Posts Tagged ‘allocation’

Post-Crash Dynamics

Post-Crash Dynamics

post-crash dynamics, half full or half emptyCourtesy of John P. Hussman, Ph.D.

The U.S. economy lost a quarter of a million jobs in July. Meanwhile, over 400,000 workers abandoned the labor force (and are therefore no longer counted among the unemployed), which prompted a slight decline in the unemployment rate despite the job losses. In the context of an economy still strained by high levels of consumer debt and still record delinquency and foreclosure rates, labor market conditions are still troublesome. Still, the pace of job losses and new unemployment claims has clearly softened from the pace we observed early in the year.

If we knew that this was a standard economic downturn, we might conclude that the recent improvements are durable. However, nothing convinces us that this is a standard economic downturn. As for market action, the major indices have generally been strong, as has breadth (as measured by advances versus declines), but the “investor sponsorship” evident from trading volume has been uncharacteristically dismal compared with initial advances of past bull markets. So here too, we have very strong concerns that the recent advance may not be as durable as investors appear to believe.

All of that said, we aren’t inclined to fight even what we view as errant analysis, and the Strategic Growth Fund has about 1% of assets allocated to near-the-money index call options – about enough to gradually close down about 40% of our hedge in the event that the market advances markedly higher from here, but without putting us at risk of much loss in the event of failure. With investors now anticipating and pricing in a sustained economic recovery, as well as a spectacular earnings rebound (see Bill Hester’s piece – Earnings Growth Forecasts May Require a Robust Economic Recovery – additional link below), a lot of things will have to go right from here in order to sustain higher prices than we currently observe.

Frankly, our call option allocation here is something of a paean to a notion – a sustained economic recovery and new bull market – that I have no belief in whatsoever. But at this point, the broad strength in the major indices, even lacking volume sponsorship or favorable valuation, requires that we allow for the possibility of additional investor speculation. Even if we do observe such an outcome, it’s difficult to envision that the S&P 500…
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ValueWalk

Learn Warren Buffett's Simple Psychological Trick To Being Persuasive

By VW Staff. Originally published at ValueWalk.

Warren Buffett is one of the most famous investors alive. Here’s one psychological trick he uses to get others focused on his intended message.

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Phil's Favorites

Press Secretary Spicer Resigns Following Vehement Disagreement With Trump

Courtesy of Mish.

If nothing else, Trump provides entertainment value for comedians and bloggers.

This morning, we learned press secretary Sean Spicer Resigns as White House Press Secretary following a huge dispute with Trump over communications.

Sean Spicer, the White House press secretary, resigned on Friday after denouncing chaos in the West Wing and telling President Trump he vehemently disagreed with the appointment of the New York financier Anthony Scaramucci as c...



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Zero Hedge

"The Swarm Effect": Every Trader Today Has Just Two Choices

Courtesy of ZeroHedge. View original post here.

Few have dedicated as much time and effort into explaining the behavioral aspects of trading in a time of central planning (or "metastability") as Deutsche Bank's whimsical derivatives-philosopher, Aleksandar Kocic.

Three weeks after becoming the first Wall Street strategist to quantify (and qualify) the concept of market "compla...



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Digital Currencies

Bitcoin (BTC/USD) Nears All-Time High on Spike Above Daily Chart Downchannel Resistance

Courtesy of ZeroHedge. View original post here.

Bitcoin (BTC/USD) crushed shorts yesterday, smashing above the daily chart's downchannel resistance and soaring towards the all-time high around 3000. With yesterday's massive rally, the negative weekly MACD crossover has been proved a false signal.  Odds are quite good that a sustainable longer term BTC/USD bottom was found last week, especially with ETH/USD also strongly rebounding this past week.  Some consolidation can be expected today with daily RSI and Stochastics tiring, although with daily MACD just having positive...



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Insider Scoop

Bank Of America Says Expectations For Groupon Are Still Too High

Courtesy of Benzinga.

Related GRPN Benzinga's Option Alert Recap From July 18 Watch These 7 Huge Call Purchases In Monday Trade ...

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Chart School

Small Caps Breakout

Courtesy of Declan.

It has taken a few days for Small Caps to make their move but today was the day the Russell 2000 joined other indices in mounting a breakout. It was a clean breakout supported by positive technical strength - putting to bed the June 'bull trap'. Watch for the second round of stop-whips with an intraday move (and recovery) below 1,430.


Other indices added to their breakouts. The S&P gapped and pushed on, backed by higher volume accumulation. Watch for a tag of upper channel resistance.

...

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Members' Corner

Why we need to act on climate change now

 

Why we need to act on climate change now

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

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



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OpTrader

swing trading portfolio - week of July 17th, 2017

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

 

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

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

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

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



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Biotech

Immunotherapy: Training the body to fight cancer

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

 

Immunotherapy: Training the body to fight cancer

Courtesy of Balveen KaurThe Ohio State University and Pravin KaumayaThe Ohio State University

An oral squamous cancer cell (white) being attacked by two T cells (red), part of a natural immune response. ...



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Mapping The Market

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

Courtesy of Jean-Luc

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

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

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



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Promotions

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Kimble Charting Solutions

Brazil; Waterfall in prices starting? Impact U.S.?

Courtesy of Chris Kimble.

Below looks at the Brazil ETF (EWZ) over the last decade. The rally over the past year has it facing a critical level, from a Power of the Pattern perspective.

CLICK ON CHART TO ENLARGE

EWZ is facing dual resistance at (1), while in a 9-year down trend of lower highs and lower lows. The counter trend rally over the past 17-months has it testing key falling resistance. Did the counter trend reflation rally just end at dual resistance???

If EWZ b...



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All About Trends

Mid-Day Update

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

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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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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