Posts Tagged ‘Lehman-like action’

CREDIT MARKETS CONTINUE TO WAVE THE WARNING FLAG

CREDIT MARKETS CONTINUE TO WAVE THE WARNING FLAG

Courtesy of The Pragmatic Capitalist

Caribbean Reef Sharks

One of the primary reasons for our move to sell equities in mid-January was the warning shot the CDS market was sending.  Specifically, we said:

As the problem of debt refuses to go away and in fact, quietly spreads, we’ve seen another slow development over the course of the last few weeks – problems in Greece appear to be worse than originally expected and credit default swaps are sending warning messages again.  The term structure in Greek CDS recently inverted as investors are now increasingly concerned of a default in the next few months.  This is something we saw in 2008 before the financial markets nearly collapsed.  That time the inversion was in Lehman Brothers and Merrill Lynch CDS.

As the problems in the banking sector unfolded in late Summer 2008 the sovereign debt of the big three developed nations began to skyrocket before reaching a crescendo in early 2009.  What’s alarming with the situation in Greece is the similarities in CDS price action.  The recent uptick could be serving as a warning flag of things to come in 2010 and 2011 when the problem of debt has potential to rear its ugly head again.  Barclays might not have been too far off when they said the probability of a crisis would grow in 2010.

Well, this situation has only worsened in recent weeks and the equity markets have dipped over 5% since our “must sell” signal.  Jim Reid at Deutsche Bank is reiterating the concern we expressed several weeks ago that this is looking increasingly similar to the action in the markets heading up to the Lehman bankruptcy:

“The danger for every risk asset beyond IG credit is that if higher quality assets see forced re-pricing then it surely has to impact the riskier end of markets. The situation is increasingly reminding us of August/September 2008 when the credit market was sending out a strong sell signal to the equity market. Failing a quick sovereign bail-out, the credit markets are sending out a similar sell signal.”

Reid goes on to note that the markets appear to be accelerating what the governments hoped they could heal with time.  In essence, we’ve put all our…
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ValueWalk

Berkshire Hathaway Adds to its $6 Billion Stake in Phillips 66

By Dr. David Kass. Originally published at ValueWalk.

In an SEC Form 4  filing after the market closed on August 24, Berkshire Hathaway reported that it added $55 million to its stake in Phillips 66 (NYSE: PSX) on August 22, 23, and 24 at $77.04 – $78.16 per share.  Berkshire Hathaway now owns 79.5 million shares of PSX, representing 15.1% of its outstanding shares.  Berkshire’s PSX investment is valued at $6.2 billion at the August 24 closing price on the New York Stock Exchange of $77.68. Berkshire recently added $250 million to its stake in PSX from May 19 – June 13, 2016.  Previously, Warren Buffett had disclosed that PSX was his investment and not that of his portfolio managers Todd Combs and Ted Weschler....



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Zero Hedge

Frontrunning: August 25

Courtesy of ZeroHedge. View original post here.

  • Stock futures lower as countdown to Yellen speech begins (Reuters)
  • Italy quake death toll nears 250 as rescuers search demolished towns (Reuters)
  • Central bankers eye public spending to plug $1 trillion investment gap (Reuters)
  • Chelsea Clinton Plans to Stay on Board of Family Foundation (...


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Phil's Favorites

How Long Will It Take for the ECB to Own All Sovereign Debt of Spain, Germany, France?

Courtesy of Mish.

Huky Guru on Guru’s Blog posted a chart that answers the question: How Long Will it Take For the ECB to Own All Sovereign Debt of Eurozone Countries?

At the current rate of purchase of sovereign bonds the ECB will have have purchased all sovereign debt issued by Spain in 9 years and Germany in 8.8 years.

Bond Market Distortion

Distortion in the corporate bond market has ...



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Chart School

Modest Selling

Courtesy of Declan.

Yesterday's buying likely caught shorts out, but later weakness may have encouraged profit taking today. The damage was relatively light and only served as a warning.

For example, the S&P didn't lose breakout support and selling volume was light


The Nasdaq did see more selling to finish with a distribution day. The index finished on its 20-day MA, which it last saw in a convergence in June and was followed by a successful bounce.

...

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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

German Economy Held Back by Weakest Services Growth in 15 Months (Bloomberg)

Germany’s economy lost some momentum this month as manufacturing cooled and the services sector posted its weakest performance in 15 months.

The US Has A Huge Rate Of Whites In Incarceration (But Nobody's Talking About It) (Zero Hedge)

Data provided by PrisonStudies.org is helping shed light on America&rsq...



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Kimble Charting Solutions

Gold & Silver Miners potentially kissing resistance

Courtesy of Chris Kimble.

Below looks at the oldest miners index in the states, XAU index, over the past decade. The XAU index looks to be kissing potentially important resistance levels at this time.

CLICK ON CHART TO ENLARGE

All mining indices are up strong this year and all remain well below 2011 levels. Is the rally this year, nothing more than a counter trend rally in a long-term down trend? Not ...



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Biotech

Epizyme - A Waiting Game

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

Epizyme was founded in 2007, and trying to create drugs to treat patient's cancer by focusing on genetically-linked differences between normal and cancer cells. Cancer areas of focus include leukemia, Non-Hodgkin's lymphoma and breast cancer.  One of the Epizme cofounders, H. Robert Horvitz, won the Nobel Prize in Medicine in 2002 for "discoveries concerning genetic regulation of organ development and programmed cell death."

Before discussing the drug targets of Epizyme, understanding epigenetics is crucial to comprehend the company's goals.  

Genetic components are the DNA sequences that are 'inherited.'  Some of these genes are stronger than others in their expression (e.g., eye color).  Yet, some genes turn on or off due to external factors (environmental), and it is und...



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OpTrader

Swing trading portfolio - week of August 22nd, 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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Digital Currencies

Man Who Introduced Millions to Bitcoin Says Blockchain Is a Bust

 

Man Who Introduced Millions to Bitcoin Says Blockchain Is a Bust 

By  at Bloomberg

Excerpt:

Stefan Thomas, who introduced millions of people to bitcoin, has had a change of heart.

Blockchain, the ledger software that makes the digital currency possible...



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Mapping The Market

Illusion of Choice

From Jean-Luc:

Looks like we are down to about 10 companies for our consumer goods:

http://www.visualcapitalist.com/illusion-of-choice-consumer-brands/

Just like banks, airlines and cable companies! 

The Illusion of Choice in Consumer Brands

Explore the full-size version of the above graphic in all its glory.

If today’s infographic looks familiar, that’s because it originates from a well-circulated report that Oxfam International puts together to show consolidation i...



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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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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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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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