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…
continue reading


Tags: , , , , ,




 
 
 

Phil's Favorites

Why it matters when big tech firms extend their power into media content

 

Why it matters when big tech firms extend their power into media content

Courtesy of David HesmondhalghUniversity of Leeds

Shutterstock

A major shift is taking place in global media. Until recently, tech corporations were mainly involved in distribution rather than production. But now, instead of simply delivering TV shows, music and films onto our devices and screens, major firms are sinking huge amounts of money into the content itself.

The herald of this change was Netflix. Here was a tech company ...



more from Ilene

Biotech

The two obstacles that are holding back Alzheimer's research

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

 

The two obstacles that are holding back Alzheimer's research

Courtesy of Todd GoldeUniversity of Florida

Family members often become primary caregivers for loved ones with Alzheimer’s disease. tonkid/Shutterstock.com

Thirty years ago, scientists began to unlock the mysteries regarding the cause of Alzheimer’...



more from Biotech

Zero Hedge

Back-To-Back Hindenburg Omens

Courtesy of ZeroHedge. View original post here.

About a week ago, we warned about the infamous bearish stock market pattern developing in US equities coined by some as the ‘Hindenburg Omen’. The pattern is known for its bearish tendencies developed after the Hindenburg disaster of 1937. The key understanding is breadth deterioration, when more stocks hit 52-week lows than 52-highs. Since the warning, a liquidity gap has developed in stocks thwarting any attempt at new all time highs.

...



more from Tyler

Digital Currencies

The blockchain does not eliminate the need for trust

 

The blockchain does not eliminate the need for trust

Courtesy of Dirk BaurUniversity of Western Australia and Niels Van QuaquebekeKühne Logistics University

Central authorities are still important to create legitimacy in a cryptocurrency. Shutterstock

A common idea about the blockchain, the technology that powers Bitcoin and other cryptocurrencies, is that it can “...



more from Bitcoin

Chart School

When does this all end - Update2

Courtesy of Read the Ticker.

To buy or not to buy: The US 10 year versus high yielding utility stocks.

Previous Post: When does this all end - Update

The US 10 year yield is at 2.34%

And compared to utility dividend stocks ...

American Water Works (Dow Jones Utility: AWK) dividend @ 1.87%
NI Source (Dow Jones Utility: NI) dividend @ 2.58%
American Electric Power (Dow Jones Utility: AEP) dividend @ 3.25%

The question is, which asset class do you trust to provide a return for 10 years? Of course your ability to judge future inflation expectations (see TIP for iShares TIPS Bond ETF) and how extende...

more from Chart School

Insider Scoop

10 Stocks To Watch For November 17, 2017

Courtesy of Benzinga.

Related AMAT 8 Stock's Moving In Thursday's After-Hours Session 12 Stocks To Watch For November 16, 2017 ...

http://www.insidercow.com/ more from Insider

ValueWalk

Robert Mugabe Under House Arrest, Military Takes Control Of Zimbabwe

By Andjela Radmilac. Originally published at ValueWalk.

Zimbabwe’s head of state, 93-year-old Robert Mugabe, has been placed under house arrest after what seems to be a military coup took place in the nation’s capital.

By U.S. Navy photo by Mass Communication Specialist 2nd Class Jesse B. Awalt/Released [Public domain], via Wikimedia CommonsRobert Mugabe is safe

Following numerous reports on social media late Thursday night about the increased military presence in Harare, the capital of Zimbabwe, the country’s military took...



more from ValueWalk

Members' Corner

An Interview with David Brin

Our guest David Brin is an astrophysicist, technology consultant, and best-selling author who speaks, writes, and advises on a range of topics including national defense, creativity, and space exploration. He is also a well-known and influential futurist (one of four “World's Best Futurists,” according to The Urban Developer), and it is his ideas on the future, specifically the future of civilization, that I hope to learn about here.   

Ilene: David, you base many of your predictions of the future on a theory of historica...



more from Our Members

Mapping The Market

Puts things in perspective

Courtesy of Jean-Luc

Puts things in perspective:

The circles don't look to be to scale much!

...

more from M.T.M.

OpTrader

Swing trading portfolio - week of September 11th, 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 ...



more from OpTrader

Promotions

NewsWare: Watch Today's Webinar!

 

We have a great guest at today's webinar!

Bill Olsen from NewsWare will be giving us a fun and lively demonstration of the advantages that real-time news provides. NewsWare is a market intelligence tool for news. In today's data driven markets, it is truly beneficial to have a tool that delivers access to the professional sources where you can obtain the facts in real time.

Join our webinar, free, it's open to all. 

Just click here at 1 pm est and join in!

[For more information on NewsWare, click here. For a list of prices: NewsWar...



more from Promotions

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...



more from Kimble C.S.

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...

more from David



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...

Learn more About Phil >>


As Seen On:




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 >>