Posts Tagged ‘EWP’

Will We Hold It Wednesday – Dollar Dives to 79, Futures Flat

Let's not make this more complicated than it needs to be

A weak Dollar lifts the markets and, this morning, the Dollar fell from 79.50 at yesterday's close to 79 at 6:45 and that's why, despite earnings disappointments from both INTC and IBM, the Futures are up slightly 3 hours before the open.  As you can see from the chart on the right, to say there's a strong inverse correlation between the Dollar and the S&P is quite the understatement.  Over the longer run – the effect tends to wash out but, over the short run, it's an almost perfect match.  

Of course, this also has a very direct effect on commodity pricing and part of the reason for the Dollar's big sell-off last night was the much-better-than-last-time performance of Barack Obama in the second Presidential Debate as the future of the Fed and all that free money hangs in the balance.  

After the first debate, two weeks ago, Romney clearly won and has made it known that he will kick both Big Bird and Big Ben to the curb as soon as he gets in office – that sent the Dollar up from 79.10 to 80.21 (up 1.4%) last week and dropped the S&P from 1,460 to 1,430 (2%).  After last night, Romney looks to be back off the table and that leaves the Dollar to resume it's downward slope – giving another lift to the markets.  

At the same time, Moody's left Spain's credit rating above junk this morning and that's lifting the Euro to $1.31 and the Pound is moving in lock-step at $1.61 BUT the Yen dropped 0.5% to 78.63 and it's not likely the BOJ will let the Dollar slip below 79 as that makes Toyotas and Sonys more expensive just ahead of the holidays.  Also, the Nikkei finally got back to 8,850 last night and you know they hate to lose that line.  

So get set for some heavy-duty Global Market Manipulation by our Central Banksters as everyone but Europe tries to race for the bottom.  Europe, interestingly enough, doesn't mind a strong currency as they are fuel and goods importers and most of the goods they export are "luxury" class and less susceptible to currency fluctuations.  With strong intra-zone trading the backbone of the EU economy, it doesn't matter where the Euro is trading from that perspective either and, of
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Thursday – World Bank Says Fighting Poverty is an Investment – Ryan’s Head Explodes

image"We don't see the focus on poverty as about charity, but rather about investment in future growth." 

World Bank President Jim Yong Kim outlined his vision of what the multilateral lender should do, focusing sharply on cases of significant poverty.  Dr. Kim said economic-growth expectations were being scaled back everywhere but that he was determined to prevent the substantial gains made by emerging economies over the past decade from being wiped out.  "Every country has to look at its public spending and see what works," he said.

The World Bank had their annual meeting in conjunction with the IMF in Tokyo this week and Dr. Young's message is no longer the opposite of Christine LaGaurd's, who has essentially come around to thinking that austerity is no longer the answer – pushing for debt write-downs for Greece, Portugal and Spain as well as backing Greece's request for two more years to meet its fiscal targets.  “We will spare no time, no effort to actually do as much as we can in order to help Greece,” Lagarde said. The fund’s purpose is “to make sure that Greece is back on its feet, that it can one day return to markets, that it doesn’t have the need for constant support.”  

Meanwhile, Spain was downgraded to one notch over junk (BBB-) with a negative credit watch by S&P last night but it was more of a "buy on the news" event this morning as it's certainly not a shocker that Spain's paper is worthless without the ESM backing.  Yields on 10-year Spanish bonds shot up 9bps to 5.89% but stopping short of 6% was considered a positive.  Spain is the poster child for the idiocy of using austerity to combat debt (ie. the Romney plan) as squeezing the economy by cutting Government spending has actually worsened the country's fiscal position, which has led to calls for greater austerity but these calls come from bankers and bondholders – who just want to get paid, no matter the long-term damage done to the borrowers.

“There is no chance that Spain will hit its targets,” said Megan Greene, director of European economics at Roubini Global Economics LLC, “The deficit targets are economic suicide.’  “Even as you cut, the gap between spending and revenue collection keeps getting larger,” said Jonathan Tepper, a partner at research firm Variant Perception. “We’re
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Wednesday – Stimulus Rumors Trump the APPLocalypse – For Now

AAPL missed!

Fortunately, we were well-prepared for this eventuality as I had said way back on July 10th, in Member Chat, that AAPL was "too big to succeed" (commentary also featured in Stock World Weekly on the 15th).  I also said, at the time regarding AAPL: "Where was my buy point – $555? That's a long way down to support if they fail $600."  We had called for taking the bullish AAPL money and running the previous Thursday (July 5th) in my morning Alert to Members, as they topped out that morning at about $610.  We were a bit early with that call (AAPL hit $619.87 the next week) but, on the whole, our bearish flip on AAPL (and the broader market) has served us well.  

In yesterday's Member Chat, we had one bearish earnings spread on AAPL as well as an aggressive play on SQQQ, the Nasdaq ultra-short, because we expected the Nasdaq to fail along with AAPL (and AMZN is next!) on their earnings.  Our SQQQ trade grabbed the Sept $50/60 bull call spread, offset by short puts on some stocks we are accumulating for our Income Portfolio for a net free trade but our dreams of a big pay-off on the spread will be put on hold today as a sudden burst of stimulus talk has turned the indexes back up, with the Dow now 200 points off the bottom in the Futures (7:50) at 12,660.  

SPY 5 MINUTEI already sent out an Alert to our Members this morning, pointing out what manipulated BS this was as the WSJ's Jon Hilsenrath issued what amounted to nothing more than some well-timed speculation on imminent Fed action into yesterday's close that has been picked up by the MSM as a fact and popped the Dow a full 100 points into yesterday's close – erasing 1/2 of a disastrous day in minutes (see Dave Fry's SPY chart).  At the moment (7:54), the Dow Futures (/YM) make an excellent short below the 12,650 line so excuse me while I hit "publish" on this partial post so our Members can see it.

Anyway, so where was I?  Oh yes, market manipulation by Uncle Rupert and the WSJ is not unexpected with NWS reorganizing and looking for good valuations on the company split.  I pointed out to Members seven other articles in which
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Wednesday – Waiting for the Other Shoes to Drop

EWP WEEKLY What next?

$125Bn for Spain AND they are going to be given 5 years before having to pay back their loans and rumor has it that it will be a 10-year payment period at 3%.  Sure, why not?   At least that way we can pretend they are going to pay everyone back, rather than watch them default just a few months after we lend them the money, like Greece.

As we expected, Italy is the next crisis on deck as their 10-year bond yeilds climb over 6% as Italy's $2.4Tn debt (120% of GDP) running at 6% interest ($144Bn a year = 7.5% of GDP) is going to require a lot more than $100Bn to stop the bleeding.  At the same time, Mr. Monti's tax-heavy austerity measures have choked economic growth, causing Italy's economy to contract 0.8% in the first four months of the year.  

Mr. Monti lashed back at an Austrian minister on Tuesday for questioning whether Italy might need financial assistance to ride out the crisis.  "I find it completely inappropriate that representatives of other governments in the European Union are talking about the situations of other countries," Mr. Monti said during a news conference, adding that his government was "continuing to work to guarantee the financial stability of the euro zone."

Clearly the honeymoon is over for Monti with a poll last week finding that only half of Italians supported political parties that form Mr. Monti's parliamentary majority, down from 63% two months ago. Confidence in Mr. Monti among those surveyed fell to 34%, compared with 71% when Mr. Monti took office.  The steady erosion of public support for Mr. Monti's government is also prompting some politicians to question whether Mr. Monti can still push through the tough changes demanded by EU leaders.

You can see from the chart on the left what a tremendous drag the global markets (down 12.5% in a year) are becoming on the S&P (down 2.5%).  If nothing is going to happen to snap the Global markets up – well, you do the math…

SPY 5 MINUTEThat math is keeping us Cashy and Cautious in this horribly choppy market and it's a good thing as we've been flip-flopping like…
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Fall Down Friday – JPM’s Face Plant Might Give Us A Bottom

1,488 more years!

That's right, who cares about JPM and their little $2Bn mistake when a new Mayan calendar has been discovered that goes all the way to the year 3,500?  That kind of puts JPM's loss in perspective as it's only $1.34M per additional year to get back – hardly seems worth mentioning, does it?  

I'm certainly not going to talk about it because it's as silly as planning the end of the World around a calendar that was carved into a rock (and now we know they simply ran out of rock or 2012 would not have been the end).  JPM MAKES $18Bn a year – much of it from trading.  That trading is not without risk – so of course they will have the occasional loss.   There is nothing about JPMs loss that indicates an industry-wide problem – other than highlighting the generally insane levels of risk that our TBTF Banksters take on a daily basis.  

FXI WEEKLYWhat we SHOULD be concerned about is systemic problems in TBTF Nations such as China, where April Industrial Production rose at the slowest pace since 2009, Retail Sales are also slowing and, worst of all, Fiscal Revenue grew at just 6.9%, down sharply from 18.7% in March.  India's Industrial Production fell 3.5% in March vs a 1.7% gain expected by "experts" like the idiots at JPM who bet on Global Markets making new highs in May and lost their assets.  Meanwhile, the EC says the EU is in a "mild recession," with the Eurozone GDP forecast to contract 0.3% this year and, hopefully, expand 1% next year while running a 3.2% deficit in 2012.

Contracting 0.3% while spending 3.2% more than you have is not a "mild recession" folks – it's a catastrophe that is being paved over by tons of QE and other stimulus.  Not like America, where our $1.4Tn deficit is close to 10% of our GDP and that's how we can expand by 2% – see Europe, you just don't know how to spend your way to prosperity!  

Bernanke spoke to a group of senators yesterday about the potential harm to the economy from the expiration of several pro-growth policies, according to senators who attended the meeting. Bernanke…
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Monday Market Meltdown – Global Wheeee Edition

Now THIS looks a little more realistic, doesn't it?

Last Monday we pointed out that the run-up, that was coming DESPITE a myriad of Fundamental negatives we were tracking, was essentially a load of crap aimed at bringing in more suckers before they pull the rug out from under the market.  To keep ourselves from getting sucked in by the hype, we drew some very simple lines across our mult-chart which were 50% retacements of the month's dip.  Not making those lines during last week's actions kept us from making poor decisions as the market hype continued all week.  My warning was:  

"How many times will the bulls be sucked in by the same empty promises?  How many times will they reach into their pockets and BUYBUYBUY the snake oil valuations sold by the Reverend James Cramer?

Tuesday I got a lot of sheeple angry by calling them sheeple for falling for Cramer and the rest of the Mainstream Media hype and we discussed a few of our hedges that were working already, like TZA, TLT and SQQQ as well as two that were still playable:  CAT May $95 puts at $1.10 – up just 15% from our initial entry and DXD May $12 calls at $1.35, up just 12% from when our Members got the Trade Idea.  Despite the market moving up, I reiterated my sell-off targets of Russell 775 and S&P 1,325.  

Wednesday we tried to find reasons to be bullish, presenting both sides but judgment was once again for the bears after weighing the evidence as I pointed out that the lack of economic improvement for the bottom 90% could not be ignored – something Nick Sarkozy just discovered this weekend.  In the morning post, I mentioned going back to the well and shorting oil again as it dared to reach for $104.50 again – another lovely pay-off last week and we caught it again this morning at $103.50 (/CL Futures) for a quick $500 per contract – so far.  

Thursday we were having great fun and we had a bullish spread on CHK
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Monday Morning: Might Moody’s, Merkel & Meltdowns Matter?

[GERPOL]Oh, where to begin this morning?  

We already covered "Big Trouble in Little Tokyo" in our Weekend Reading post so we’ll just say things are still sucking in Japan.  The Nikkei lost 0.6% in this morning’s trading but it was Angela Merkel who lost control of Germany this weekend as nuclear concerns gave a huge victory in a state election to the Green (environmental) party who, along with the Social Democrats (what it sounds like) now control 47.1% of Germany’s coalition-based Government vs just 44.3% held by Merkel’s Christian Democrats and her allies in the Free Democrat party

As a stand-alone, Germany’s GDP is about $3.5Tn, the World’s 4th largest economy, behind Japan’s $5.4Tn (maybe less at the moment) and China’s $5.8Tn and, of course, our $15Tn juggernaut of an economy.  Together with the EU, however, Germany is part of a $16Tn economic union where it is followed by France ($2.5Tn and Sarkozy also took an electoral hit this weekend!), Italy ($2Tn), Spain ($1.4Tn) and then you drop down to The Netherlands at $770Bn.  We know what kind of shape Italy and Spain are in so keep in mind that it’s Germany and France who run the EU – no matter who is "in charge."  

Moody’s put another nail in Spain’s coffin this morning, downgrading 30 Spanish banks by one or more notches.  Interestingly, they left STD and BBVA alone  and I’m liking STD with their 9% dividend as money is likely to be drawn away from the smaller banks and moved to the relative safety of STD.  STD is trading at $11.94 and they can be covered with Sept $11 calls at $1.60 for a net $10.34 entry or paired with the sale of the Sept $11 puts at $1.05 to drop the basis to $9.29.  That gives you a net on the buy/write at $9.29/10.14, which is a 15% discount if put to you at $10.14 or called away with an 18% profit if called away at $11 in 9 months – PLUS the 9% annualized dividend!  

Not surprisingly, Germany and the rest of the EU rushed through the final approval of their now $987Bn bailout fund as that was the number one issue that was crushing Merkel’s party and it’s not entirely sure Germany will have the will, going forward, to commit any more capital.  The agreement requires 80Bn euros…
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Weekend Wrap-Up, Still Trying to Get Bullish

Writer's BlockI’m having writer’s block this weekend

Usually when I can’t think of what to write it helps me to go over our virtual portfolios so I started this morning reviewing the Buy List but I didn’t get far because it was silly.  Of 43 plays on the buy list, 39 are doing well – too well in fact to the point where it’s hard for me, in good conscience, not to say let’s kill the whole thing and get back to cash as we’re up about 20% in 2 months and that’s just ridiculous – most people would call that a good year and go on vacation

The Buy List was 100% bullish and we did catch a good bottom on our early February entries.  I was gung ho bullish then because I felt comfortable that the 10,000 line on the Dow would prevail and that we were good for a run back to the top (10,700), following, more or less, the pattern we had in 2004 (see original post for charts).  Well that’s pretty much what’s happened since then but that’s not making me happy because I see no reason we won’t complete that pattern and begin falling off a cliff shortly.

As you all know, I’m not a big fan of TA, or patterns for that matter but the reason I started looking for patterns was to try to get a handle on how long  market could really keep going up before falling victim to exhaustion.  To me it seemed we weren’t at that point on Feb 6th but now that we’ve put in that big push back up – if we can’t punch up to new highs on all our indexes then I do think it’s time for the markets to take a break.

 

Clearly I’ve been too bearish for the past couple of weeks and we are now 224 points over 10,400 on the Dow which is where I turned bearish as the January data made me lose faith in our ability to get back to 10,700.  I should have stuck to the TA because we’re a lot closer to 10,700 than we are to 10,400.  With the Russell and Nasdaq exploding to their own new highs.  You can see though, from the above chart, why I do want to wait to see the NYSE, Dow and S&P confirm this move up – it’s not far now!
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Zero Hedge

Global Stocks Slide As Dollar Continues Rising: Has The "Pricing In" Of Trump Begun

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

While there was no unexpected overnight central bank announcement unlike yesterday's surprise by the RBA which unleashed volatility havoc in the FX market, which promptly spilled over into all asset classes, overnight stocks around the world saw another leg lower without a tangible catalyst, while EM currencies fell to a one-month low after two Fed presidents raised concern investors had become too complacent in their belief that U.S. interest rate raises will stay on hold. Or perhaps all that is happening is that after ignoring Trump, the market i...



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Phil's Favorites

China Warns Economists, Analysts, Reporters About "Overly bearish" Remarks

Courtesy of Mish.

I remain in “awe” of China-loving proponents who believe the Yuan will soon supplant the US dollar as the world’s reserve currency on the way to becoming the world’s top economic power.

By soon I mean a “decade” or less. It’s not going to happen.

Centrally planned bogus economies, with tiny illiquid bond markets, huge capital controls, pegged currencies, and no freedom of speech are no way suitable for such lofty expectations.

One can make such comments here, in China, you are in trouble.

Please consider China Presses Economists to Brighten Their Outlooks.

...



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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

Seven big banks settle U.S. rate-rigging lawsuit for $324 million (Reuters)

Seven of the world's biggest banks have agreed to pay $324 million to settle a private U.S. lawsuit accusing them of rigging an interest rate benchmark used in the $553 trillion derivatives market.

Here's What Usually Happens to Stocks in Years Like 2016 (Bloomberg)

Despite the huge comeback in the S&P 500, investors remain skeptical of...



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ValueWalk

2016 Sohn Conference: Schreiber, Robbins, Einhorn, Druckenmiller, And More [LIVE]

By Jacob Wolinsky. Originally published at ValueWalk.

The 2016 Sohn Conference starts on Wednesday (May 4th) at David Geffen Hall, Lincoln Center 10 Lincoln Center Plaza New York City. As is our custom at ValueWalk we will be providing in-depth coverage of the most anticipated event of the year. The line up this year once again does not disappoint.

Note – we will post all links to our coverage on this page so just bookmark it or sign up for our free newsletter– also we will post the schedule once it is up

Sohn Investment Conference 12:00PM – 5:30PM

Here are the speakers

  • Larry Robbins, Glenview capital
  • David Einhorn, Greenlight Capital
  • Zach Schreiber, Poinstate Capital
  • ...


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Chart School

Market Recap May 3, 2016

Courtesy of Blain.

Indexes gapped down at the open on weaker than expected Chinese manufacturing data, and buyers never really showed up Tuesday.  The S&P 500 finished off 0.87% while the NASDAQ dropped 1.13%. In China, a private gauge of nationwide factory activity in China fell to 49.4 in April, indicating a faster pace of contraction and missing analyst forecasts.

“I don’t see one lever pushing everything. It’s a combination of again more of that risk-off, valuations a little extended, earnings did come in a little better (but still declining), concerns coming out of weaker PMI numbers pointing to lackluster growth,” said Tim Dreiling, senior portfolio manager with the Private Clie...



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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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Kimble Charting Solutions

DAX Index (Germany) - Leading indicator pulling S&P down with it?

Courtesy of Chris Kimble.

Over the past 12-15 months, the majority of global stock markets have been in a down trend, creating a series of lower highs and lower lows. The German Stock market peaked around 6-weeks ahead of the S&P 500 last year and could be considered a global trend leader, creating a domino effect.

Below updates the pattern in the DAX index-

CLICK ON CHART TO ENLARGE

The DAX index remains inside of long-term rising channel (A), no doubt ...



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Digital Currencies

Is Craig Wright The Creator Of Bitcoin? Frisby and Matonis On 'Satoshi Nakamoto'

Courtesy of ZeroHedge. View original post here.

Is Craig Wright The Creator Of Bitcoin? Frisby and Matonis On ‘Satoshi Nakamoto’

By Mark O'Byrnewww.GoldCore.com 

Craig Wright, an Australian computer scientist, self-declared cyber security expert and entrepreneur, has claimed to be the creator of Bitcoin, the elusive &l...



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OpTrader

Swing trading portfolio - week of May 2nd, 2016

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

PRGO, VRX and an Overpriced Papa

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

By Ilene 

Remember this? It was Monday. PRGO is down from around $130 to under $100 since I started following it LAST WEEK. That's down almost 25% in a week, and almost 50% in the last year. So I wrote, 

"Perrigo CEO Joseph Papa leaves Perrigo (PRGO) to lead Valeant (VRX) while PRGO issues a warning about missing earnings expectations. Not surprisingly, PRGO stock plummeted today. 

Robert Ingram, Chairman of the [Valeant] Board, stated, "The Board has conducted a thorough search process and believes that Joe is the ideal leader for Valeant at this time. He has a strong shareholder orientation,...



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Mapping The Market

About that debate last night

Although we try to stay focused on finding and managing promising trade ideas, the comments in the comment section sometimes take a political turn (for access, try PSW — click here!). So today, Jean Luc writes,

The GOP debate last night was just unreal – are these people running to be president of the US or to lead a college fraternity! Comparing tool size? The only guy that looks semi-sane is Kasich. The other guys are just like 3 jackals right now. 

And something else – if Trump is the candidate, that little Romney speech yesterday is probably already being made into a commercial. And all these little snippets from the debate will also make some nice ads! If you are a conservative, you have to be scared now. 

Phil writes back,

I was expecting them to start throwing poop at each other &n...



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Promotions

PSW is more than just stock talk!

 

We know you love coming here for our Stocks & Options education, strategy and trade ideas, and for Phil's daily commentary which you can't live without, but there's more!

PhilStockWorld.com features the most important and most interesting news items from around the web, all day, every day!

News: If you missed it, you can probably find it in our Market News section. We sift through piles of news so you don't have to.   

If you are looking for non-mainstream, provocatively-narrated news and opinion pieces which promise to make you think -- we feature Zero Hedge, ...



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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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