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Faltering Thursday – Trouble at the Top of the Range?

INDU WEEKLYThis low-volume rally is a joke.  

As I pointed out to our Members in yesterday's Live Chat Room, volume on the up side of that v-shaped recovery has been 1/2 of what the volume to the downside was (comparing the last 3 weeks to the 3 before it), which means this "rally" is nothing but hot air – with very little support underneath.  

And I know you get tired of hearing me say it and I get tired of saying it but, one thing I learned in 2008 is that you can't warn people often enough to be more cautious.  Yes we lose subscribers when we go to cash (not much to trade) but, when the markets do pull back – my subscribers still have money!  

And it's not like we can't make money with our cash.  Just yesterday, we posted 7 bullish trade ideas for our Members, 3 of which we added to our virtual portfolios and one of which, a long on /SI at $16, made $2,500 per contract in 30 minutes and another $1,500 per contract this morning – that's not a bad way to sit on the sidelines, is it?  

We don't ALWAYS have to be invested.  We still have many long-term positions, it's just that we also have a lot of cash in case those long-term positions get cheaper and we decide to buy more.  In fact, a few of yesterday's plays were just that – buying more of stocks that we've been liking all year as they go on sale.  

This morning our Futures are at 17,600 on /YM, 2,040 on /ES, 4,200 on /NQ and 1,155 on /TF and we can go long on the laggard when (and IF) two of them are over and get out when 3 are below as a bullish play for the normal morning pump – that's how we make a quick $500 for you at Philstockworld!  

Copper is bouncing off $3 again, that's also a good play, one that already made $1,250 per contract at $3.05 when I recommended it in Tuesday morning's post (which you can have delivered to you each morning by SUBSCRIBING HERE).  


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EZCH – Not So EZ Year

EZCH – Not So EZ Year

By Ilene 

After a disappointing quarter and some probable tax-selling, EZchip might be a good turnaround for next year.

So I'm thinking we'll sell a stock or two out of Paul's otherwise neglected Virtual Portfolio (check back) and add EZCH.

EZchip is a profitable technology company that is investing in future products, with no debt and $7.63 cash per share. For investors, I think the most important questions are whether (1) the possible tax selling will ever end, (2) the company will grow, and (3) are you willing to wait out the slump while new products get introduced next year?

Look at that chart below. How low do you think EZCH will go? (It has the falling knife look to it, doesn't it?)

 

Screen Shot 2014-11-19 at 12.32.22 PM

 

Disclaimer: I do not offer investment advice or make any representations as to my knowledge regarding the truth of what I read on Yahoo finance. I am completely unqualified to give recommendations, suggestions, opinions, and anything else that might seem like a smart idea. Do your own research. 

If you haven't read the website in the last few months, please note, Paul's virtual put selling portfolio is ending, and we will not be pretend-selling any puts. 

 





How Uber is Changing the Economy

 

How Uber is Changing the Economy

Courtesy of 

“The democratization of those types of benefits allow people to have more flexible ways to make a living. They don’t have to be working for The Man.”

I had an Uber driver tell me yesterday that the service has completely changed his life for the better. He drove a cab for 24 years and was afraid to ever give it up because of all the security that went with working for the company that held the medallion.

He’s been wiping vomit out of his backseat for decades and dealing with the worst humanity has to offer – drunks, violent people, pigs who leave trash in his car, ride thieves who jump out at red lights, etc. And working for other people, horrible people who would take advantage of him at any juncture – just because they knew he had no way to stop them.

Now he deals with customers who actually have a stake in being on their best behavior and he has never been happier. He gets to drive a clean vehicle and interact with conscientious passengers. Best of all, there’s no haggling and tips are included – automatically. The nasty friction of being a cabbie for hire is gone and in its place is a professional work situation.

In the quote above, Uber founder and CEO Travis Kalanick explains how Obamacare has helped make this all possible.

For all it’s flaws (and there are plenty), one thing that single-payer insurance does is it lets people cut the umbilical cord with bad work situations or become more entrepreneurial without the threat of having to drop out of society.

 





Will We Hold It Wednesday – S&P 2,050 Edition

S&P 2,050!  

Why not?  Why not 3,000?  3,500?  4,000?  Is there any number that will begin to sound ridiculous to top 1% traders, who are using the Fed's Free Money to make even more money for themselves?  It's like the $50M balloon dog at Christies – what's the difference to people who have, essentially, infinite amounts of money to spend?  

The Forbes 400, for example, made $1Tn MORE between 2009 and 2012 – an average of $300Bn a year.  Last year, they added on another $400Bn bringing their total INCOME up to an average of $1,000,000,000 PER YEAR per Billionaire.  Compared to the average household income of the average US Citizen of $52,000, that is, pretty much, INFINITELY more (19,230 times more, to be exact).  

Meanwhile, over the same period of rampant QE, the average income of the Median Household FELL 4%, from $54,000 to $52,000.

Of course, that should be obvious, as it takes $2,000 from 150M working people just to come up with $300Bn of the $400Bn the top 400 made last year.  That's how it works, folks – they take $2,000 from 150M people and the rich get richer and the poor (or the middle class) get poorer.  

Yes, there is also some economic expansion – there has to be or where did the other $100Bn come from?  No wonder record amounts of money (a mere $2Bn) were spent on the recent mid-term elections – in order to guarantee the top 1% that they'd get at least 2 more years of the same treatment.  

And what do the top 0.0001% do with their money?  Over $1Bn more pours in every day – they can't possibly spend it all on balloon dogs and $5,000 hamburgers – they HAVE to invest some of it!  

Real estate left a bad taste in people's mouth very recently and, as noted by the chart below, there's not enough homes in the US for all these Billionaires to buy.  Gold and silver have lost their shine, oil is a bust, bonds aren't paying any interest (also thanks to Fed meddling), so that makes equities the only…
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Comment by phil

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  1. phil

    SPY  5  MINUTEGood morning! 

    Asia was generally red this morning with Nikkei down 0.3%, Hang Seng down 0.66%, Shanghai off 0.22% and India down 0.46%.  Singapore bucked the trend, up 0.63% but all were saved by the bell as they sold off into the close.  

    Interest-Rate Cuts Loom Across Asia

    Dollar Rises to 7-Year High Versus Yen; Oil, Gold Retreat. The dollar climbed, reaching a seven-year high against Japan’s yen after Prime Minister Shinzo Abe called an early election and postponed a sales-tax increase. Asian equity gauges were mixed, while gold retreated and oil extended its slump. The Bloomberg Dollar Spot Index added 0.1 percent by 10:56 a.m. in Tokyo, with the greenback climbing as high as 117.22 yen. Japan’s Topix index rose 0.4 percent while Hong Kong’s Hang Seng Index was little changed after two days of losses.

    Japan Is Dying And We Still Don't Get It?

    EWJ WEEKLY

    FXY WEEKLY

    Shanghai Stock Link Flows Plunge as CLSA Sees Ghost Train. The flood of buy orders for Shanghai shares through the Hong Kong exchange link has slowed to a trickle two days after the program’s debut. Net purchases of mainland equities by global investors totaled 1.1 billion yuan ($180 million) at the midday break, down from 2.7 billion yuan at the same time yesterday and 10.6 billion yuan on Nov. 17. Hong Kong stock buying slowed 66 percent from yesterday to 117 million yuan. The Shanghai Composite Index (SHCOMP) slipped 0.2 percent and shares of Hong Kong Exchanges & Clearing Ltd. (388) headed for the biggest three-day drop since 2012.

    Violence Flares as Hong Kong Protesters Move on Legislature

    Head of Energy Body Wants Japan to Restart Nuclear Reactors

    Mining’s $120 Billion Ore Bet Sours as Peak Steel Looms in ChinaChinese President Xi Jinping obviously wasn’t speaking for the world’s iron-ore producers when he pronounced this month that the risks from his country’s slowing growth “aren’t that scary.” The world’s mining


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Nokia rises from the dead with an iPad mini knock-off that looks even better than the original

Nokia sold its phone-making division to Microsoft earlier this year after a long time of playing dead. Nathaniel Mott doesn't hold back in describing Nokia's unimpressive period: ;"it was hard not to look at the company’s shambling corpse and feel the same kind of disgust one feels when a particularly gruesome zombie shows up on 'The Walking Dead.'” Can't get much uglier than that. With such low expectations, and a chance of rebirth, will Nokia recreate itself? 

Nokia rises from the dead with an iPad mini knock-off that looks even better than the original

By  at Pando

Nokia might not be as dead as we thought.

The company has announced a new tablet to go along with its Z Launcher for Android devices. It’s basically a better iPad mini: it’s thinner, lighter, and features the laminated display that Apple added to the iPad Air 2 but didn’t include in the latest version of the itty-bitty iPad mini. Oh, and it will cost just $250 when it debuts early next year, compared to the iPad mini’s $399.

The device is expected to debut in China early next year before heading to Russia; it’s not clear when, or if, it will be available in Western markets. The tablet will actually be manufactured by Foxconn, which licensed the design and branding from Nokia, but the Finland-based company will have control of its design and sales. Nokia is dragging itself out of its Microsoft-dug grave.

Keep reading Nokia rises from the dead with an iPad mini knock-off that looks even better than the original | PandoDaily.





Comment by akademia

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  1. akademia

    VXX

    stjeanluc /

    Sorry for the confusion!

    Palotay /

    Yes. I managed to sell the $15.00’s and buy them back as you did, but as you say the price is too low now, even with the VIX at 13. I just wanted to know if you had lowered your target prices or if you were holding fast. Thanks.







Let the Last Anonymous Word be Yours

Sometimes there is nothing left to say, and talking isn't doing any good anyway, and you're still more angry than the $17 US dollars (or 0.05 bitcoin) it will cost to deliver your final message. Act on your feelings while the moment is hot, send (back) the Gift of Sh*t (but really), and try to proceed to closure. 

I am not 100% satisfied with the box of shit I received in the mail

By , Pando

On-demand fecal delivery (or “shit-tech”) is one of the hottest sectors around. And leading the way is Shit Express, whose super-simple elevator pitch is that for $16.95 [pay with Pay Pal], or 0.05 bitcoin, it will anonymously send a piece of shit to someone on your behalf.

Because we always aim to stay on the bleeding edge of emergent technology, Pando had to try out the service for itself. So one week ago, my colleague Michael Carney purchased a box of shit and had it sent to my address in Brooklyn. And today, I found in my stairwell a neatly gift-wrapped box from Slovenia addressed to “David F’ing Holmes” with this inside:

[...]

Note: I confirmed with Michael that he addressed it “David F’ing Holmes,” meaning that the shit definitely came from him and not somebody I’ve legitimately pissed off.

It even came affixed with this wonderful message on the side:

More here > 

Order a package here > 





Connecting the Dots: Correction? What Correction?

Are the stock market patterns we've become used to during the last five years about to change? Tony Sagami argues that they are — that selling the rallies may be the next best move. 

Connecting the Dots: Correction? What Correction?

By Tony Sagami

The textbook definition of a correction is a drop of 10% or more. The stock market came close to hitting that correction benchmark and has mounted a furious rally since mid-October. The S&P 500 has staged a remarkable rally, jumping by 12% from its October lows in just four weeks.

There’s something in our DNA that pushes humans to follow the herd, and investors have been herding into the stock market in almost unprecedented enthusiasm. I mean really herd.

The S&P 500 has closed above its five-day moving average for 20 consecutive days. A five-day moving average is an extremely short-term indicator that can rapidly change, so the feat of staying above this hypersensitive indicator for almost a month is rare.

How rare? It has happened just three times before in the last two decades.

And each time when the market rallied so vigorously, the winning streak ended within four weeks. That tells me that despite the stock market’s hot hand, the risk/reward profile of the stock market is in favor of the downside.

The rally has also pushed valuations back into nosebleed territory. The S&P 500 is now trading at a P/E ratio of 19, which is well above the historical average of 15.

The stock market looks even more overvalued if you dig a little deeper. The Shiller P/E ratio, developed by Nobel Prize-winning economist Robert Shiller, adjusts earnings for inflation and average corporate earnings over the last 10 years. The current Shiller P/E ratio is 26.5, dangerously high compared to the historical average of 16.

Could the stock market get even more overvalued? Sure! During the dot-com heydays, the Shiller P/E got as high as 44.

Perhaps you’re not impressed with Shiller’s work. How do you feel about Warren Buffett? Buffett’s favorite valuation indicator is the total stock market cap divided by GDP.

Buffett called this indicator “the best single measure of where valuations stand at any given moment” because it really compares


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Comment by Pharmboy

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  1. Pharmboy

    CELG/nich….if you are up, why would you not take it off, or at least protect the gains?  We were in the BCS…I said were, as we took it off.







 
 
 

Chart School

World Markets Weekend Update: The Rally Continues

Courtesy of Doug Short.

The world market rally continued last week with six of the eight indexes on my watch list posting gains. Europe led the pack, with Germany's DAX up 5.18%, France's CAC 40 up 3.44% and the UK up 1.45%. Hong Kong's Hang Seng was the big loser with its -2.70% loss. The other negative performer was Japan's Nikkei 225. It's fractional -0.76% decline snapped not only a four-week string of gains, but also four weeks as the top performer.

China's Shanghai Composite remains the only index on the watch list in bear territory -- the traditional designation for a 20% decline from an interim high. The index is down 28.36% from its August 2009 peak. See the table inset (lower right) in the chart below.

He...



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Zero Hedge

The Real Reason Why The Netherlands Repatriated Its Gold

Courtesy of ZeroHedge. View original post here.

Submitted by Sprout Money.

In what could definitely be called a stunning move, the Netherlands has announced it has repatriated in excess of 120 tonnes of gold from the vaults of the Federal Reserve in New York to the Dutch Central Bank in Amsterdam. Officially a move made to rebalance the locations where the gold is being stored, one cannot ignore the fact that the Netherlands only repatriated a large part of the gold which was stored in New York and it did not touch the gold stored in Canada and London.

Additionally, it’s not just ‘some’ gold being brought back home, no, the total amount is 122.47 tonnes or almost 4 million ounces with a market value of $5B. This will reduce the exposure of the Dutch Cen...



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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 Happy Thanksgiving Edition of Stock World Weekly!

Click on this link and sign in with your PSW user name and password. 

Picture via Pixabay.

...

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Phil's Favorites

"Eagle Cam": Aerial View of London via Video Camera Attached to an Eagle

Courtesy of Mish.

An eagle got an impressive birds-eye-view of London this week, flying over the city's most iconic landmarks using a Sony HDR-AZ1VR Action Cam attached to its back.



Link if video does not play: Action Cam Footage Shows Eagle Flying Over City of London

The BBC reports Eagle With Camera Flies Over London
An eagle with a camera attached has flown across London and offered a new perspective on some of the capital's best-known landmarks.

The footage was recorded over a week by an Imperial Eagle called Darchan.

The animal has been brought to London from the French Alps by The Freedom Project to mark the 50th anniversary of the International Union for Conservation of ...



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Market Shadows

Official Moves in the Market Shadows' Virtual Portfolio

By Ilene 

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

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

Notes

1. th...



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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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OpTrader

Swing trading portfolio - week of November 17th, 2014

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

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Sabrient

Sector Detector: Investors make up new rules for their new market paradigm

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

Courtesy of Sabrient Systems and Gradient Analytics

By Scott Martindale

Investors in U.S. equities seem to have embraced a new market paradigm in which upside spikes come more swiftly than the downside selloffs. Remember when it used to be the other way around? When fear was stronger than greed? The market is consolidating its gains off the early-October V-bottom reversal, and no one seems to be in any hurry to unload shares this time around, with the holidays rapidly approaching and all. After all, there are bright blue skies directly overhead giving hope and respite from the early freeze blanketing the country.

In this weekly update, I give my view of the current market environment, offer...



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Digital Currencies

Ukraine Central Bank Bans Bitcoin "To Protect Citizens" From Financing Terrorism

If you would have supposed that Ukraine had enough problems to make banning bitcoins a backburner issue, you'd have been wrong. The rationale, "to protect consumers' rights" makes little to no sense... The other one, "to keep money in the country" makes more sense. 

Ukraine Central Bank Bans Bitcoin "To Protect Citizens" From Financing Terrorism

Courtesy of ZeroHedge. View original post here.

The Hryvnia has collapsed to new record lows near 15/USD this morning. The Central Bank and bankers "agreed to keep UAH at 15-16/USD" but are &qu...



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Option Review

Yamana Gold call options sink

Yamana Gold call options sink

By Andrew Wilkinson at Interactive Brokers

A four-year low for the spot price of gold has had a devastating impact on Yamana Gold (Ticker: AUY), with shares in the name down at the lowest price in six years. Some option traders were especially keen to sell premium and appear to see few signs of a lasting rebound within the next five months. The price of gold suffered again Wednesday as the dollar strengthened and stock prices advanced. The post price of gold fell to $1145 adding further pain to share prices of gold miners. Shares in Yamana Gold tumbled to $3.62 and the lowest price since 2008 as call option sellers used the April expiration contract to write premium at the $5.00 strike. That strike is now 38% above the price of the stock. Premium writers took in around 16-cents per contract o...



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Pharmboy

Biotechs & Bubbles

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

Well PSW Subscribers....I am still here, barely.  From my last post a few months ago to now, nothing has changed much, but there are a few bargins out there that as investors, should be put on the watch list (again) and if so desired....buy a small amount.

First, the media is on a tear against biotechs/pharma, ripping companies for their drug prices.  Gilead's HepC drug, Sovaldi, is priced at $84K for the 12-week treatment.  Pundits were screaming bloody murder that it was a total rip off, but when one investigates the other drugs out there, and the consequences of not taking Sovaldi vs. another drug combinations, then things become clearer.  For instance, Olysio (JNJ) is about $66,000 for a 12-week treatment, but is approved for fewer types of patients AND...



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Help One Of Our Own PSW Members

"Hello PSW Members –

This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible.  Feel free to contact me directly at jennifersurovy@yahoo.com with any questions.

Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts.  After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.)  Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.

http://www.youcaring.com/medical-fundraiser/help-get-shadowfax-out-from-the-darkness-of-medical-bills-/126743

Thank you for you time!




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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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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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