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Could Non-Citizens Determine the Outcome of the Midterm Elections?

Courtesy of Mish.

Here's the question of the day: Could Non-Citizens Determine the Outcome of the Midterm Elections?

Some elections, especially for Senate are so close, the unfortunate answer is "yes" as the following video insight from Insight from the Libre Institute explains.

Mike "Mish" Shedlock

http://globaleconomicanalysis.blogspot.com


More from Mish Here

 





When one door closes…

Predictions that the US equity market would collapse at the end of QE have so far been wrong (and in a very painful way if you shorted the market based on the Fed's actions alone). The end-of-the-world-QE bears failed to factor in another surprise move by the Bank of Japan. The BOJ announced its own QE program today — it is donating $124Bn ($80 trillion yen) to the market-propping cause. It plans to triple the amount of Japanese ETFs and REITs it buys on the open market.

As  at Business Insider wrote on Oct. 26, If You Missed The Rally, Then You Just Made The Most Classic Mistake In Investing. Since then, the market continues higher…

Screen Shot 2014-10-31 at 1.53.42 PM

When one door closes…

Courtesy of 

“When one door closes, another opens; but we often look so long and so regretfully upon the closed door that we do not see the one which has opened for us.”
– Alexander Graham Bell

The prevailing wisdom on QE in Policy Bear circles has been that the Fed was” trapped” and could never exit QE without sending the US economy into a tailspin.

This week the Fed ended QE and the stock market has exploded to the upside. The one thing the policy bears may not have counted on was that someone else would cover the Fed’s back as it walked away. That someone else is the Bank of Japan, which shocked the markets this morning with an $80 trillion yen QE program that aims to triple the amount of Japanese equity ETFs and REITs it is buying on the open market. In addition, there is continued talk that the ECB will follow the Fed and the BoJ’s lead with a QE program of its own before too long.

I can’t tell you what these programs will do for the economies of these countries or for the wages and spending of their constituent workers. But it’s pretty clear what happens to their stock markets…

Via the Wall Street Journal:…
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The 10 Biggest Energy Company Bankruptcies

The 10 Biggest Energy Company Bankruptcies

Courtesy of Andrew Topf of OilPrice.com

Running a multi-billion dollar energy company isn’t easy. Just ask the executives in the corner suites of some of the energy companies that have gone bust over the years. Some, like Enron, were brought down because of insider malfeasance. A few, like ATP, blamed damaging government policies, while others went off the rails due to market forces that left the company and its shareholders flat-footed, deep in debt, and eventually broke. Here are the bankruptcies that will be etched into the tombstones of failed energy fortunes for time immemorial.

1. Enron. Bankrupt December 2, 2001. Assets $65.5 billion

Enron grew from a simple pipeline company into the world’s largest energy trader by using the Internet to buy and sell natural gas and electric power to help utilities and industrial power users hedge against price fluctuations. By 2000, Enron was worth an astonishing $68 billion, but when the U.S. Securities and Exchange Commission started investigating, it was revealed that much of the money was based on shady accounting practices and un-recorded losses. In one year, Enron’s stock price plummeted from more than $90 to less than $1, resulting in $11 billion in shareholder losses. The subsequent bankruptcy remains the largest in U.S. history. CEO Kenneth Lay and fellow Enron executive Jeffrey Skilling were convicted in 2006 of fraud and conspiracy. Lay died from a heart attack while awaiting sentencing. Skilling is still in prison.

2. Energy Future Holdings. Bankrupt April 29, 2014. Assets $36.4 billion

Energy Future Holdings became the largest power producer in Texas in 2007 after a $45 billion buyout of TXU Corp.  But the company struggled under the weight of $40 billion in debt after revenues plunged due to lower prices for natural gas and electricity. Energy Future Holdings was broken up in April under the terms of a restructuring deal.

3. Pacific Gas & Electric Company. Bankrupt April 6, 2001. Assets $36.1 billion

California’s largest publicly-owned utility went bust after deregulation led the company to incur billions in debt. After selling its gas power plants, the company had to buy power from other energy companies. Buying at fluctuating prices and selling at fixed prices led to losses and eventual…
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The End Of An Era: Is The US Petrodollar Under Threat?

The End Of An Era: Is The US Petrodollar Under Threat?

By Andrew Topf of OilPrice.com

Recent trade deals and high-level cooperation between Russia and China have set off alarm bells in the West as policymakers and oil and gas executives watch the balance of power in global energy markets shift to the East.

The reasons for the cozier relationship between the two giant powers are, of course, rooted in the Ukraine crisis and subsequent Western sanctions against Russia, combined with China's need to secure long-term energy supplies. However, a consequence of closer economic ties between Russia and China could also mean the beginning of the end of dominance for the U.S. dollar, and that could have a profound impact on energy markets.

Reign of the USD

Before the 20th century, the value of money was tied to gold. Banks that lent money were constrained by the amount of their gold reserves. The Bretton Woods Agreement of 1944 established a system of exchange rates that allowed governments to sell their gold to the U.S. Treasury. But in 1971, U.S. President Richard Nixon took the country off the gold standard, which formally ended the linkage between the world's major currencies and gold.

The U.S. dollar then went through a massive devaluation, and oil played a crucial role in propping it back up. Nixon negotiated a deal with Saudi Arabia whereby in exchange for arms and protection, the Saudis would denominate all future sales of oil in U.S. dollars. Other OPEC members agreed to similar deals, ensuring perpetual global demand for greenbacks. The dominance of the U.S. "petrodollar" continues to this day.

Russia and China Cozy Up

Recent news coming out of Russia, however, suggests that the era of U.S. dollar dominance could be coming to an end, due to increasing competition from the world's second largest economy and primary consumer of commodities, China.

China and Russia have been furiously signing energy deals that indicate their mutual energy interests. The most obvious is the $456 billion gas deal that Russian state-owned Gazprom signed with China in May, but that was just the biggest in a string of energy agreements going back to 2009. That year, Russian oil giant Rosneft secured a $25 billion oil swap agreement


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Nikkei Futures Up Limit, Yen Collapses, Dollar Up, Gold Down as BoJ Pledges “Unwavering Determination” to Get 2% Inflation

Courtesy of Mish.

“Whatever it Takes” Japanese Style

It’s a world truly gone mad.

In a surprise move today, the Bank of Japan announced further quantitative easing, dominated by long-term Japanese government bonds. The BoJ also announced it  and would triple annual purchases of exchange traded funds and property investment trusts.

BoJ governor Haruhiko Kuroda defied objections from four fellow board members, arguing that a tax-hit economy and a lower oil price have led to “a critical moment” in the country’s bid to escape from deflation.

The Financial Times quotes Kuroda as follows: The extra action “shows our unwavering determination to end deflation. There was a risk that despite having made steady progress, we could face a delay in eradicating the public’s deflation mindset. This is a pretty drastic step, so I think there will be a significant effect [on the economy].”

Stunning Market Reaction

  • Nikkei futures up lock limit (1160 points)
  • S&P 500 up 1.0% (new all-time high)
  • Yen plunges 2.5%
  • Dollar rises 0.9%
  • Gold sinks 2.75%
  • Oil down 1.1%

Nikkei Futures

S&P 500 Futures

Yen Futures



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The 10th Man: Midterm Elections: Would a Republican Win Be Bullish for the Stock Market?

The 10th Man: Midterm Elections: Would a Republican Win Be Bullish for the Stock Market?

By Jared Dillian

I had an instant-messenger conversation with one of my clients the other day. It was pretty annoying—he wrote things like “BULL MARKET, DUDE,” and harangued me about my net-short positioning.

Then he started telling me that the market was going to rip if the Republicans took both houses of Congress in the midterm elections. At that point, I felt like I needed to intervene.

First of all, just about every single piece of academic research on the subject shows that the stock market (and GDP, and many other metrics) outperforms under Democratic presidents.

You don’t need to look very far for a contemporary example, considering that the stock market has done a three-bagger under our current leader, and the economy has recovered.

Wait, that doesn’t make any sense. The current administration is the least friendly to business and private enterprise in recent history—so why have stocks been in a prolonged bull market?

There are a million reasons why, but let’s focus on the biggest and most obvious one: the Federal Reserve.

Shaping the Fed Board of Governors

Lots of people have opinions on the Fed without really knowing the Fed as an institution or how it works.

There are seven members of the Federal Reserve’s Board of Governors who live and work in Washington, DC. They are presidential appointees, and their term of service is 14 years.

There are 12 regional bank presidents, who are nominated by their respective boards of directors. They are not, theoretically speaking, political appointees. Four of them at a time serve on the FOMC, on a rotational basis. The president of the New York Fed is a permanent member of the FOMC. Their term of service is five years.

In the old days, a Fed governor would serve all 14 years, but now they have to go make money on the speaker circuit, so they serve only three to five years if they are lucky. This means that a two-term president has the opportunity to “pack the court” with Fed governors of similar political affiliation over an eight-year period.

I would argue that the power to shape the…
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How Long Can The Top 10% Households Prop Up The “Recovery”?

Courtesy of Charles Hugh-Smith of OfTwoMinds

The question of "recovery" really boils down to this: how much longer can the top 10% prop up the expansion?

A flurry of recent media stories have addressed housing unaffordability, for example Why Middle-Class Americans Can't Afford to Live in Liberal Cities.
 
The topic of housing unaffordability crosses party lines: Housing Ownership Back to 1995 Levels (U.S. Census Bureau).
 
Other stories reflect an enduring interest in the questions, what is a living wage?  And what is a middle-class income? These questions express the anxiety that naturally arises from the sense that we're sliding downhill in terms of our purchasing power--a reality that is confirmed by this chart:
 

 

Here's a recent story that delves into the question of "getting by" versus "middle class": How Much Money Does the Middle Class Need to Get By?

"Just getting by" in costly coastal cities requires an income in the top 20%: around $60,000 for individuals and $100,000 for households.
 
The article references MIT's Living Wage Calculator, which I found to be unrealistic in terms of the high-cost cities I know well (Honolulu and the San Francisco Bay Area). It appears the calculator data does not represent actual rents or food prices; the general estimates it uses woefully under-represent on-the-ground reality.
 
Current market rents in the S.F. Bay Area far exceed the estimated housing costs in this calculator, and that one line item pushes the living wage from $36,000 for two adults closer to $45,000 in my estimate--roughly the average wage in the U.S. (not the median wage, which is $28,000).
 
If you want to know where you stand income-wise, here is a handy calculator: What Is Your U.S. Income Percentile Ranking?
 
Here are the data sources:
 
Wage Statistics for 2013 (Social Security Administration)
 
2013 Household Income Data Tables (U.S. Census Bureau)
 
There are many complexities in these questions. For example, Social Security data does not include food stamps, housing and healthcare subsidies provided by the government, etc., so lower-income households' real (equivalent) income is much higher than the published data.
 
Then there are the regional differences, which are considerable; $50,000 in a Left


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Charting Banzainomics: What The BOJ’s Shocking Announcement Really Means

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Still confused what the BOJ's shocking move was about, aside from pushing the US stock market to a new record high of course? This should explains it all: as the chart below show, as a result of the BOJ's stated intention to buy 8 trillion to 12 trillion yen ($108 billion) of Japanese government bonds per month it means the BOJ will now soak up all of the 10 trillion yen in new bonds that the Ministry of Finance sells in the market each month.

In other words. The Bank of Japan’s expansion of record stimulus today may see it buy every new bond the government issues.

This is what full monetization looks like.

More from Bloomberg:

The central bank is already the largest single holder of Japan’s bonds, and the scale of its buying could fuel concerns it is underwriting deficits of a nation with the heaviest debt burden. The BOJ could end up owning half of the JGB market by as early as in 2018, according to Takuji Okubo, chief economist at Japan Macro Advisors in Tokyo.

 

“Kuroda knows when to go ALL in,” Okubo wrote in a note. “The BOJ is basically declaring that Japan will need to fix its long-term problems by 2018, or risk becoming a failed nation.

The unprecedented efforts to stoke inflation could scare bond investors, said Chotaro Morita, the chief rates strategist in Tokyo at SMBC Nikko Securities Inc.

Kuroda said earlier this month that while the BOJ holds only about 20 percent of Japan’s outstanding government bonds, the Bank of England holds approximately 40 percent of U.K. government debt.

We wish Japan the best of luck in avoiding becoming a "failed nation."

Then again there is something to be said about a nation which is now desperately, and obviously, trying to unleash hyperinflation… and, for now at least, is failing.





Looking for a Good Education at a Low Price, Perhaps Free? Head to Europe

Courtesy of Mish.

On June 7, 2014 I wrote Looking to Drastically Reduce College Costs? Study Abroad!

Yesterday, a writer for the Washington Post expressed the same opinion.

Please consider 7 countries where Americans can study at universities, in English, for free (or almost free).

Since 1985, U.S. college costs have surged by about 500 percent, and tuition fees keep rising. In Germany, they've done the opposite.

The country's universities have been tuition-free since the beginning of October, when Lower Saxony became the last state to scrap the fees. Tuition rates were always low in Germany, but now the German government fully funds the education of its citizens — and even of foreigners.

What might interest potential university students in the United States is that Germany offers some programs in English — and it's not the only country. Let's take a look at the surprising — and very cheap — alternatives to pricey American college degrees.

Germany

Americans can earn a German undergraduate or graduate degree without speaking a word of German and without having to pay a single dollar of tuition fees: About 900 undergraduate or graduate degrees are offered exclusively in English, with courses ranging from engineering to social sciences.

Finland

This northern European country charges no tuition fees, and it offers a large number of university programs in English. However, the Finnish government amiably reminds interested foreigners that they "are expected to independently cover all everyday living expenses." In other words: Finland will finance your education, but not your afternoon coffee break.

France

There are at least 76 English-language undergraduate programs in France, but many are offered by private universities and are expensive. Many more graduate-level courses, however, are designed for English-speaking students, and one out of every three French doctoral degrees is awarded to a foreign student. "It is no longer needed to be fluent in French to study in France," according to the government agency Campus France.

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Picture from Tpsdave at Pixabay; it's a school in Russia. 





Why Mitochondria Matter

Patrick starts by reviewing what a "broken record" is. (Sadly, I know and you probably do too.) He notes that biotechnology has undergone more enormous changes than the music delivery industry, and that most people do not have a proper appreciation of how big this "biotech transformation" is. Then, he reviews what mitochondria are, how they work and why they are so important to us.

Within all the cells of our bodies, microchondria produce energy - the energy supply needed to run the cells' activities. Without the ability to take nutrients and convert them to energy, via these little cellular machines, we are dead. And that, in brief, is why mitochondria are important. 

Illustration of a Mitochondrion by Kelvinsong, modified by Sowlos, posted on Wikipedia.

?

TransTech Digest: Why Mitochondria Matter

By Patrick Cox

I may sound like a broken record saying this again, but it’s critical that we realize that scientific understanding of the biological world is increasing at an exponential rate. For younger readers, I should explain that the term “broken record” is a reference to a common failure of the old pressed-vinyl audio recording technology. Occasionally, the spiraled groove on a record imprinted with physical representations of sound would be scratched or otherwise damaged. As a result, the needle that transferred analog information to the amplifier would be knocked outward from the groove to play the same section of the recording over and over again.

For those of you who already knew this, it’s useful to realize that the technology of audio recording that was once universal is not just obsolete, most younger people don’t even know what a skipping record is today. The reason that this is such a useful realization is that biotechnology has undergone even bigger changes than the transformation of recorded music from bumps in vinyl grooves to streamed electrons. Most people, however, have no real appreciation of how big the ongoing biotech transformation really is.

New tools let us see deep into the atomically precise world of molecular biology. Just as important is a growing base of biological knowledge that is available to anybody. Though Google Scholar is only 10 years old, I find it hard to imagine a…
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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!

 
 

Zero Hedge

"Who Do You Trust?"

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Ben Hunt of Salient Partners' Epsilon Theory blog,


 

Seek not the favor of the multitude; it is seldom got by honest and lawful means. But seek the testimony of few; and number not voices, but weigh them.
? Immanuel Kant

Have you no sense of decency, sir? At long last, have you left no sense of decency?
? Joseph Welch, counsel for the US Army, confronting Sen. Joseph McCarthy (1954)

Trust Cramer!
– CNBC ad campaign

We are all wrong so often that it amazes me that we can have any c...



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Chart School

S&P 500 Snapshot: Spooky October Ends with a Record Close

Courtesy of Doug Short.

The S&P 500 closed out the historically volatile month of October at an all-time high, up 1.17% for the day, 2.72% for the week and 2.32% for the month. This October had a 8.35% spread between its closing low on the 15th and today's record close.

The yield on the 10-year Note closed at 2.35%, up 3 bps from yesterday's close but down 17 bps from the September close.

Here is a 15-minute chart of the past five sessions.

Here is a monthly chart of the index. The price volatility was accompanied by a surge in volume, 29% above its 10-month moving average.

A Perspective on Drawdowns

How close were we to an "official" correction, generally defined as a 10% drawdown from a high (based on daily closes)? The chart below incorporates a percent-off...



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Phil's Favorites

Could Non-Citizens Determine the Outcome of the Midterm Elections?

Courtesy of Mish.

Here's the question of the day: Could Non-Citizens Determine the Outcome of the Midterm Elections?

Some elections, especially for Senate are so close, the unfortunate answer is "yes" as the following video insight from Insight from the Libre Institute explains.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com


More from Mish Here

 

...

more from Ilene

Market Shadows

When one door closes...

Predictions that the US equity market would collapse at the end of QE have so far been wrong (and in a very painful way if you shorted the market based on the Fed's actions alone). The end-of-the-world-QE bears failed to factor in another surprise move by the Bank of Japan. The BOJ announced its own QE program today -- it is donating $124Bn ($80 trillion yen) to the market-propping cause. It plans to triple the amount of Japanese ETFs and REITs it buys on the open market.

As  at Business Insider wrote on Oct. 26, If You Missed The Rally, Then You Just Made The Most Classic Mistake In Investing. Since then, the market continues higher...

...

more from Paul

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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Sabrient

Sector Detector: Bullish conviction returns, but market likely to consolidate its V-bottom

Courtesy of Sabrient Systems and Gradient Analytics

Bulls showed renewed backbone last week and drew a line in the sand for the bears, buying with gusto into weakness as I suggested they would. After all, this was the buying opportunity they had been waiting for. As if on cue, the start of the World Series launched the rapid market reversal and recovery. However, there is little chance that the rally will go straight up. Volatility is back, and I would look for prices to consolidate at this level before making an attempt to go higher. I still question whether the S&P 500 will ultimately achieve a new high before year end.

In this weekly update, I give my view of the current market environment, offer a technical analysis of the S&P 500 chart, review our weekly fundamentals-based SectorCast rankings of the ten U.S. business sectors, and then o...



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OpTrader

Swing trading portfolio - week of October 27th, 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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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 the latest Stock World Weekly. Enjoy!

(As usual, use your PSW user name and password to sign in. You may also take a free trial.) 

 

#455292918 / gettyimages.com

 

...

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Option Review

LUV Options Active Ahead Of Earnings

There is lots of action in Southwest Airlines Co. November expiry call options today ahead of the air carrier’s third-quarter earnings report prior to the opening bell on Thursday. Among the large block trades initiated throughout the trading session, there appears to be at least one options market participant establishing a call spread in far out of the money options. It looks like the trader purchased a 4,000-lot Nov 37/39 call spread at a net premium of $0.40 apiece. The trade makes money if shares in Southwest rally 9.0% over the current price of $34.32 to exceed the effective breakeven point at $37.40, with maximum potential profits of $1.60 per contract available in the event that shares jump more than 13% to $39.00 by expiration. In September, the stock tou...



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Digital Currencies

Goodbye War On Drugs, Hello Libertarian Utopia. Dominic Frisby's Bitcoin: The Future of Money?

Courtesy of John Rubino.

Now that bitcoin has subsided from speculative bubble to functioning currency (see the price chart below), it’s safe for non-speculators to explore the whole “cryptocurrency” thing. So…is bitcoin or one of its growing list of competitors a useful addition to the average person’s array of bank accounts and credit cards — or is it a replacement for most of those things? And how does one make this transition?

With his usual excellent timing, London-based financial writer/actor/stand-up comic Dominic Frisby has just released Bitcoin: The Future of Money? in which he explains all this in terms most readers will have no tr...



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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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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 >>