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Financial Markets and Economy

A Year of Lower Oil Prices: Crossing A Boundary? (Art Berman)

The oil price collapse of 2014-2015 began one year ago this month (Figure 1).  The world crossed a boundary in which prices are not only lower now but will probably remain lower for some time. It represents a phase change like when water turns into ice: the composition is the same as before but the physical state and governing laws are different.

Daily Crude Oil Prices Through June 2015

Market Wrap: Greek "Capitulation" Optimism Sends Global Risk Higher After China Re-crashes (Zero Hedge)

Before we focus on the Greek drama which this morning has soared to new highs, a quick look at China which after trading largely unchanged for most of the day, saw a bout of late day selling, which brought the Shanghai Composite 5.2% lower, wiping out all Tuesday rebound gains, and back to the Monday post-PBOC crash level.One thing that was clear: nobody cared about the Chinese PMI data, where both the official PMI and HSBC Mfg PMI missed expectations and printed at 50.2 (exp. 50.4) and 49.4 (Exp. 49.6), respectively.

MBA: Mortgage Applications Decrease in Latest Weekly Survey, Purchase Index up 14% YoY (Calculated Risk)

Mortgage applications decreased 4.7 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending June 26, 2015. …

Mortgage Refinance Index

China Stocks Fall: Shanghai Composite Index Drops 5.2% (Bloomberg)

Chinese stocks tumbled in late trade, with the benchmark index almost erasing Tuesday’s rally, as margin traders unwound positions for a seventh straight day and data showed economic growth remaining sluggish.

chubbIt's a $28.3 billion insurance mega deal (Business Insider)

Insurance provider Ace Limited is buying Chubb in a $28.3 billion deal, it announced on Wednesday.

The boards of both companies have agreed to the deal that will see Chubb shareholders receive $62.93 per share in cash and 0.6019 in Ace shares.


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  1. denlundy

    Phil  Last day of trading tomorrow before our three day Independence Holiday and Greece still up in air.  Should be looking at a volatile and interesting Thursday trading session?







Whipsaw Wednesday – Greece Up, China Down

Embedded image permalinkWheeeeeeee – what a ride! 

It's 7:39:11 am and Greece is "fixed" at the moment and we have to time-stamp it to the second or it may change again.  European markets are LOVING IT with 1.5-2.5% gains across the board but, on the whole, the DAX (the only one we really care about) isn't even close to our weak bounce line at 11,250 yet – so we don't care.  We do care about CHINA!!! (see yesterday's post), who dropped over $200Bn in stimulus this week and they fell another 5% this morning anyway.  That's not good, folks

5% would be a 900-point drop in the Dow in one day.  I think I need to put that in perspective because we say "China fell 5% today" and people go "well, isn't that a shame" and that's the end of it.  It's not a shame, folks, it's a TRAGEDY!  To sum things up, the Shanghai has fallend from 5,200 to 4,000, which is 23%, which would be over 4,000 Dow points and it bounced back to 4,300, which was a weak 25% retrace of the drop that was IMMEDIATELY reversed DESPITE massive stimulus measures.  

Of course the 3,900 line is bouncy – it represents a 25% drop from 5,200 so SOMEONE is going to speculate and buy that dip but the dip buyers ran straight into a new round of sellers and now 3,900 MUST HOLD on the Shanghai or Greece will be the last thing you're worried about next week!  

China Margin FinancingWe are nowhere near unwinding the 2 TRILLION Yuan ($339Bn) of margin debt that has built up in China, much of it financed at the 22% capped interest rates.  When your market is gaining 100% a year, taking a 22% loan out to buy stocks seems to make sense – especially when all of your state-controlled media (not to mention the Corporate Propaganda you pick up in the US) tells you how AWESOME everything is.  

There are now more registered stock traders in China (90M) than there are registered Communist Party Members (87.8M) – interesting news on the 94th anniversary of the party's founding.  It’s safe to assume this is not
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Comment by phil

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  1. phil

    Good morning!  

    Damn, we popped 1% again and I missed it.  Greece seems to be saying they will accept something or other and Europe popped 2% in one shot.  So exiting it makes people not notice that Shanghai fell 5% again…

    Embedded image permalink

    Shanghai Composite might drop to 2,100 Chovanec says

    China Unleashes Police, Internet Censors on Anti-PX Plant Protesters…

    "Once they found out that you were a resident of Jinshan, they took you away. The Internet was blocked. The minute that photos were uploaded, they disappeared."

    Photo published for China Unleashes Police, Internet Censors on Anti-PX Plant Protesters...

     

    Apparently, this is real:

    JUST IN: Greece can stay in euro even with 'no' vote, Schaeuble tells lawmakers

    Tsipras ready to accept most bailout terms – FT

    Markets rally on report Greece accepts creditor terms

    Interactive Greece debt tracker: See what the country owes in the upcoming weeks

     

    We hit our re-entry target on /RB last night, $2.02 and no need to double down lower as we bounced right off it all the way back to $2.04 already!

    Gold and silver pulling back as Greece is "fixed" again but I still like them long because – CHINA!!!







News You Can Use From Phil’s Stock World

 

Financial Markets and  Economy

Ukraine Halts Russian Gas Purchases After Price Talks Fail (Zero Hedge)

It has been a bad day for deals and deadlines all around: first Greece is about to enter July without a bailout program and in default to the IMF with the ECB about to yank its ELA support or at least cut ELA haircuts; also the US failed to reach a nuclear deal with Iran in a can-kicking negotiation that has become so farcical there is no point in even covering it; and now moments ago a third June 30 "deal" failed to reach an acceptable conclusion when Russia and Ukraine were unable to reach an agreement on gas prices at talks in Vienna on Tuesday. As a result, Ukraine is suspending its purchase of Russian gas.

obama rousseff Brazil once had an All-Star economy. Now America is the stud (CNN)

The United States stood on the sidelines while Brazil was a stud. Now America is the All-Star economy.

The tables have turned between the two nations' economies, and it's a much different story from just a few years ago.

Brazil's President, Dilma Rousseff, visited President Obama Tuesday at the White House as Brazil's economy continues to shrink. When Obama visited Rousseff in 2011, Brazil was coming off a stellar year of economic growth and the U.S. was making tepid progress in its recovery from the recession.

A man gestures as he looks at boards displaying stock prices at the Australian Securities Exchange in central Sydney, Australia June 29, 2015. REUTERS/David Gray Euro burdened by Greece, uncertainty high (Business Insider)

The euro remained on the defensive in Asia on Wednesday as Greece became the first developed economy to default on a loan with the IMF, setting the scene for another day of uneasy action in markets.

Still, it surprised no one when the International Monetary Fund confirmed Greece had missed a payment on its debt, perhaps taking it a step closer to an exit from the euro.

The IMF said Greece had asked for a last-minute repayment extension earlier on Tuesday, which the Fund's board would


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Chris Hedges: A Prayer For Democracy – Town Hall Seattle

 

Chris Hedges: A Prayer For Democracy – Town Hall Seattle

Courtesy of Jesse's Cafe Americain

"Empires communicate in two languages. One language is expressed in imperatives. It is the language of command and force. This militarized language disdains human life and celebrates harshness and brutality. It demands. It makes no attempt to justify the flagrant theft of natural resources and wealth or the use of indiscriminate violence. 

The other language of empire is softer. It employs the vocabulary of ideals and lofty goals and insists that the power of empire is noble and benevolent. The language of beneficence is used to speak to those outside the centers of death and pillage, those who have not yet been totally broken, those who still must be seduced to hand over power to predators. 

The road traveled to total disempowerment, however, ends at the same place. It is the language used to get there that is different."

Chris Hedges



 





Fun, Fun, Fun … ’til her daddy takes the T-bird away

Well no one is having fun anymore. Here's Paul Price's take on the latest Greek drama.

Fun, Fun, Fun … ‘til her daddy takes the T-bird away

By Paul Price

The popular press has made Germany into the villain of the current Greek drama (and popular bloggers point out the role of Goldman Sachs.) Why, they ask, should Berlin be dictating how the Greek government runs its own country? 

Understanding the reasoning for that is quite simple if you think in terms of the Beach Boys’ old hit song, Fun, Fun, Fun.

Fun, Fun, Fun lyrics

Greece is the wayward “daughter.” Substitute average retirement at 57.8 years old and cushy government pensions with the “hamburger stand.” Think of Germany as the “dad” who recently wised up. Understand that Greece “shouldn’t have lied” all along about its financial status.

Dad was funding the sweet life for his partying daughter while supplying the goodies and footing the bills. She told him the cash was all going towards her betterment and growth when, really, the money was simply being used to have a great time.

No wonder her old man got pissed off.

What would you do in that situation?

You’d probably take away the keys, ground her and cancel her credit cards.

When your kids get jobs and become financially independent they’ll have every right to tell you to “f*ck off.” Until then, while they’re still on your dime, it is only natural to expect they will live under your house rules.

Greece’s proposed referendum expects to ask the kids whether they want to keep partying or if they’d prefer to stay home, study and hunker down.

Which way do you think the vote will go?

Is the responsible parent really the “bad guy” in this story?

Okay, okay. It's a little more complicated. There's enough blame to go around and many complicit players. (Like with the subprime mortgage crisis in the US.) 

Germany and the rest of Europe would have been better off writing down Greece's debt in full, back in 2010-2011, rather than lending the country more money to keep up the facade that Greece could avoid default. In effect, the troika (the European commission, the European Central Bank and the IMF) paid off some bondholders and…
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Shoot the Dog and Sell the Farm

 

Thoughts from the Frontline: Shoot the Dog and Sell the Farm

By John Mauldin

(Originally published on June 27, 2015)

“If this were a marriage, the lawyers would be circling.”

The Economist, My Big Fat Greek Divorce, 6/20/2015

Greece is again all the buzz in the media and on the commentary circuit. If you’re like me, you are suffering terminal Greece fatigue. You just want Greece and its creditors to “do something already” rather than continually coming to the end of every week with no resolution, amid finger-pointing and dire warnings from all sides about the End of All Things Europe – maybe even the world.

That frustration is a common human emotion. Perhaps the best and funniest illustration (trust me, it is worth a few minutes’ digression) is the story about one of my first investment mentors, Gary North, who was working in his early days for Howard Ruff in Howard’s phone call center before Gary began writing his newsletters and books. (Yes, I know I am dating myself, as this was the late ’70s and early ’80s, just as I was getting introduced to the investment publishing business. And for the record, I knew almost everyone in the publishing business in the ’80s. It was a very small group, and we got together regularly.)

Howard set up a phone bank where his subscribers could call in and ask questions about their investments and personal lives. One little lady had the misfortune to get Dr. Gary North on the line. (Gary was the economist for Congressman Ron Paul and went on to write it some 61-odd books, 13,000 articles, and more – all typed with one finger. He is a human word-processing machine.)

This sweet lady lived way out in the country and was getting older. She asked Gary if he thought it would be a wise idea for her to move into the city (I believe it was San Francisco) to live with her daughter. Not knowing the answer, Gary helped her work out the pros and cons over the phone, and she decided to move. A few days later she called back and said that she couldn’t bring her dog with her because of…
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News You Can Use From Phil’s Stock World

 

Financial Markets and Economy

Gross Says Hold Cash, Prepare For "Nightmare Panic Selling" (Zero Hedge)

Ever since bond market liquidty became the topic du jour across Wall Street (just a few short years after it was first raised in these pages), analysts, pundits, and reporters alike have begun to question what might happen should investors who have piled into mutual funds and ETFs (especially fixed income products) suddenly decide to sell into illiquid secondary markets.

China stocks are giving investors a nasty case of whiplash (CNN)

China stocks had another wild day on Tuesday, as volatile momentum swings kept investors guessing about the direction of a market that has lost trillions of dollars of value in recent weeks.

The Shanghai Composite dropped as much as 6% in morning trading, before bouncing back to close up 5.5%. The performance comes one day after China's benchmark index dipped into bear market territory — defined as a decline of 20% from recent highs.

china charts

Uber Bonds Term Sheet Reveals $470 Million in Operating Losses (Bloomberg)

Uber Technologies Inc. is telling prospective investors that it generates $470 million in operating losses on $415 million in revenue, according to a document provided to prospective investors.

The term sheet viewed by Bloomberg News, which is being used to sell $1 billion to $1.2 billion in convertible bonds, doesn’t make clear the time period for those results. The document also touts 300 percent year-over-year growth.

Five years after flash crash, committee to fix markets can barely agree an agenda (Market Watch)

Equity markets are “broken,” a “complete mess,” or maybe even “rigged.” Luis Aguilar, a commissioner on the Securities and Exchange Commission, was quoting others when he used those words in remarks to the inaugural meeting of the SEC Equity Markets Structure Advisory Committee on May 13. But his warnings were no less emphatic. Almost five years to the day since the so-called flash crash, the SEC and key market players were finally gathered to discuss, and inevitably debate, the causes and responses to a significant decrease in investor and regulator confidence


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Trillion Yuan Tuesday – China Pumps it Up to Close the Quarter

Photo published for Strap In! China Is Crashing Again

Down in the pleasure centre,
hell bent or heaven sent,
listen to the propaganda,
listen to the latest slander.
Pump it up until you can feel it.
Pump it up when you don't really need it. – Elvis

China has set a new Global record by dumping almost $200Bn (over 1Tn Yuan) in stimulus into their overheated markets in just two days.  Sunday night it was a rate cut AND lowering the reserve requirements for banks and yesterday afternoon they dropped another $50Bn in a "Reverse Repo" operation and, to cap it off this morning, the Finance and social Security Ministries published draft rules that would permit the state pension fund to invest up to 30% of its net asset value in securities, potentially allowing ANOTHER 600B yuan ($97B) to enter the market.

Take 30% of our retirement savings and buy stocks that already gained over 100% this year in an attempt to prevent a bear market from wiping out all of the gains – BRILLIANT!!!  

Embedded image permalinkCertainly Chinese speculators thought so as the Shanghai went from down 5.6% at the open to up 5.6% at the close!  This allowed them to save a little face at the close of the Quarter and, more importantly, promises Fund Managers a whole new round of suckers to dump shares into in July.

10% happens to be a Strong Bounce off the 25% drop, per our 5% Rule™, so we're not going to be too impressed until we see some follow-through.  Like us, Bloomberg is skeptical, saying: "China's Magic Tricks Can't Save Its Stock Market" warning us:

Only time will tell if Beijing's bag of tricks is empty. But if it is, the fallout on global markets could dwarf the impact of Greece's flirtation with default. The world, after all, has had a few years to contemplate a Greek exit from the euro. But if the world's biggest trading nation suddenly hit a wall, it would


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Zero Hedge

FReeDoM...

Courtesy of ZeroHedge. View original post here.

Submitted by williambanzai7.


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Phil's Favorites

This Is Why The Euro Is Finished

Courtesy of The Automatic Earth.

Walker Evans Waterfront in New Orleans. French market sidewalk scene 1935

The IMF Debt Sustainability Analysis report on Greece that came out this week has caused a big stir. We now know that the Fund’s analysts confirm what Syriza has been saying ever since they came to power 5 months ago: Greece needs debt relief, lots of it, and fast.

We also know that Europe tried to silence the report. But what’s most interesting is that this has been going on for months, as per Reuters. Ergo, the IMF has known about the -preliminary- analysis for months, and kept silent, while at the same time ‘negotiating’ with Greece on austerity and bailouts.

And if you dig a bit deeper still, there’s no avoiding the fact that the IMF hasn’t merely known this for mo...



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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

China's slowdown is bad news for the world's big industrial exporters (Business Insider)

China's slowing economy is a serious concern for the economies of the nearly 50 nations that count China as their top export destination.

According to economists at UBS, not only will it impact the countries where the goods are coming from, but individual industries will also be hit harder than others.

Brett Arends's ROI: Why I’d vote ‘no’ ...



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Chart School

Chinese SSEC rally with Wyckoff Logic

Courtesy of Read the Ticker.

Supply and demand is the leading force within stock prices, you must know the tea leaves. Richard Wyckoff logic is the only known method of understanding supply and demand with the stock market.Readtheticker.com provides all the tools you need to be a Wyckoff master analyst.More from RTT Tv

NOTE: readtheticker.com does allow users to load objects and text on charts, however some annotations are by a free third party ima...

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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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Kimble Charting Solutions

Shanghai index creates historic reversal pattern like 2007

Courtesy of Chris Kimble.

CLICK ON CHART TO ENLARGE

Much of the attention around the world seems to be revolving around a small country called Greece. What about the most populated country in the world (China), any key messages coming from there of late?

Well another Month, Quarter and Half a year are in the books. With this in mind I wanted to look at Monthly action of the hottest stock market in the world, the Shanghai Index. Above looks at the Shanghai index over the past 25-years. The 100%+ rally over the past year has pushed the Shanghai index up to its 23% Fibonacci ratio and a long-term resistance line, that has been in play for 25-years at (1) above.

As the Shanghai index was hitting this...



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OpTrader

Swing trading portfolio - week of June 29th., 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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Digital Currencies

BitGold Now Available in US! Why BitGold?

Courtesy of Mish.

BitGold USA

Effective today, BitGold Announces Platform Launch in the United States.

BitGold, a platform for savings and payments in gold, is pleased to announce the launch of the BitGold platform for residents of the US and US territories. As of today, US residents can sign up on the BitGold platform and buy, sell, or redeem gold using BitGold’s Aurum payment and settlement technology. US residents will also have access to the BitGold mobile app and a prepaid card when these features launch over the coming weeks. Send and receive gold payment features are not initially available in the US.

About BitGold

...



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Sabrient

Sector Detector: Bulls under the gun to muster troops, while bears lie in wait

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

Courtesy of Sabrient Systems and Gradient Analytics

Two weeks ago, bulls seemed ready to push stocks higher as long-standing support reliably kicked in. But with just one full week to go before the Independence Day holiday week arrives, we will see if bulls can muster some reinforcements and make another run at the May highs. Small caps and NASDAQ are already there, but it is questionable whether those segments can drag along the broader market. To be sure, there is plenty of potential fuel floating around in the form of a friendly Fed and abundant global liquidity seeking the safety and strength of US stocks and bonds. While the technical picture has glimmers of strength, summer bears lie in wait.

In this weekly ...



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Pharmboy

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. 

Since...



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Promotions

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 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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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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