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Financial Markets and Economy

Zambia Seeks to Restore Confidence With Budget Amid Power Crisis (Bloomberg)

Zambian Finance Minister Alexander Chikwanda is seeking to restore confidence in the economy to help reverse the world’s worst currency, record borrowing costs and sliding growth. The two things that matter the most to the outlook are the copper price and power supply, which he has little control over. 

Migrants walk to the Austrian border in Nickelsdorf from Hegyeshalom, Hungary, in this September 26, 2015 file photo. REUTERS/Leonhard Foeger/FilesThe World Bank is betting on mass migration driving the global economy (Business Insider)

The impact of mass migration has hit headlines around the world in recent months, but according to the World Bank, the benefits of large-scale immigration could drive forward the global economy in the coming decades.

In a major new report — released to coincide with the start of the World Bank and International Monetary Fund's annual meetings, this year taking place in Lima, Peru — the bank argues that the current mass migration happening throughout the world can be a major driver for the global economy in years to come.

Saudi prince now owns 5% of Twitter (CNN)

Saudi billionaire Prince Alwaleed Bin Talal has given Twitter a big vote of confidence just months after suggesting CEO Jack Dorsey should step aside.

Alwaleed has increased its stake in Twitter over the last six weeks to 5.17%, making him the second biggest shareholder after former CEO and co-founder Evan Williams.

VW Scandal's Boost for Palladium Seen Sustained, Top Miner Says (Bloomberg)

The boost for palladium prices from a scandal at Volkswagen AG over car pollution tests will probably be sustained as the metal’s biggest monthly jump in two years brings it into line with supply and demand, according to GMK Norilsk Nickel PJSC, the top producer.

shark weird houseBritain's regulator is investigating whether banks signed off mortgages that risk crashing the market (Business Insider)

The Financial Conduct Authority launched a big review into the British banking sector to make sure

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News You Can Use From Phil’s Stock World


Financial Markets and Economy

Volkswagen shares are popping on its disaster-recovery plan (Business Insider)

Volkswagen shares are popping in Frankfurt on Wednesday morning after the troubled carmaker spelled out how it was going to recover from the emissions-rigging scandal that has engulfed the company.


S&P 500 under 1,800? That’s better news than you think (Market Watch)

All’s well when oil’s well, right? That may be the strategy in the early going for this stock market, which is looking cheery, despite the fact the S&P 500 got its winning streak derailed last night.

But soon enough, earnings will be in your face, possibly batting this market around. Tim Knight, blogging for Slope of Hope, is purveying a little doom. He says as investors “head into another earnings season, the bulls better pray to whatever pagan gods they worship that company after company magically defy the downturn that the economy is quite obviously entering.”

Charting the Markets: Day Six of the Global Stock Rally (Bloomberg)

The yen rises, crude oil extends its winning run andSABMiller sharesrise on AB InBev Bid.

Samsung shares just exploded to their best day in six years after strong Q3 sales (Business Insider)

Samsung had an awesome day in Korea's stock market, after announcing bumper results for Q3.

005930___Samsung_Electronics_Co_Seoul_Stock_ _Investing_com

The Dow Theory suggests stocks are about to tank, but it’s wrong (Market Watch)

Here’s my definition of technical analysis (TA), the dubious belief that squiggly lines on a chart will predict price moves. While some signals work sometimes, generally TA is just cartoons for investors who can’t be bothered with fundamental analysis.

Like most cartoons, technical analysis is entertaining but not much help.

“Dow Theory,” a trusty old gauge for technicians, offers a great example right now.

Glencore Bears Dust Off Forgotten Credit Swaps for Cheap Short (Bloomberg)

As the investing world rushed last week to sell anything related to Glencore Plc, traders in the credit market turned to

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    Actually, I'm on now. 

Why the Washington Post’s Attack on Bernie Sanders is Bunk


Why the Washington Post’s Attack on Bernie Sanders is Bunk

Courtesy of Robert Reich

The Washington Post just ran an attack on Bernie Sanders that distorts not only what he’s saying and seeking but also the basic choices that lie before the nation.  Sanders, writes the Post’s David Fahrenthold, “is not just a big-spending liberal. And his agenda is not just about money. It’s also about control.”

Fahrenthold claims Sanders’s plan for paying for college with a tax on Wall Street trades would mean “colleges would run by government rules.” 

Apparently Fahrenthold is unaware that three-quarters of college students today attend public universities financed largely by state governments. And even those who attend elite private universities benefit from federal tax subsidies flowing to wealthy donors. (Meg Whitman’s recent $30 million donation to Princeton, for example, is really $20 million from her plus an estimated $10 million she deducted from her taxable income.) Notwithstanding all this government largesse, colleges aren’t “run by government rules.”

The real problem is too many young people still can’t afford a college education. The move toward free public higher education that began in the 1950s with the G.I. Bill and was extended in the 1960s by leading public universities was reversed starting in the 1980s because of shrinking state budgets. Tuition has skyrocketed in recent years as states slashed education spending. It’s time to resurrect that earlier goal.

Besides, the biggest threats to academic freedom these days aren’t coming from government. They’re coming as conditions attached to funding from billionaires and big corporations that’s increasing as public funding drops. 

When the Charles Koch Foundation pledged $1.5 million to Florida State University’s economics department, for example, itstipulated that a Koch-appointed advisory committee would select professors and undertake annual evaluations.  The Koch brothers now fund 350 programs at over 250 colleges and universities across America. You can bet that funding doesn’t underwrite research on inequality and environmental justice.

Fahrenthold similarly claims Sanders’s plan for a single-payer system would put healthcare under the “control” of government. 

But health care is already largely financed through government subsidies – only they’re flowing to private for-profit health insurers that are now busily consolidating into corporate laviathans. Anthem purchase of giant insurer Cigna will make it the largest health insurer in America;

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    Any opinion on bluebird bio, Inc. (BLUE) and Clovis Oncology, Inc. (CLVS)


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    Good morning!

    We've had a great rally since Asia opened and Hong Kong blasted 3% higher, led by energy and commodity companies.  We didn't take into account that the 5% rally in oil came AFTER they closed yesterday – so big catch-up there and, of course, Shanghai is still closed (back tomorrow).  

    Also, Samsung had a huge number based on what, exactly, it's hard to say.  Seems like chip sales and screen sales were good business but also massive currency devaluation helped a lot.  Still, we're the only people who look under the hood so massive tech rally in Asia for the moment. 

    Samsung Expects A Strong Third-Quarter Thanks To Chip And Display Sales

    5 Takeaways From Samsung’s Guidance – WSJ

    Obviously, the most important chart of the day is:

    If DAX holds 10,000 into the close, we have to give all the markets the benefit of the doubt.  

    S&P 2,000 is still almost 1% away (in addition to the up 0.66% we have this morning):

    Essentially, this is just a repeat of yesterday, which means the same shorting lines should work on the Futures (very tight stops over, short the laggard after 2 cross and get out if any cross back over!): 16,750, 1,980, 4,325 and 1,135.  

    Oil, of course, is a short below $49.50 or $50 or $49.  

    That's another big market booster, RDS/A and others have been pumping up their oil forecasts and pushing that Russia/OPEC alliance rumor for all it's worth (and it's worth $50, so far!):

    Shell boss sees signs of oil price recovery but warns of ‘spike’

    Why oil is picking up (and why it matters for stocks) – fastFT: Market-moving news and views, 24 hours a day

    And, of course – please completely ignore these:

    German Industry Output Unexpectedly Falls as China Weakens

    IMF Cuts Global Growth For The Fourth Time In 12 Months… But That’s Not The Biggest Problem

    In short, after selling off from yesterday's low-volume, pre-market spike up, we're having another low-volume, pre-market spike up this morning.  









News You Can Use From Phil’s Stock World


Financial Markets and Economy

Here’s how Apple, Nike and others avoided $620 billion in taxes (Market Watch)

Big U.S. companies are holding more than $2.1 trillion in profits overseas and are avoiding paying about $620 billion in U.S. taxes, according to a study released Tuesday.

The study by liberal groups Citizens for Tax Justice and the U.S. PIRG Education Fund found that nearly three-quarters of Fortune 500 companies had at least one tax-haven subsidiary in 2014. Bermuda and the Cayman Islands were the most popular tax-haven destinations.

SunEdison's Plan to Cut Costs May Not Be Enough, Analyst Says (Bloomberg)

SunEdison Inc. Chief Executive Officer Ahmad Chatila has some explaining to do, after announcing plans to fire 15 percent of his workforce. It’s his latest move to reverse anindustry-worst 70 percent slump in market value over three months.

This chart shows that the stock market could get banged up a lot more and it'd be totally normal (Business Insider)

On August 20, the S&P 500 snapped its streak of 211 sessions without a 5% pullback. This was the longest such streak since March 31, 2003 to February 11, 2004, when the benchmark index went 219 days without a 5% drop. 

5% pullbacks

Cracks emerge in U.S. oil boom (CNN)

The American energy boom is finally showing some cracks from the crash in oil prices.

U.S. oil production decreased by 120,000 barrels per day in September from August, according to a report released by the Energy Information Administration on Tuesday.

Exelon Strikes Pact With D.C. Mayor in $6.8 Billion Pepco Deal (Bloomberg)

Exelon Corp. reached a settlement Tuesday with Washington’s mayor on its $6.8 billion proposal to buy utility Pepco Holdings Inc., bringing it closer to a deal that has been in the works for more than a year.

A pricey valuation is no sign of a dying bull market (Business Insider)

Most investors consider the stock market's valuation before making their decisions to buy or sell.

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    Sorry, no posting today but my daughter had some surgery done on one knee and had to spend the entire day at the hospital with her! Doesn't look like I missed much…

What Oil Does to Profit Margins


What Oil Does to Profit Margins

Courtesy of Joshua M. Brown

Paradoxically, or at least counterintuitively, it turns out that falling oil prices are a net negative for corporate profit margins. This despite the fact that energy is an input cost for making and moving stuff around in the economy. A rational person would guess that a lower energy cost is an overall positive for corporate profit margins, but it actually doesn’t end up working that way.

In stock market terms, the benefits of a lower oil / gas prices do not boost profit margins enough to offset the drag on margins coming from the energy sector, which is something like 8% of the S&P 500’s market cap weighing right now (down from 12%).

Here’s Liz Ann Sonders, Chief Strategist at Charles Schwab, on the right way to think about corporate profit margins – which, net of energy companies, are still sitting at all-time record highs:

Profit margins under pressure

From an all-time high of over 9% reach in 2014, S&P 500 profit margins have dropped by 60 basis points over the past year and now sit at 8.5%. Declines of this magnitude are rare outside of recessions, other than in 1985, which was the only time in the past 40 years margins dropped this much without an attendant recession according to Barclays. It’s an important reference point because profit margins fell in 1985 due to a 60% plunge in oil prices; while profit margins outside of the energy sector remained stable.

Over the two years, energy sector net profit margins have imploded from over 8% and are now on their way toward 2%. On the other hand, the collective revenue-weighted net profit margin of the other nine S&P sectors has continued to trend marginally higher and sits near an all-time high, which means earnings pressure will also be mostly felt within the energy sector.

More from Liz Ann on the possibilities of an earnings recession in her latest commentary below:

Under Pressure: Earnings Recession Warning; Economic Recession Watch (Charles Schwab)

Picture via Pixabay.

Marathon Market Gets a Cramp


Marathon Market Gets a Cramp

Courtesy of Wade of Investing Caffeine

ganador maraton-02c

This article is an excerpt from a previously released Sidoxia Capital Management complementary newsletter (October 1, 2015). Subscribe on the right side of the page for the complete text.

“Anyone can run a hundred meters, it’s the next forty-two thousand and two hundred that count.”

Investing is a lot like running a marathon…but it’s not a sprint to the retirement finish line. The satisfaction of achieving your long-term goal can be quite rewarding, but attaining ambitious objectives does not happen overnight. Along the hilly and winding course, there can be plenty of bumps and bruises mixed in with the elation of a runner’s high. While stocks have been running at a record pace in recent years, prices have cramped up recently as evidenced by the -2.6% decline of the S&P 500 stock index last month.

But the recent correction should be placed in the proper perspective as you approach and reach retirement. Since the end of the 2008 Financial Crisis the stock market has been racing ahead at a brisk rate, as you can see from the total return performance below (excluding 2015):

2009 - 2015 SP Performance


Long Term SP500 1925-2015

This performance is more indicative of a triumph than a catastrophe, but if you turned on the TV, listened to the radio, or surfed the web, you may come to a more frightening conclusion.

What’s behind the recent dip? These are some of the key concerns driving the recent price volatility:

  • China: Slowing growth in China and collapse in Chinese stock market. China is suffering from a self-induced slowdown designed to mitigate corruption, prick the real estate bubble, and shift its export-driven economy to a more consumer-driven economy. These steps diminish short-term growth (albeit faster than U.S. growth), but nevertheless the measures should be constructive for longer-term growth.
  • Interest Rates: Uncertainty surrounding the timing of a 0.25% target interest rate increase by the Federal Reserve. The move from 0% to 0.25% is like walking from the hardwood floor onto the rug…hardly noticeable. The inevitable move by the Fed has been widely communicated for months, and given where interest rates are today, the move will

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Phil's Favorites

Bernanke's Balderdash


Bernanke’s Balderdash

Courtesy of David Stockman

The US and world economies are drifting inexorably into the next recession owing to the deflationary collapse of commodities, capital spending and world trade. These are the inevitable “morning after” consequence of the 20-year global credit binge which has now reached its apogee.

The apparent global boom during that period was actually a central bank driven excursion into the false economics of household borrowing to inflate consumption in the DM economies; and frenzied, uneconomic investing to inflate GDP in China and the EM.

The common denominator was falsification of financial prices. By destroying honest price discovery...

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Market News

News You Can Use From Phil's Stock World


Financial Markets and Economy

Bond Funds Have Been Borrowing to Boost Returns (Bloomberg)

For more than two decade, Bill Gross did the seemingly impossible, according to Bill Gross.

Drug that rose 5,000% hasn't come down in price (CNN)

Remember the drug used by cancer and AIDS patients that skyrocketed from $13.50 to $750 a pill? Well, the price has yet to come back to earth.

The company still has not cut the price below $750 even thoug...

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Zero Hedge

The Deep State: Source Of All Negativity

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Doug Casey via,

I’d like to address some aspects of the Greater Depression in this essay.

I’m here to tell you that the inevitable became reality in 2008. We’ve had an interlude over the last few years financed by trillions of new currency units.

However, the economic clock on the wall is reading the same time as it was in 2007, and the Black Horsemen of your worst financial nightmares are about to again crash through the doors and end the party. And this time, they won’t be riding children’s ponies, but armored Percherons.


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Kimble Charting Solutions

Free Premium Trail Offer & Free Webinar Viewing Available Now!

Courtesy of Chris Kimble.


Ryan Detrick and I produced a webinar this week, covering some new indicators we created, which we shared publicly for the first time.

We also shared two new Buy & Hold indicators we created, as well as two short-term trades, that look goo...

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Chart School

Bulls Keep Buying Into The Close

Courtesy of Declan.

Good stuff for bulls as resistance levels get ticked off on the advance. There breathing room for many indices and a chance for consolidation. Nit pickers could point to light volume, but it would be hard for buyers to be coming in here given the sequence of gains.

The Nasdaq 100 still remains tagged to resistance. Can it break tomorrow or will sellers make an appearance. All I know is yet another short trade of mine is stopped out. I should add, I haven't touched my investment account. I would be looking to buy if I had the funds available.

The S&P made a decisive push past its 50-day MA. Next resistance is up at 2,044. Tech...

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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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Whitney Tilson On LL, EXACT, And Martin Shkreli


Whitney Tilson On LL, EXACT, And Martin Shkreli

Courtesy of Value Walk

1) The shares of one of my largest short positions (~3%), Exact Sciences, crashed by more than 46% yesterday. Below is the article I published this morning on SeekingAlpha, explaining why I think it’s still a great short and thus shorted more yesterday. Here’s a summary:

  • The U.S. Preventative Services Task Force’s Colorectal Cancer Screening Draft Recommendation issued yesterday is devastating for Exact Sciences’ only product, Cologuard.
  • I think this is the beginning of the end for the company.
  • My price target for the stock a year from now is $3, so I shorted more yes...

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Sector Detector: Searching for solid support in the face of global headwinds

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

Courtesy of Sabrient Systems and Gradient Analytics

Uncertainty about the health of the global economy led investors to flee U.S. equities during Q3, primarily driven by worries about China's growth prospects and the Federal Reserve’s decision to not raise rates. Sure, there are plenty of real and perceived headwinds, but on balance it seems that a recession here at home is not in the cards. And when you consider sentiment and the technical picture, it appears that a continuation of Friday’s bounce is in store. The question remains as to whether the seasonally strong Q4 will be able to propel the bulls through levels of resistance that have built up.

In this weekly update, I give my view o...

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Swing trading portfolio - week of October 5th, 2015

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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Baxter's Spinoff

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

Baxter Int. (BAX) is splitting off its BioSciences division into a new company called Baxalta. Shares of Baxalta will be given as a tax-free dividend, in the ratio of one to one, to BAX holders on record on June 17, 2015. That means, if you want to receive the Baxalta dividend, you need to buy the stock this week (on or before June 12).

The Baxalta Spinoff

By Ilene with Trevor of Lowenthal Capital Partners and Paul Price

In its recent filing with the SEC, Baxter provides:

“This information statement is being ...

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Mapping The Market

An update on oil proxies

Courtesy of Jean-Luc Saillard

Back in December, I wrote a post on my blog where I compared the performances of various ETFs related to the oil industry. I was looking for the best possible proxy to match the moves of oil prices if you didn't want to play with futures. At the time, I concluded that for medium term trades, USO and the leveraged ETFs UCO and SCO were the most promising. Longer term, broader ETFs like OIH and XLE might make better investment if oil prices do recover to more profitable prices since ETF linked to futures like USO, UCO and SCO do suffer from decay. It also seemed that DIG and DUG could be promising if OIH could recover as it should with the price of oil, but that they don't make a good proxy for the price of oil itself. 


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Watch the Phil Davis Special on Money Talk on BNN TV!

Kim Parlee interviews Phil on Money Talk. Be sure to watch the replays if you missed the show live on Wednesday night (it was recorded on Monday). As usual, Phil provides an excellent program packed with macro analysis, important lessons and trading ideas. ~ Ilene


The replay is now available on BNN's website. For the three part series, click on the links below. 

Part 1 is here (discussing the macro outlook for the markets) Part 2 is here. (discussing our main trading strategies) Part 3 is here. (reviewing our pick of th...

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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 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.

Thank you for you time!

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...

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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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