Greece is getting another $229Bn at 3.5% with about 30 years to pay it from the EU(ie. Germany and France) and private bond-holders will share about 1/3 of the pain by "voluntarily" renegotiating their own notes. Sounds like a really great offer, right? BUT WAIT, THERE’S MORE! Another $630Bn of already promised emergency aid has now been places into a very slushy fund that will now allow the EU to throw money at any nation that so much as sneezes – WHETHER OR NOT THEY ASK FOR ASSISTANCE. This will allow them to play economic Whack-A-Mole, putting out all the little Euro-zone fires until that money runs out (about 6 months at the EU’s current burn rate).
All this fantastic news from Europe has sent the Dollar down to test the 74 line and that was down from 75.37 just ahead of yesterday’s open and that’s a 1.8% drop so we would expect our indexes to go up at least 1.8% – BUT – none of them did. In fact, the Nasdaq only gained 0.72% and the Russell was up 1.07% and the Dow was up 1.21% and the S&P was up 1.35%. The NYSE, which had been our perennial laggard, did the best yesterday – gaining a close, but still no cigar 1.57%.
Will we make it up today or is this an indication that things may not be quite so good as they seem? After the close yesterday, I did a news round-up for our Members and there is still plenty to worry about and we took a stab at some SPY Weekly (today) $135 puts at .79 for our aggressive $25K Virtual Portfolio on the off-chance they "fix" the US debt ceiling and accidentally make the Dollar strong again. At the moment, we are still playing our short lines in the futures, where we’ve been scalping nickels and dimes since my 3:23 am Alert to Members (if you are not a Member, you can sign up here), where I said:
I like shorting the Futures here: S&P (/ES) at 1,346, Nas (/NQ) 2,415, Dow (/YM) 12,720 and Rut (/TF) 842.6 – as long as 74.20 hold on the Dollar, we should get a bit of a sell off so these are levels to look for as the Dollar heads back over that line but we can scale
The S&P 500 is now down around 7% on the year. Is the very long-term bull market still in play? Yes it is!!!
The chart below looks at the NYSE Composite on a monthly basis, dating back to 1965.
CLICK ON CHART TO ENLARGE
As you can see, since the mid 60’s, the NYSE composite has remained inside of rising channel (A). The last time the top of the channel was touched was in the late 1990’s and the last time the bottom of the channel was touched took place back in 2009.
Despite the quick down turn of late, this long-term rising channel remains in ta...
Size does matter you know. There are basketball players, NFL linemen, and the more popular but unmentionable allusion to the bedroom that makes my point, although the older one gets, the more irrelevant playing basketball and football become, if you get my drift. More interesting to me than any of the above, however, is the application of size and its relevance to the animal kingdom. Randy Newman raised eyebrows and a goodly number of hackles three decades ago with his “Short People” ditty – “Short people got no reason, short people got no reason to live” he crooned, and the verti...
August 6-month lows have had a tendency to be broken in the coming months, prior to a year-end bounce.
After getting kicked in the teeth in August, the stock market is starting out September by getting stomped on the head. Following the historic rebound to end last week, investors were hoping that the worst was behind them. As we noted regarding such rebounds yesterday, however, perhaps we should not be surprised by renewed weakness. And adding further evidence to support the ...
China’s stock markets continue to stumble, despite the massive stimulus that the government has unleashed to prop them up. The Shanghai benchmark index fell by 1.23 percent Tuesday, after closing down slightly Monday. The index has fallen by nearly 40 percent from its mid-June peak.
After the late recovery last week, sellers again made markets their home. Sizable losses were accompanied with higher volume distribution, although volume was down on earlier panic. Another pass at August lows looks likely.
The S&P is again heading to the 10% 200-day MA envelope. Relative performance is shifting away from Large Caps to more speculative indices, which is bullish in a rising market, but in a falling market suggests a lack of sanctuary.
The Nasdaq is also in the early stages of a retest of the August low. Technicals are weak, although stochastics crept above the bullish mid-line, but not enough to suggest ...
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The dark veil around China is creating a little too much uncertainty for investors, with the usual fear mongers piling on and sending the vast buy-the-dip crowd running for the sidelines until the smoke clears. Furthermore, Sabrient’s fundamentals-based SectorCast rankings have been flashing near-term defensive signals. The end result is a long overdue capitulation event that has left no market segment unscathed in its mass carnage. The historically long technical consolidation finally came to the point of having to break one way or the other, and it decided to break hard to the downside, actually testing the lows from last ...
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
Naysyers are warning that the recent plunge in Bitcoin prices - from almost $318 at its peak during the Greek crisis, to $221 yesterday - is due to growing power struggle over the future of the cryptocurrency that is dividing its lead developers. On Saturday, a rival version of the current software was released by two bitcoin big guns. As Reuters reports, Bitcoin XT would increase the block size to 8 megabytes enabling more transactions to be processed every second. Those who oppose Bitcoin XT say the bigger block size jeopardizes the vision of a decentralized payments system that bitcoin is built on with some believing ...
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).
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.
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...
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 firstname.lastname@example.org 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.
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