Posts Tagged ‘S&P’

Monday: Clear Proof of Massive Market Manipulation

SPY 5 MINUTERemember this?  

Sure you do, this was Friday's intra-day chart of SPY, the ETF that tracks the performance of the S&P 500.  It's pretty similar to what happened every day last week, with a high-volume (relatively) sell-off followed by a recovery on almost no volume into the close, giving us the impression that the markets are flat

Only Friday was a bit different.  On Friday, the market manipulators were so desperate to close the week on a high note and so greedy, that they also got sloppy and now we have some very clear evidence of what complete and utter BULLSHIT this market is:

What do we see here?  Despite a 0.45% rise in the S&P and a 0.39% rise in the NYSE, 0.4% in the Dow,  0.45% in the Nasdaq and 0.25% rise in the Russell, the FACT is that there were FAR MORE shares DECLINING than there were advancing.  In fact, on the NYSE MKT (what used to be called the AMEX), declining volume outpaced advancing volume by 115%.  115%!  Yet we get a 0.4% RISE in the index?  

On the NYSE itself, 2,079 stocks declined while only 1,057 (33%) of the stocks advanced and there was 56% more volume to the declining shares than the advancing shares yet, MIRACULOUSLY, 160 NYSE stocks made new 52-week (and, often, all-time) highs while just 30 made 52-week lows.  That's 84% positive!  Isn't that amazing?  Isn't that UNBELIEVABLE???  

It is unbelievable, as in – something that should not be believed by intelligent people.  When you see a magician on stage sawing a woman in half or levitating – you might be amazed at what a good trick it is but you don't start believing in magic, do you?  What if that magician asks you to bet your retirement on the fact that he is really levitating people or that his assistant can medically be cut into pieces and reassembled?  

You wouldn't risk your money on such obvious fakery, would you?  You wouldn't give your hard-earned money to a person whose job it was to…
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Which Way Wednesday – Japan’s GDP Plunges 6.8%

MORE FREE MONEY!!!  

That's all this chart says to traders this morning, who are taking the European Markets up over half a point this morning and are goosing our Futures by half a point as well as bad news is good news and TERRIBLE news is even better in this Central Bank-sponsored market.

Private Consumption in Japan fell 5% in April, May and June and wages dropped 1.8% while sales taxes rose 3% and – PRESTO – there's your 5% decline in Private Consumption.  

Obviously, giving the workers more money is out of the question in a Conservative Capitalist Economy like Japan and we're certainly not going to tax Corporations when we can raise sales taxes that disproportionately target the poor instead so the only solution is:  MORE FREE MONEY!!!

Japan has increased their monetary base by 50% since last year and this year they are on track to add another 25% to pump it up to 270,000,000,000,000 Yen.  In March of 2000, there were just 50Tn Yen in circulation so a 5x increase in the money supply and NONE of it ended up in the hands of the bottom 80% who, just like in America, saw their standard of living DECREASE over the past decade and a half.  

It's a great race to the bottom in annual GDP growth overall as essentially all of the economic gains in Japan and the US accrue to the top 10% (people and corporations) while the bottom 90% circle the drain on the "Road to Serfdom" that Hayek warned us about 70 years ago:

“It is one of the saddest spectacles of our time to see a great democratic movement support a policy which must lead to the destruction of democracy and which meanwhile can benefit only a minority of the masses who support it. Yet it is this support of the tendencies toward monopoly which make them so irresistible and the prospects of the future so dark.

"If we face a monopolist we are at his absolute mercy. And an authority directing the


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Tempting Tuesday – Lead Us Not Into Betting on Bounces

"Forgive us our debts, as we have also forgiven our debtors."

Hah – what a crock!  How many people who have recited that prayer have forgiven any debts?  How many have had debts forgiven?  Certainly none of the G20, who owe each other tens of Trillions of Dollars and certainly not Argentina's bondholders, who drove the nation to default and certainly not the bondholders of THREE Atlantic City Casinos that are on the verge of shutting down and putting 10,000+ people out of work in a county of 275,000 so about 5% of the working population.

Are casinos simply a bad business or is the economy not quite as strong as we are led to believe?  

In the past 14 years, we have more than tripled the debt of the first 224 years of our nation's existence and, in the next 7 years, we are on track to add 150% more (than the $5Bn we had when Clinton left office).  

The $2.4Bn Revel Casino opened in March of 2012 and was $1.5Bn in debt at the beginning of 2013 but did a pre-packaged bankruptcy last year that cut the debt to $272M but it's been hemorrhaging money since and the value of the casino has been slashed to $450M yet an auction scheduled for yesterday got ZERO bidders, which may now lead to yet another bankruptcy – making it an annual event.  

This is no run-down property, this is a beautiful, modern building that LOOKS like $2.4Bn was spent to build it.  It's a beautiful property with nice restaurants and great rooms and a nice beach and a swim out pool on the deck so you can use it even in the winter – no expense was spared but, like many grand projects, the cash flow isn't there to support the great dreams of the creators

Even at $450M, if you could sell the 1,400 rooms (57 floors) into condos and got $300,000 for 1 bedroom apartments, that's only $420M and wouldn't be worth the effort.  So, if you can't do that and you need 3,800 people to run the casino/hotel – that's a pretty big nut to cover each month.  The casino loses roughly $3M per…
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Monday Markets are Meaty, Beaty, Big and Bouncy!

 

"Thruppence and sixpence every day
Just to drive to my baby

I don't care how much I pay (Too much, Magic Bus)
I wanna drive my bus to my baby each day (Too much, Magic Bus)

I don't want to cause no fuss (Too much, Magic Bus)
But can I buy your Magic Bus? (Too much, Magic Bus) " – The Who

This is certainly one Magic Bus of a market, flipping on a dime or, more accurately, bouncing off the Dow's 200 day moving average at 16,350 back towards our predicted strong bounce line at 16,650.  The Transports are also bouncing right off the 100 dma at 142, down from 152 and. per our 5% Rule™, we expect 146 to be tested this morning.  This is not "surprising", this is what we said would happen on Friday morning.  

As we discussed all of last week, BALANCE is the key in a choppy market and our Long-Term Portfolio finished Friday at $590K, up exactly 18% for the year, while our Short-Term Portfolio jumped to $136,000, up 36% for the year and together they are $726,000, up over 20% for the year on our two primary virtual portfolios.  

8-9-2014 12-05-11 AM DIAHaving well-balanced portfolios allowed us to ride out the dip and, in fact, buy more longs while the market was pulling back, rather than panicking out of positions that, for the most part, only went down with the market – rather than because there was any actual weakness in the stock.  

Our general strategy of Being the House – Not the Gambler is also a great help in consistently making progress in our portfolios, even when the market has such a choppy week.  

For most traders, it's "thruppence and sixpence every day" just to hold on to their positions as they gyrate up and down.  As sellers of premium, we own the Magic Bus and we collect those daily pennies instead of selling them and that acts as a tremendous buffer to our long-term investing, where simply hanging on to a position allows us to collect another day's rent!  

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PSW Wrap-Up Show for the Week

We have a new episode of The Wrap-Up Show.

This time, it’s a quick review of the week’s activity:

Also, as we have a ton of Government Data that will be driving the markets next week, let’s review "How the US Government Manipulates Inflation Data" – just so we remember not to take it all too seriously.  


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A Turning Point in Early September? (DIA, SPY, ETFs)

A Turning Point in Early September? (DIA, SPY, ETFs) 

Courtesy of John Nyaradi, of Wall Street Sector Selector

Autumn leaves arranged in flower shape on lawn

[Take a free trial to Wall St. Sector Selector here.]

All summer long we’ve been locked in a wide trading range that extends roughly from a low of 1020 on the S&P 500 to a high of 1120.  Now with the calendar turning to autumn, mid-term elections close at hand and having arrived at a significant technical juncture, it seems likely that new forces will serve to push the markets in a decisive manner in one direction or other. 

Looking at My Screens 

On a technical basis, the sharp three day rally last week pushed the S&P 500 back up to strong resistance levels around the 1100 mark with the widely watched 200 Day Moving Average just ahead at 1116. 

Less widely watched is the Point and Figure Chart of the S&P 500 that is displayed below.

Chart courtesy of stockcharts.com 

Starting at the top, the black arrow highlights the pattern is in a bearish configuration, expecting lower prices ahead with a price objective of 942.85 and so the point and figure chart is on a “sell” signal.

More significantly, it has also broken below the upward trending blue bullish support line and this indicates a very significant trend change from bullish to bearish.  

These changes in trend are very rare and very significant as the red and blue lines tend to act like walls in the path of the columns of Os and Xs. 

You can see the last such change highlighted by the arrow at the lower left of the chart which occurred shortly after the beginning of the huge rally last March, and this uptrend has been in place until just this month when the uptrend was broken by the column of Os descending to 1040. 

Now we’ve seen a retracement rally that has brought the last column of Xs back up to 1104 and the base of the new red bearish resistance line.  This line also corresponds almost exactly to the 200 day moving average. 

So now the situation is quite clear.  A break above the red bullish resistance line would represent a significant trend change back to the positive while failure
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26 of Last 88 Trading Days have been 90% Days (Either Up or Down); 7 More Lean Years in Stock Market?

26 of Last 88 Trading Days have been 90% Days (Either Up or Down); 7 More Lean Years in Stock Market?

Courtesy of Mish 

computer tradingHere is an interesting snip from August 31 Market Commentary by Art Cashin for UBS. Sorry, no link.

Monday’s market evaporated nearly all the gains from Friday’s rally. Despite lighter volume, it was a 90% down day. That means the bears got a lopsided advantage in negative breadth and negative volume. In Friday’s rally, the bulls had had a similar 90% advantage. Robert McHugh of Main Line Investors says 26 of the last 88 trading days have been 90% days – one way or another. Any wonder the public is wary.

Are these 90% Days a Good Thing?

While the big boys push the market around, small investors have thrown in the towel and are not coming back.

Market volume now consists of black boxes pushing all stocks one way or the other on 30% of the days. Is this a good thing? For who? Investors or Goldman Sachs?

Holding the Line

Today, the 1040 level on the S&P held for about the 8th time on "fabulous" news consumer confidence rose to 53. Bear in mind number in the 70′s are typical of recession lows.

How long the 1040 level can hold is a mystery, but each bounce seems to be weaker and weaker.

Last Friday, I noted Market Cheers 1.6% Growth; Treasuries Hammered; while asking "what’s next?"

We have a partial answer already. Treasuries have regained the entire selloff that started (and ended) on the "great news" that 2nd quarter GDP was +1.6% instead of the expected +1.4%. Never mind that growth was revised down twice from above +2.5% to +1.6%.

Looking ahead, I expect GDP to be negative in the 3rd quarter.

Art Cashin’s 17.6 Year Cycles

A little over a year ago Art Cashin commented Dow Trapped in 17-Year Cycle

Art Cashin, director of floor operations at UBS Financial Services, offered CNBC his stock-market insights. Cashin decried the idea of a second stimulus, in light of the "infamous" first attempt.

"There was no ‘stimulus’ in the stimulus package. It was mostly social engineering," Cashin said. Thus, talk of a new plan is shaking markets with fears of even more debt — with "nothing to show for it."

Cashin revisited his theory of "the 17.6-year cycle."

"It’s like the Biblical story of the fat


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Goldilocks and the 300,000,000 Bears

Talk about feeling outnumbered!

As the guy in Airplane kind of said – "Looks like I pricked the wrong week to get bullish!"  Of course, as I often tell people I am neither bullish nor bearish – I'm rangeish – and our range is the 5% band between around Dow 10,200 and S&P 1,070, which takes us as low as Dow 9,690 and S&P 1,016 and as high as Dow 10,710 and S&P 1,123 before I really "flip flop" my positions.  Despite the fact that this is the range we predicted last October and is the range we've been in (other than a brief trip to 11,200, which we shorted the hell out of) all year – people still seem to find it necessary to call me either bullish or bearish as we navigate the channel.

I suppose I have been HOPEFUL for the month (now heading into day 14) that we will finally make a little progress and establish a higher floor at our usual mid-points while, at the same time, the MSM have decided that we are all going to die.  That does make me kind of bullish by comparison doesn't it?  We are mainly in cash and we are well hedged to the downside so, unless we are REALLY heading much, much lower, there is little profit in speculating to the downside, other than our quick trades.  As PT Barnum once said:

"A man who is all caution, will never dare to take hold and be successful; and a man who is all boldness, is merely reckless, and must eventually fail. A man may go on "’change" and make fifty, or one hundred thousand dollars in speculating in stocks, at a single operation. But if he has simple boldness without caution, it is mere chance, and what he gains to-day he will lose to-morrow. You must have both the caution and the boldness, to insure success." 

Balance is the key to long-term success and we've had many conversations about that in Member Chat.  Our goal is to be neither bullish or bearish but rather to sell premium to both the bulls and the bears when conditions permit us.  As Ravalos said Friday in Member Chat:

"Ever since I became member (actually before I became member I


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Wanted: One Cool Customer

Wanted: One Cool Customer

Courtesy of Joshua M Brown, The Reformed Broker 

Different market environments call for different temperaments, and this tape calls for One Cool Customer.  The cross-currents lately are absolutely cartoonish – back-to-back-to-back triple digit rallies while each morning we are treated to fresh evidence of Slouching Housing, Hidden Consumer.

A lot of pros were washed out at the bottom this month when the 8 or 10 month moving averages that they use as stops were violated.  Right on cue, the S&P rallied 6% off those lows during July, almost out of spite.  The frustration is palpable and people are getting heated.

What to make of it all?  I don’t know about you, but I’m looking for cool heads and calm direction – so I’m reading a lot of Leigh Drogen lately on his Surfview Capital blog.

You may know Leigh from the StockTwits stream.  He is in this market, not just discussing it.  And Leigh Drogen is cooler than Lenny Kravitz in February.

Based on his writing, it appears that he’s back to playing his momentum faves and making mental room for the possibility that the tape is, in fact, getting "healthier"…

It’s hard to sit through pullbacks, but as Jesse Livermore said, the real money is made by sitting, not by coming and going.  The last two days have been a tough chop fest where you really don’t want to be trading.  I took off a decent amount of long exposure yesterday morning at the top, but not enough to keep me from looking at my book today and cringing, just a little.  Even when you know what’s about to take place, and that your plan is to let it happen and buy into it, watching your P&L move against you is never fun.  Today my second largest position, and what is a normal position size in $WPRT is down 10%, not fun.  Other than that, everything is acting predictably soft, consolidating nice gains from the past week or so.  We’re not playing for peanuts this time as has been the case the past three months.  It’s time to make some real money as the market has become a bit healthier.  Raise your stops along the way and buy the pullbacks.

Whenever sentiment and the direction of the market diverge so drastically as is the case now, the key is to stay cool.  For smart, emotionless…
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Chinese Banks Face Default Risk on 23% of $1.1 Trillion Loans; Chinese Rating Agency Criticizes Moody’s, Fitch, S&P

Chinese Banks Face Default Risk on 23% of $1.1 Trillion Loans; Chinese Rating Agency Criticizes Moody’s, Fitch, S&P

Courtesy of Mish 

Here is an interesting pair of stories at odds with each other, the first article is about problem loans at Chinese banks, the second is about a rating agency mud fight.

Bloomberg reports Chinese Banks See Risks in 23% of $1.1 Trillion Loans

Chinese banks may struggle to recoup about 23 percent of the 7.7 trillion yuan ($1.1 trillion) they’ve lent to finance local government infrastructure projects, according to a person with knowledge of data collected by the nation’s regulator.

About half of all loans need to be serviced by secondary sources including guarantors because the ventures can’t generate sufficient revenue, the person said, declining to be identified because the information is confidential. The China Banking Regulatory Commission has told banks to write off non-performing project loans by the end of this year, the person said.

The nation’s five-largest banks, including Agricultural Bank of China Ltd., plan to raise as much as $53.5 billion to replenish capital after the sector extended a record $1.4 trillion in credit last year.

“In China now, it is the same as the people getting loans in Phoenix here in the U.S. three years ago,” said Vikas Pershad, chief executive officer of Chicago-based Veda Investments LLC. “People who want money get money, and then they all lose track of it.”

Local governments set up the financing vehicles to fund projects such as highways and airports due to limits on their ability to directly borrow money. The central government this year restricted borrowing on concern money isn’t being used for viable projects.

“The issue is symptomatic of the way the stimulus package was rolled out in 2008,” said Nicholas Consonery, Asia specialist at the Eurasia Group. “It is difficult for local governments to finance these projects. It is written under the Chinese constitution that local governments cannot offer their own debt.”

Chinese Rating Agency Criticizes Moody’s, Fitch, S&P

The Financial Times reports China rating agency condemns rivals

The head of China’s largest credit rating agency has slammed his western counterparts for causing the global financial crisis and said that as the world’s largest creditor nation China should have a bigger say in how governments and their debt are rated.

“The western rating agencies are politicised and highly ideological and they


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Phil's Favorites

You Have Five Choices

 

You Have Five Choices

Courtesy of

The negatives:

The US stock market is now selling for close to a record high valuation. Volatility for the S&P 500 is currently registering record low readings. Brilliant hedge fund managers like David Einhorn are ringing the alarm bells over the worship of growth stocks without earnings. Warren Buffett’s Berkshire Hathaway is sitting on a $90 billion cash hoard, struggling to find reasonably valued assets to invest it in. Bonds are no bargain given today’s yields vs inflation, and that’s assuming rates are just steady – if they rise more quickly than e...



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Zero Hedge

Swedish Government On Verge Of Collapse After Admitting 'Accidental Leak' Of Entire Nation's Info

Courtesy of ZeroHedge. View original post here.

Sweden’s government is being quietly rocked by a major scandal. So far the market has paid it little regard, but, as Citi warns, it may soon escalate...

Sweden appears to have accidentally leaked the details of almost all of its citizens. And now it's getting worse as the leak happened in 2015, but only emerged las...



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ValueWalk

Warren Buffett Goes Into Genius Mode!

By VW Staff. Originally published at ValueWalk.

Check out the top times that Warren Buffett goes into Genius mode!

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Words Of Wisdom From Charlie Munger (Part 3) Want to become a better investor, reading is crucial ...

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Chart School

U.S. Dollar; Triple support test after rare 30-week decline

Courtesy of Chris Kimble

From 2011 to the start of this year, the US$ has been pretty strong, as it rallied nearly 30% in 6-years. Over the past 30-weeks, King Dollar has been rather weak.

Below looks at the US$ over the past 18-years, with 30-week performance applied-

King Dollar has declined over 9% in the last 30-weeks at (1). As one can see, this sharp of a decline in 30-weeks hasn’t taken place a ton of times since the late 1990’s. The decline has the US$ testing the bottom of a 24-month trading range and two rising support lines at the same time at (2...



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Digital Currencies

Bitcoin (BTC/USD) Consolidating Near All-Time High Ahead of Aug 1 Fork

Courtesy of ZeroHedge. View original post here.

Bitcoin (BTC/USD) Weekly/Daily

Bitcoin (BTC/USD) slid yesterday on more profittaking, and now sits just above where it had broken above the daily chart's downchannel resistance. On the weekly chart, with last week's massive rally, the BTC/USD appears potentially to be in the late stages of a bullish flag pattern. With the August 1st fork looming, and daily RSI, Stochastics and MACD tiring, BTC/USD can be expected to continue consolidating today ahead of this key date. Although the negative weekly MACD crossover has proved a false signal for now...



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Insider Scoop

3 Reasons Comcast Should Acquire Verizon, And Why This Cost Dish A Downgrade

Courtesy of Benzinga.

Related CMCSA Analyst Says 31 Million Homes Could Cut Cord On Legacy Media; New Study Shows 64% Of U.S. Households Now Stream Programs ...

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Biotech

Biologics: The pricey drugs transforming medicine

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

 

Biologics: The pricey drugs transforming medicine

Courtesy of Ian HaydonUniversity of Washington

The cells inside this bioreactor are the real pharmaceutical factories. Sanofi Pasteur, CC BY-NC-ND

In a factory just outside San Francisco, there’s an upright stainless steel vat the size of a small car, and it’s got something swirling inside.

The vat is stud...



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OpTrader

Swing trading portfolio - week of July 24th, 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 ...



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Members' Corner

Why we need to act on climate change now

 

Why we need to act on climate change now

Interview with Jan Dash PhD, by Ilene Carrie, Editor at Phil’s Stock World

Jan Dash PhD is a physicist, an expert at quantitative finance and risk management, and a consultant at Bloomberg LP. In his thought-provoking book, Quantitative Finance and Risk Management, A Physicist's Approach, Jan devotes a chapter to climate change and its long-term systemic risk. In this article, Ilene interviews Jan regarding his thoughts on climate change and the way it can affect our futu...



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Mapping The Market

The App Economy Will Be Worth $6 Trillion in Five Years

Courtesy of Jean-Luc

This would be excellent news for AAPL and GOOG to a lesser extent although not inconsequential:

The App Economy Will Be Worth $6 Trillion in Five Years 

In five years, the app economy will be worth $6.3 trillion, up from $1.3 trillion last year, according to a report released today by app measurement company App Annie. What explains the growth? More people are spending more time and -- crucially -- more money in apps. While on average people aren't downloading many more apps, App Annie expects global app usership to nearly double to 6.3 billion people in the next five years while the time spent in apps will more than double. And, it expects the...



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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...



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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...



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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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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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