Posts Tagged ‘margin debt’

Will We Hold It Wednesday – Strong Bounce Edition

What an amazing recovery!  

Just one week ago the World was coming to and end and now everyone has their rally caps back on.  Investors really are sheep – except I think sheep have better memories…  We're still right on plan of dropping 10% and then bouncing 4% (strong bounces) by Wednesday (today) that was initiated on October 6th by our friends at the Fed (see yesterday's post for the summary).  For those of you keeping score, our strong bounce predictions for today were:

  • Dow 16,466 (weak) and 16,632 (strong).
  • S&P 1,878 (weak) and 1,903 (strong).
  • Nasdaq 4,280 (weak) and 4,360 (strong).
  • NYSE 10,360 (weak) and 10,540 (strong).  
  • Russell 1,104 (weak) and 1,128 (strong).

INDU WEEKLYThe Dow is just 17 points away from our goal and we'll just need the NYSE and the Russell to confirm their bounce lines and THEN we can get bullish again.  Meanwhile, we actually got a bit more bearish in our Short-Term Portfolio (also in yesterday's post) as our Long-Term Portfolio popped right back to up 18.1% for the year so we wanted to lock those gains in with the STP, which finished the day up 81.8%, down from 92% in the morning as the markets rocketed.  

If the rally is real, the Dow should have no problem at all popping our 16,632 line – after all, it jumped 234 points yesterday but stopped dead right at our strong bounce line.  The…
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Margin Debt Increases By 30% In 2009, Currently At $231 Billion

Margin Debt Increases By 30% In 2009, Currently At $231 Billion

Courtesy of Tyler Durden at Zero Hedge

Barman's 2009 International Drinks Fair Held In Tel Aviv

The NYSE’s most recent disclosure of margin debt indicates a surge in trading in margin accounts, where total debt shot up to $231 billion as of December, up $58 billion from February or 30%, and also an increase of 4.5% from November. This is an indication that "animal spirits" have surged by about the same amount as the broader market since the market lows: in other words, speculation is now rampant, and, to make things even better, is very much on margin, or leveraged. And we all know what happens when levered speculative bets turn out not quite as expected. For those who may be confused, Dow Jones provides a useful primer of how a margin call feedback loop tend to make things ugly, fast.

A potential pitfall for those trading "on margin" is a sharp decline in stock prices, which can expose investors to margin calls, requiring them to post additional collateral lest their brokers sell their securities to cover the debt. A wave of margin calls can worsen selling pressure on stocks and was seen as partly to blame for the market’s woes in the fall and winter of 2008-09…

But why worry – just like in 2006, every sellside (and in many cases, buyside) model now crashes if you plug in negative growth. At that point, coupled with a blue screen of death, the best outcome is to just reboot the computer and head to the nearest pub for a beer or seventeen. In the meantime, all problems will just resolve themselves on their own: especially if you have $100 trillion in discount window borrowings collateralized with recently defaulted securities from AIG’s worthless portfolio. Oh, sorry, the Fed said ML III is worth at least part. So yes, all is good – Go back to drinking.


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Zero Hedge

This Is How Close US And Russian Jets Are To A Dog Fight Above Syria

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

With Russia now effectively controlling the skies over Syria and with the US chiding Moscow for “targeting” America’s CIA-trained proxy armies, everyone is anxious to know how long it will be before NATO’s F-16s have an actual, live fire run-in with Russian Su-34s. 

As we noted on Monday, the biggest threat here is the close proximity at which everyone is now operating: "What happens next? Well, with the previously discussed Russian naval blockade of Syria as a likely next step, and with both US and Russian warplanes already flying back and forth above Syria, and now both superpowers having a legitimate, if only in the eyes of their own media, justification to dispatch land troops,...

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Kimble Charting Solutions

Germany (DAX)- At critical resistance point, will impact S&P 500

Courtesy of Chris Kimble.

In our opinions the German stock market (DAX) is very important on a global scale. We feel its a driving force for many stock markets around the world.

This leader finds itself at very important price point at this time, which could become a high risk price point.


The DAX has remained inside of clean rising channel since the 2011 lows. It hit the top of its channel earlier this year, attempting a breakout that failed and a 20%+&#...

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Market News

News You Can Use From Phil's Stock World


Financial Markets and Economy

People weren't supposed to be saving this much money — and now it's a problem (Business Insider)

So, let's start with the basic premise: Consumers are not economists.

This means that normal people who have a job and then decide what to do with their hard-earned money often make decisions that economists don't expect.

Vietnam's Communists School Indonesia's Capitalists on Economy (Bloomberg)


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Phil's Favorites

Is Russia Plotting To Bring Down OPEC?


Is Russia Plotting To Bring Down OPEC?

Courtesy of Dalan McEndree at

President Putin’s recent moves in the Middle East—to shore up Bashar al-Assad’s regime in Syria through deployment of combat aircraft, equipment, and manpower and build-out of air-, naval-, and ground-force bases, and the agreement in the last week with Iran, Iraq, and Syria on intelligence and security cooperation—could contribute to Russian efforts to combat the myriad negative pressures on Russia’s vital energy industry.

Live by Energy…

Energy is the foundation of Russia, its economy, its government, and its political system. Put...

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Chart School

Markets Post Gains - Breakout in Dow and Semiconductor Index

Courtesy of Declan.

A fresh day of gains keeps bullish momentum running in healthy action. The Dow was the first index to break past declining resistance established by July - August declining trendline. Volume also climbed to register accumulation.

The Semiconductor Index was another to make a move higher. It cleared declining resistance and the 50-day MA. Better still, it was the first key index to return net bullish in technicals.

This will help the Nasdaq 100 which is ...

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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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Sector Detector: Searching for solid support in the face of global headwinds

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

Courtesy of Sabrient Systems and Gradient Analytics

Uncertainty about the health of the global economy led investors to flee U.S. equities during Q3, primarily driven by worries about China's growth prospects and the Federal Reserve’s decision to not raise rates. Sure, there are plenty of real and perceived headwinds, but on balance it seems that a recession here at home is not in the cards. And when you consider sentiment and the technical picture, it appears that a continuation of Friday’s bounce is in store. The question remains as to whether the seasonally strong Q4 will be able to propel the bulls through levels of resistance that have built up.

In this weekly update, I give my view o...

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Swing trading portfolio - week of October 5th, 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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Some Hedge Funds "Hedged" During Stock Market Sell Off, Others Not As Risk Focused

By Mark Melin. Originally published at ValueWalk.

With the VIX index jumping 120 percent on a weekly basis, the most in its history, and with the index measuring volatility or "fear" up near 47 percent on the day, one might think professional investors might be concerned. While the sell off did surprise some, certain hedge fund managers have started to dip their toes in the water to buy stocks they have on their accumulation list, while other algorithmic strategies are actually prospering in this volatile but generally consistently trending market.

Stock market sell off surprises some while others were prepared and are hedged prospering

While so...

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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. 


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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 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.

Thank you for you time!

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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...

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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.

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