hold U.S. stocks if valuations hit a 10-year PE (CAPE) of 100? 33% Yes 67% No (2,078 votes)

I voted no for the CAPE 100, and since then I’ve been thinking a lot about this. How far would stocks have to rise to wear such a multiple? I have answers. But first, a little history.

The modern poster child for bubbles is Japan. From 1975-1989, the Nikkei rose 883%, or 16.5% a year.  In that 15 year period, it had just one down year in 1977, when it fell 2.5%. It went from a CAPE of 20 in 1981 to a CAPE of 94.3 in 1989.

What if an investor decided to detach from the herd once the CAPE ratio hit 50? At that point, the Nikkei had already delivered 263% over the previous ten years, or 13.8% a year. Not too bad. But once the CAPE ratio broke 50 in 1986, it wouldn’t peak for another 45 months, and it would add another 145%. Could the person who sold at CAPE 50 really sit on their hands for another 4 years as the mania sucked everyone else in?

The chart below shows how much stocks gained at different CAPE levels. So for instance, it took 19 months for the CAPE to go from 4o to 59, and over that time Japanese stocks gained 53%.


Today we find ourselves in a situation with an elevated CAPE ratio, which, if you’re tired of hearing about, I have bad news, this topic probably isn’t going away. More on this later.

How did we get here? I don’t know the why, but the how is that the numerator rose a lot faster than the denominator.

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Frail Friday – Living on a Prayer

"Whooah, we're half way there

Livin' on a prayer

Take my hand and we'll make it, I swear

Livin' on a prayer"

Well that prediction didn't take long to play out!  

In yesterday's report, we said it was time for a 500-point Dow drop and we got the first 200 yesterday and, as you can see from the Fear and Greed Index, the needle has moved from 59 to 31 already – halfway to EXTREME FEAR, where the sheeple start trying to sell stocks for any price and, in a thin market like this one – that can get pretty catastrophic.  

Our long-term postions lost almost $100,000 yesterday (from $1.6M) but our short-term hedges gained $80,000, which means we essentially, automatically, begain cashing out as the market dipped.  Of course, the real money comes when the market kicks in 5% or better and we're not counting on that happening in this gogo market – which is why we're not getting out of our long-term positions – yet. 

We're also not adding to our long-term positions – yet – it's just too hard to say which way things will go but a nice correction is healthy and we're playing for a bounce this morning, using Dow 21,800 as our long like (/YM) as the Russell (/TF) bounces right off it's 200-day moving average at 1,370, which is also a good line to play long, with tight stops below.

Using our shorting line on the Dow Futures yesterday was good for gains of $1,000 per contact and hopefully we can re-enter the shorts as the strong bounce fails at 21,880 but, meanwhile, that's good for $400 per contract gains on the way up.  Aren't futures fun?  As we expected, silver and gold continued to blast higher as well, which is great for the trade ideas we discussed on Barrick Gold (ABX) and Wheaton Precious Metals (WPM).  

Image result for warren buffett greedy fearfulBeing well-hedged with a good BALANCE of
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Why crowds aren’t always wise: Lessons from mini-flash crashes on Wall Street


Why crowds aren’t always wise: Lessons from mini-flash crashes on Wall Street

Courtesy of Alexander Munk, University of Michigan and Erhan Bayraktar, University of Michigan

Blink. About 300 milliseconds just passed, the same time required for a lightning bolt to travel 100,000 feet, a satellite to fly two miles or a stock price to swing from US$10 to $0.0001 and back.

Wait, what?

Indeed, that actually happened to the shares of the software company Qualys a few years ago. Similar mini-flash crashes involving substantial, instantaneous price moves take place about 12 times a day.

Remember the flash crash back in 2010, when hundreds of stocks temporarily went bonkers and the Dow Jones Industrial Average dove 1,000 points in a few minutes? Mini-flash crashes are the same thing yet on a smaller scale, with perhaps only one company’s shares going haywire for a fraction of a second.

But they’re just as consequential, both for the individual stock and in the aggregate. Such bizarre events seem to contradict our basic beliefs about the fairness of values, the sophistication of modern markets and the oft-cited wisdom of the crowd. What’s going on?

To find out, we developed a mathematical model to explore how all of these ideas fit together. We initially presumed that as long as there were lots of sharp investors with broad-ranging market views, mini-flash crashes would be fairly uncommon.

Surprisingly, we observed a “too many cooks spoil the broth”-type effect instead. Even the wisest crowd, if it’s large enough, can rapidly devolve into a mad herd and bring on these wild events.

Mini-flash crashes in a nutshell

Over 20,000 mini-flash crashes have been recorded since 2006, the year they really took off. Some were bigger than others, but many were pretty severe.

They’re momentary, but if you get caught in one, you might incur substantial trading losses, reputational damage, fines and legal woes.

More broadly, they may erode investors’ trust in markets, violate Nobel Prize-winning theories and even escalate into full-blown
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Phil's Favorites

Solar Eclipse is Big Business for Illinois

Courtesy of Mish.

People from worldwide are converging on Southern Illinois on Monday to witness a total eclipse of the sun. I will be among that crowd.

We booked our hotel late, as in a couple months ago. The closest, in fact, the only room we could find was at a Best Western in Paducah, Kentucky, for nearly $400 a night.

Every hotel in Southern Illinois was booked solid. Carbondale, Illinois, home of Southern Illinois University is one of the big beneficiaries.

The Wall Street Journal reports Carbondale Plans to Make Hay While Sun Doesn ...

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Chart School

Weekly Market Recap Aug 20, 2017

Courtesy of Blain.

The story of 2017 has been “lack of volatility”.  There is finally some volatility entering the market, which is nice for those out there who like to actually trade a bit rather than buy and hold.  In last week’s recaps we noted the NYSE McClellan Indicator had registered an extreme oversold reading so a “rubber band” type of snap back rally could happen.

Thursday it hit an extreme level over -80 which we don’t see very often which can lead to short term snap back rallies.  But until we get back to sustained levels over zero caution remains in order.

So that “snap back” rally happened Monday – credit given to “an ebb in pressure between North Korea and the U.S. but the real headline should have been “the market was overs...

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Bungled repairs and new concerns at the tallest US dam

By PeakProsperity. Originally published at ValueWalk.

Remember the crisis earlier this year at the Oroville Dam?

The overflow from California’s winter of heavy rain threatened to overpower our country’s tallest dam. A cascading failure of the dam’s main gates, its primarily spillway AND its emergency spillway had the world watching hour by hour to see if a catastrophic breach was going to occur.

Oroville Dam By California Department of Water Resources [Public domain], via Wikimedia CommonsFortunately, the rains stopped long enough for the situation to be brought under control. The dam remains in place and repair crews have been working all spring and summer....

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Zero Hedge

Bannon: "No Administration In History Has Been So Divided"

Courtesy of ZeroHedge. View original post here.

"Bannon the Barbarian" has been spending a lot of time talking to reporters since being fired by President Donald Trump on Friday. During an interview with Bloomberg, his first after being relieved of his duties as Trump’s chief strategist and returning to his former leadership role at Breitbart, Bannon claimed that he was going “to war” for Trump, and that he would marshal the resources of Breitbart, the Government A...

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Insider Scoop

Things To Like, Things To Watch At The Gap

Courtesy of Benzinga.

Related GPS 20 Stocks Moving In Friday's Pre-Market Session A Peek Into The Markets: U.S. Stock Futures Edge Higher Ahead Of Consumer Sentiment Repor... more from Insider

Digital Currencies

Ukrainian Lawmakers Disclose $45 Million In Bitcoin Holdings

Courtesy of ZeroHedge. View original post here.

As Ukraine's crackdown on corruption continues, three lawmakers from Ukraine’s ruling party revealed this week that they own a combined $45 million in bitcoin, according to a report by RIA Novosti, a Russian foreign news service.

Their holdings came to light during mandatory financial disclosures by members of the Ukrainian parliament, part of an IMF-approved strategy to tamp down corruption in Ukraine. The country's democratic institutions, which were never very robust to begin with, have been further destabilized by...

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Swing trading portfolio - week of August 14th, 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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Editing human embryos with CRISPR is moving ahead - now's the time to work out the ethics

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

Editing human embryos with CRISPR is moving ahead – now's the time to work out the ethics

Courtesy of Jessica BergCase Western Reserve University

There’s still a way to go from editing single-cell embryos to a full-term ‘designer baby.’ ZEISS Microscopy, CC BY-SA

The announcement by researchers in Portland, Oregon that they’ve successfully modified the genetic m...

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Members' Corner

Why we need to act on climate change now


Why we need to act on climate change now

Interview with Jan Dash PhD, by Ilene Carrie, Editor at Phil’s Stock World

Jan Dash PhD is a physicist, an expert at quantitative finance and risk management, and a consultant at Bloomberg LP. In his thought-provoking book, Quantitative Finance and Risk Management, A Physicist's Approach, Jan devotes a chapter to climate change and its long-term systemic risk. In this article, Ilene interviews Jan regarding his thoughts on climate change and the way it can affect our futu...

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Mapping The Market

The App Economy Will Be Worth $6 Trillion in Five Years

Courtesy of Jean-Luc

This would be excellent news for AAPL and GOOG to a lesser extent although not inconsequential:

The App Economy Will Be Worth $6 Trillion in Five Years 

In five years, the app economy will be worth $6.3 trillion, up from $1.3 trillion last year, according to a report released today by app measurement company App Annie. What explains the growth? More people are spending more time and -- crucially -- more money in apps. While on average people aren't downloading many more apps, App Annie expects global app usership to nearly double to 6.3 billion people in the next five years while the time spent in apps will more than double. And, it expects the...

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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.


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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FeedTheBull - Top Stock market and Finance Sites

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...

Learn more About Phil >>

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About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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