Posts Tagged ‘Productivity’

Weakening Wednesday – Can Yellen Save the Day?

SPY 5 MINUTEI told you so!  

All of last week, I kept saying the market was only hitting highs because it was being manipulated that way and, by Friday we'd had enough and took our ill-gotten gains off the table once again.  This week, it's obvious we're in trouble – but it's a lot harder to sell your stocks when they're already in trouble, isn't it?

It's a very hard discipline to take winners off the table but you should scale out of posiitons on the way up the same way you should scale into them on the way down (and the Strategy Section at Philstockworld has a great article about scaling – also lots of additional commentary in chat below the article).  

There's nothing wrong with being in cash.  Yesterday, from 1pm until 2:30, we had on of our Live Futures Trading Workshops (replay available here) and our 4 trades made $360 by the close (4pm) for a very nice $100+ per hour salary for just trading a few contracts.  Our trade idea from yesterday's morning post (which you can get delivered to you pre-market, every day by SUBSCRIBING HERE) was to short the Nikkei (/NKD) at 14,350 and this morning we hit 14,050 – good for a $1,500 PER CONTRACT profit!  

SPX WEEKLYThat's one of the things you can do with cash.  We also have fun making earnings plays, like the FSLR trade we added to our Short-Term Portfolio yesterday.  That trade idea was:

I think it's worth a try at selling 5 July $75 calls for $3 ($1,500) and buying, to cover, 4 Jan $77.50/85 bull call spreads at $2 ($800) for a net credit of $700 – let's do a set of those in the STP

If FSLR is under $75 (it's about $69 after earnings), we pocket $700 PLUS whatever value remains on the January bull call spread (probably about half).  That's against zero cash outlay ($700 credit, in fact) and possibly we'll just take quick money off the table…
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Soaring Corporate Profits As US Worker Pay for Productivity Hits Record Lows

Soaring Corporate Profits As US Worker Pay for Productivity Hits Record Lows

Courtesy of JESSE’S CAFÉ AMÉRICAIN

Two sets of charts tell the story. 

The problem is that when workers are pressed to the wall on pay they lose the ability to consume without taking on debt. And at some point the debt leverage mechanism for consumption breaks down.

Perhaps the problem is related to the one Wall Street is now confronting. How do you continue on in business after having impoverished, alienated, or driven away most of your clientele in the heat of a short term greed enabled by a corrupted political and regulatory system? 

Those who were around in the late 1970′s will recall the absolute disrepute in which equities were held by the public after the grinding bear market of 1973-74. Pit traders spent the better part of the day practicing their origami skills, for lack of serious ‘outside participation.’ Skinning each other when you have run out of greater fools is truly a zero sum game.

Weather report: Cloudy, with a chance of whirlwinds.

Fat profits, slim wages: the fruits of monetary bubbles and trickle down economics.


 

Charts courtesy of ContraryInvestor


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The Last Chapter

The Last Chapter 

Courtesy of John Mauldin at Thoughts From The Frontline 

Two people climbing rope to birdcage containing goose and golden egg

The Last Chapter 
Let’s Look at the Rules 
Six Impossible Things 
Killing the Goose 
Home and Then Europe

This week you will get a kind of preview as this week’s letter. I am desperately trying to finish the first draft of my book and am one chapter away from having that draft. I have promised my editor (Debra Englander) that she would see a rough draft next week, and the final version will be delivered on the last day of September. More on that process for those interested at the end of the letter. But this week’s letter will be part of what will probably be the 4th or 5th chapter, where we look at the rules of economics.

There is just so little writing time left that I have to focus on that book for a little bit. I am writing this book with co-author Jonathan Tepper of Variant Perception (who is based in London), a young and very gifted Rhodes scholar with a talent for economic analysis and writing. We each write the first draft of a chapter and then go back and forth until the chapter has been much improved. Alas, gentle reader, you will only get my first draft. You will have to wait for the book to get the new, improved version. But this is the last one I have to write. And Jonathan has done all his initial chapters. We are on the home stretch.

But first, my partners at Altegris Investments have written a White Paper entitled "The New Normal: Implications for Hedge Fund Investing." It is a very instructive read. If you are in the US and have already signed up for my Accredited Investor letter, you should already have been sent a link or a copy. If not, and you are an accredited investor (basically net worth of $1.5 million or more) and would like to see the paper, or are interested in learning more about how hedge funds, commodity funds, and other absolute-return strategies might fit into your investment portfolio, I suggest you click on www.accreditedinvestor.ws and fill out the form, and a professional will get back to you. And if you live outside the US and are interested, I have partners around the world who can work with…
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Temporary Census Workers Discover Productivity Means Less Money

Temporary Census Workers Discover Productivity Means Less Money

Courtesy of Jr. Deputy Accountant 

In the kind of ;gotcha! that’s been a trademark of this particular recession, temporary Census workers have discovered that their productivity has, in fact, worked against them. A larger pool of available workers means more talent in the pool, more talent means a better work ethic and a better work ethic means work gets done promptly, meaning checks evaporate weeks ahead of schedule, leaving these workers out of work once again.

WSJ:

Just as the 2010 census has been a boon for unemployed workers, the high unemployment rate has been a boon for the Census Bureau, bringing in skilled temporary employees who are eager to work. "The labor force that we’ve attracted to work on the census has a set of skills, experience and commitment to the job that exceeds all our experiences in the past," said Census Bureau director Robert Groves.

Because the temporary work force is more productive, the bureau is closing some offices earlier than it planned. Mr. Groves anticipates that will shave $170 million off the original $2.2 billion budget for door-to-door operations.

That’ll teach you to be productive. 


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Six Impossible Things

Six Impossible Things

Opening Night Of FIDM Exhibit For Walt Disney Studios Alice In Wonderland

Courtesy of John Mauldin 

Six Impossible Things 
Delta Force 
Reduce your Deficits! 
Pity the Greeks 
Should the US Bail Out European Banks? 
Italy at Last!

Alice laughed. "There’s no use trying," she said" One can’t believe impossible things."

"I daresay you haven’t had much practice," said the Queen. "When I was your age, I always did it for half-an-hour a day. Why, sometimes I’ve believed as many as six impossible things before breakfast."

- From Through the Looking Glass by Lewis Carroll

Economists and policy makers seem to want to believe impossible things in regards to the current debt crisis percolating throughout the world. And believing in them, they are adopting policies that will result in, well, tragedy. Today we address what passes for wisdom among the political crowd and see where we are headed, especially in Europe.

I am reminded of the great line from the movie, The Princess Bride. Vizzini is the short bad guy who is trying to get away from Westley and every thing he attempts does not work. Westley just keeps on coming. At each failed attempt, Vizzini mutters, "Inconceivable." Finally, Vizzini has just cut the rope and The Dread Pirate Roberts (Westley) is still climbing up the cliff.

Vizzini: HE DIDN’T FALL? INCONCEIVABLE.

Inigo Montoya: You keep using that word. I do not think it means what you think it means.

European leaders keep telling us that the break-up of the eurozone is inconceivable. I do not think they know what that word really means. Let’s see if I can explain the problem so that even a politician can understand.

But first, and quickly. We have transcribed the speeches from my recent 7th Annual Strategic Investment Conference I put on with my US partners Altegris Investments. To say they were awesome is somewhat of an understatement. If you have registered for my free accredited investment letter, you should already have gotten a link or will get one soon to the speeches. David Rosenberg, Dr. Lacy Hunt, Paul McCulley, Niall Ferguson, Jon Sundt, Jason Cummins, Gary Shilling and your humble analyst. That is a world class line-up.

If you are an accredited investor (basically $1.5 million net worth) and have not yet signed up for my letter, then go to www.accreditedinvestor.ws and do so now. One…
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Thursday – Greece is the Word

Greece is the word these days.

 

 

We are getting a sell-off every morning as Europe goes through the daily ritual of waking up and seeing the cost of default protection rise and rise.  This morning Greece is with STUPID (Spain, Turkey, UK, Portugal, Italy & Dubai – coined by Zero Hedge) as five-year sovereign credit default swap spreads were recently at 4.23 percentage points, compared with Wednesday's closing level of 3.97 percentage points. That means the annual cost of insuring €10 million of Greek government debt against default for five years had risen €26,000 to €423,000.  In a nutshell, that's 4.23% annually to insure Greek bonds from default so Greece needs to offer 4.23% more interest on their bonds than an Aaa nation to attract investors

Of course, my new "I'm with STUPID" T-shirt franchise is going like gangbusters as we are getting orders from all over the US, especially California, as our own triple-A credit rating may not last the year.  Japan is a strong customer (mostly small and extra-small) and sales are strong in France and, of course, Mexico and all of South America.   

Keeping up with the STUPIDs is no easy feat as Portugal's CDS spreads jumped 15% overnight to an all-time high 2.26 while Spain gained 10% to 1.68%.  (Have I mentioned I like TBT lately?)  The moves followed news Wednesday that the European Commission had put Greece under more pressure to cut its deficit; that the Portuguese government sold only €300 million of treasury bills at an auction, compared with an indicative offer of €500 Million; and that the Spanish government had raised its budget deficit forecasts for 2010 through 2012. 

As we expected in yesterday's post, Greek workers were none too pleased with the EU's budget plan for their country and is rejecting the idea of wage freezes on top of wage cuts.  Greece's biggest union is moving towards a mass strike and the public-employee union is planning a job action next week as well.  Tax collectors are striking, customs workers are striking, which is screwing up the airports and shipyards and delaying commerce all over Europe – shades of things to come perhaps?

Napoleon said: "A revolution is an idea which has found its bayonetes" and John Kennedy said: "Those who make peaceful revolution impossible will make violent revolution inevitable" and
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Testy Tuesday Morning

Our levels are holding so far

We came right back to 1,000 on the S&P yesterday but it held like a champ and that gave us the confidence to take a bullish cover on our longer DIA protective puts, right at 3:04, ahead of the usual 50-point stick save but it was a move we initiated right at the bottom at 2:30, catching almost the dead bottom on our roll.  Of course it's total nonsense but it's total nonsense we can count on with 8 stick saves of at least 50 points in the last 90 minutes coming in the last 10 market sessions accounting for 400 points of Dow gains or ALL of our gains since July 20th when we "broke out."

As illustrated in David Fry's SPY chart, the only exceptions to the stick save were the last two Fridays and I said to members in yesterday's chat, perhaps that is somehow significant that the collective we call "Mr. Stick", does not feel confident enough to make bullish plays into the weekend anymore.  Today we should head right back to re-test 1,000 on the S&P but we are much more bearish overall, having taken profits yesterday and covered our unrealized gains in our $100KP - the plan we discussed in yesterday's morning post.

We got a re-test and a re-failure of the Russell at exactly our 574 target right at 11:15 and the the Qs never even mounted a serious threat on our 40 line so it wasn't a tough call for us in the morning.  The other levels we are watching, Dow 9,297, S&P 1,000, Nasdq 2,017, NYSE 6,438, Russell 562 and SOX 308, are looking shaky and may not stand up to another test, especially if we get any bad news on our upcoming data with Wholesale Inventory and Productivity Reports on deck this morning.  Our bearish additions were an ERY spread (3x Energy bear) and COF Sept $40 puts, which are already up 10% from our 12:17 pick.  It wasn't all negative, we liked a couple of buy/write plays and we took a very bullish spread on FRE, which should do very well this morning.  At 12:57 we had noticed FRE moving up and, in Member Chat, we were discussing the merits and my take was this:

FRE/Ifl – The float of FRE is just 650M shares and they


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Chart School

Indices Net Positive Technically

Courtesy of Declan.

There wasn't much to say about to about today as Indices worked on consolidating the last couple days of gains. The real action came from supporting technicals, as they looked to mark a shift from a generally bearish technical picture to a net bullish one.

The S&P got to resistance of what was looking a reversal head-and-shoulder pattern.  This pattern won't be negated until 2,111 is breached, but today's action is a step in the right direction.  The only negative is the continued relative under performance against Small Caps.

...

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Zero Hedge

Caption Contest: Spot The Odd G-7 Leader Out

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

The G-7 "committee to think and talk about saving the world but which will actually end up doing nothing at all" meet in Sendai this weekend. Can you spot the odd one out?

While Merkel chose not to wave... or smile; it is Jean-Claude Juncker that appears to be having trouble with his salute...


...

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Phil's Favorites

Suspicion Sets In; Obama Sounds Like Trump; We're All Bernie Sanders Now!

Courtesy of Mish.

The US is suspicious of UK prime minister David Cameron and his trade policies with China.

Well why not? But the reverse is true as well. The UK has every reason to be suspicious of president Obama.

Such is the nature of trade politics where every country every country is out for itself.

There is really nothing new about this, but I will point out that massive trade disputes are hallmarks of deflationary times.

The Financial Times reports Cameron Adds to Pressure on China Over Maritime Disputes.

David Cameron arrived at the Group of Seven summit in Japan on Wednesday and added his voice to pressure on China to abide by inter...



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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

Stock futures slightly higher as economic data awaited (Business Insider)

U.S. stock index futures were slightly higher on Thursday, after the S&P 500 posted its strongest two-day run since early March, and as investors await data to gauge the economy's strength.

Oil tops $50, lifts commodity stocks but Fed, China weigh (Reuters)

Brent crude oil topped $50 a barrel for the first time in nearly seven months on Thursday lifting commodity and energy-related shares in Europe and Asia though ...



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ValueWalk

Donald Trump will be good for economy But bad for Wall Street: David Rosenberg

By Jacob Wolinsky. Originally published at ValueWalk.

Donald Trump will be good for economy, bad for Wall Street: David Rosenberg

Published on May 25, 2016

Live from the 2016 Strategic Investment Conference

Get the latest updates live from the sold-out 2016 Strategic Investment Conference with John Mauldin, Richard W. Fisher, David Rosenberg, James Grant, Niall Ferguson, George Friedman, Pippa Malmgren, Charles Gave, Neil Howe, and many more. Click go to following link to visit the conference’s live blog:

Some highlights

Hello, everyone who has joined us on the second day of SIC 2016. It’s going to be a long and exciting day. Today, we’ll hear speeches from George Friedman, Lacy Hunt, David Rosenberg, and other well-known financial and political experts. We’ll also do video interviews with each speaker, and all of th...



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Kimble Charting Solutions

S&P 500- Bull Flag potentially in play, breakout about to happen?

Courtesy of Chris Kimble.

Has the S&P 500 formed a “Bullish Flag Pattern” and making an attempt to breakout? Possible. If you are not familiar with the pattern, see more details HERE.

CLICK ON CHART TO ENLARGE

Unless one lives under a rock, you are well aware that that bulls nor bears have anyth...



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OpTrader

Swing trading portfolio - week of May 23rd, 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

The Biggest Bitcoin Arbitrage Ever?

Courtesy of Chris at CapitalistExploits

Do you remember when you were growing up and all your friends were allowed Atari game consoles but you weren’t?

Well, I do and the things seemed as foreign to me as Venus. Mostly because the little time I managed to spend on the gaming consoles when my friends weren’t hogging them I found it all a bit silly. I never “got” computer games, and to this day still have poor comprehension of things like Angry Birds.

I suspect that many people around the world view Bitcoin in the same way as I view Angry Birds: with mild amusement and a general lack of understanding as to what the hell all the fuss is about.

I was thinking of this since a buddy of mine recently started ...



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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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Biotech

This Is Why Biotech Stocks May Explode Again

Reminder: Pharmboy and Ilene are available to chat with Members.

Here's an interesting article from Investor's Business Daily arguing that biotech stocks are beginning to recover from their recent declines, notwithstanding current weakness.

This Is Why Biotech Stocks May Explode Again

By 

Excerpt:

After a three-year bull run that more than quadrupled its value by its peak last July, IBD’s Medical-Biomed/Biotech Industry Group plunged 50% by early February, hurt by backlashes against high drug prices and mergers that seek to lower corporate taxes.

...



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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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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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