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  1. Phil

    Incomes/Rev – Good catch and yes, white is the "new green" these days as it's a miracle to simply not lose ground in today's labor market.  When Hayek wrote "The Road to Serfdom" during WWII, it was his view that centralized planning led to Totalitarianism but that's a product of the time in which it was written, as people sought to explain how the World had gone so mad.  But all the "evils" of centralized planning are just as present in the Corporate Kleptocracy we have devolved into as they ever were under Fascist regimes of his time.  Hayek's main point was that, in Socialist societies, the will off a small minority would be imposed upon the people but that's exactly what happens now in America, where a powerful few control the masses, who are merely given the false choice between two flavors of the same status quo at election time.  In fact, Hayek himself said that such systems require effective propaganda for people to believe the stat's goals are their own. 

    Anyway, I bring that up because I was arguing with some guys last night who were quoting Hayek to attack the "Socialist" Obama but it goes back to that whole Conservative brain thing where, just because Hayek used the word "Socialist" at the time, doesn't mean it has anything to do with the modern concept of Socialism in the same way the the Union of Soviet Socialist Republics are not quite the same brand of "Socialism" as the modern EU.  

    3am/Dawn – I'm often up at 3am and I'm all caught up on my Tivo so what's a fella to do?  I will be mindful of your multi-faceted trading strategies as I do then to be a little over-cautious when asked about trade ideas as most risks are not for most traders.  Of course, you have to realize also that, when I do answer your question, sometimes I'm making a general point to all who read it and it's not aimed specifically at you, as I do realize you are a pro trader but, as you note, even pro traders get burned so consider me a sounding board offering a word of caution and not the absolute arbiter of your trade ideas. 

    As to my trading approach – it too varies with my overall long and short-term outlook for the markets in general and for each stock so trying to peg down "rules" is not very productive as the only real rule I have is trying to minimize risk and maximize reward on each trade and THEN trying to be right more often than I'm wrong.  If you combine that approach with reasonable cash management – you can become very wealthy over time!  

    You are absolutely right that it is the best time to buy long calls – IN THEORY – as the VIX is low but the 2015 VIX is not low, only the short-term VIX that you see and, if we are highly expectant of floating up due to inflation and an improving economy, then why not sell puts, which are nearly a sure-thing, vs buying calls, where you pay your premium and take your chances.  Again, I'm generally conservative so if we look at INTC, for example, which is trading at $21.58, it's very easy to make a case that they SHOULD be trading at $25 to $30 over the next two years and you could buy the 2015 $22 calls for $2.20 and then you "only" need $24.20 to break even and the rest is wonderful, leveraged profits.  But, on the other hand, if this or that happens in the economy or INTC's notebook sales (35.6% of their business) or Desktop sales (15.2%) or even their Server Processors (23.4%) have some troubles over the next two years – you have nothing.  

    If however, we SELL the 2015 $18 puts for $1.80, TOS tells us that the net margin is $1.80 so we get 100% return on margin and all INTC has to do is NOT fall $3.50 (16%) over the next two years and we get the whole 100% and we don't lose money unless INTC is below $16.20, which is 25% below the current price.  So, to make $1.80 on INTC I have a choice of buying a call for $2.20 and needing INTC to get to $26 by Jan 2015 (up 20.5%) or I can sell the put, get the $1.80 TODAY and make that money as long as INTC doesn't fall below 18 (down 16%).  

    That means my next advantage selling puts on INTC vs buying calls is 36.5% to make the same $1.80 and buying calls costs me $2.20 of my cash while selling calls costs me $1.80 of my margin.  That's the basis for our strategy at this time.   Should the balance change – I'd be happy to change my strategy but you can't walk away from a 36% advantage on a trade, can you?  



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Zero Hedge

Raoul Pal Warns The Day Of Reckoning Looms For VIX Shorts: "Reminds Me Of Portfolio Insurance In 1987"

Courtesy of ZeroHedge. View original post here.

ubmitted by Patrick Ceresna via Macrovoices.com,

In a podcast interview on MacroVoices, Macro Guru Raoul Pal makes some comments on some of the biggest imbalances in the markets today. 

He compares the VIX contango trade to the portfolio insurance problem that was blamed for the 1987 crash......



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ValueWalk

2016 Data - Americans Leave CT, IL, NY And NJ IN Droves

By The Foundation for Economic Education. Originally published at ValueWalk.

Which States Did Americans Leave in 2016?

Migration patterns for 2016 show that Americans tended to move away from high-tax states and into states where residents keep more of what they earn.

United Van Lines, the nation’s largest moving company, recently released its annual movers study report showing that South Dakota overtook Oregon as the top inbound destination. Generally, more people moved toward the West, and states in the Northeast saw the largest exodus of residents. The top four outbound states in 2016, in order, were New Jersey, Illinois, New York, and Connecticut.

(Photo: Tax Foundation)

The Tax Foundation point...



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Digital Currencies

Why A Bitcoin ETF May Not Be Coming Any Time Soon

Courtesy of ZeroHedge. View original post here.

When it comes to the future of bitcoin, the "holy grail" has emerged as becoming the first to have a bitcoin ETF approved by the SEC.

Over three years ago, in 2013, the company of the Winklevoss twins, Cameron and Tyler, Winklevoss Capital Management LLC, launched the first proposed bitcoin ETF, the Winklevoss Investment Trust, looking to trade on the HFT-dominated BATS exchange. The SEC is expected to make a decision on it by March. A second group, SolidX Partners followed last July seeking SEC approval for its bitcoin ETF, SolidX Bitcoin Trust, which also would be listed on the NYSE....



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Phil's Favorites

How You Can #Resist ... With Your Portfolio

 

How You Can #Resist … With Your Portfolio

Courtesy of 

“We have become great because of the lavish use of our resources. But the time has come to inquire seriously what will happen when our forests are gone, when the coal, the iron, the oil, and the gas are exhausted, when the soils have still further impoverished and washed into the streams, polluting the rivers, denuding the fields and obstructing navigation.”

– Republican President Theodore Roosevelt

This post is not going to be political. My partner Barry Ritholtz has been at the forefront of the idea that ...



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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

Big Oil May Finally Get to Drill in the Arctic, But Is It Worth It? (Bloomberg)

Far above the Arctic Circle, one of the longest-running controversies in U.S. oil drilling is about to reignite.

Bouyed by Donald Trump’s election, Republicans are pushing to allow oil exploration in the Arctic National Wildlife Refuge, the frigid wilderness in northern Alaska that’s been a political battleground for drillers and conservationists for decades.

...



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Kimble Charting Solutions

Mr. President you want this to hold, says Joe Friday

Courtesy of Chris Kimble.

Consumer Confidence of late has continued to move higher, now reaching above the highs hit back in 2007. Long-Term S&P 500 returns are far below historical norms, when confidence is this high. We are not saying that high consumer confidence means the market is at a top!

Below is a look at the Advance/Decline line on a short-term basis.

CLICK ON CHART TO ENLARGE

Joe Friday Just The Facts; It could be important for support to hold, of this bearish rising wedge above.

...

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Chart School

Small Cap Losses Accelerate

Courtesy of Declan.

Small Caps again took the brunt of the selling as Shorts took advantage of yesterday's small rally back to former support (turned resistance) to enter positions. With the 'bull trap' in full effect, the next target down for the index is 1,308. Of supporting technicals, only Stochastics [39,1] is left to break its bullish alignment,


The S&P took a modest loss, but not enough to break it out of its consolidation. Volume was also lighter. With the Russell 2000 on the way down, it's suggesting the S&P will follow suit....

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Members' Corner

How To Poop At Work?

Courtesy of Nattering Naybob.

Once again it's "in the Toilet Thursday" or "Thursday's in the Loo". 

In our last episode, How to Poop On A Date? we were graced with a delicate shituation: what ever to do when your finally back at her place, snuggling in for a little "brown chicken brown cow" and you get hit with "Love Potion #2".

This week in How to Poop At Work? ,what to do when your at a big fancy pants meeting, when out of nowhere, you need to download a brown load?



...

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OpTrader

Swing trading portfolio - week of January 16th, 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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Mapping The Market

If we try it enough, it will work.

Via Jean-Luc

Brownback wants Trump to emulate what he did in Kansas because it worked so well:

Sam Brownback Calls on Donald Trump to Mimic His Kansas Tax Plan

By RICHARD RUBIN and  WILL CONNORS

Sam Brownback, the Kansas governor whose tax cuts brought him political turmoil, recurring budget holes and sparse evidence of economic success, has a message for President-elect Donald Trump: Do what I did.

In 2013, Mr. Brownback set out to create a lean, business-friendly government in his state that other Republicans could replicate. He now faces a $350 million deficit when the Kansas legislature convenes in January and projections of a larger one in 2018. The state’s economy is flat and his party is fractured...

...

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Biotech

The Medicines Company: Insider Buying

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

I'm seeing huge insider buying in the biotech company The Medicines Company (MDCO). The price has already moved up around 7%, but these buys are significant, in the millions of dollars range. ~ Ilene

 

 

 

Insider transaction table and buying vs. selling graphic above from insidercow.com.

Chart below from Yahoo.com

...

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Promotions

Phil's Stock World's Las Vegas Conference!

 

Come join us for the Phil's Stock World's Conference in Las Vegas!

Date:  Sunday, Feb 12, 2017 and Monday Feb 13, 2017.            

Beginning Time:  8:00 am Sunday morning

Location: Caesar's Palace in Las Vegas

Notes

Caesar's has tentatively offered us rooms for $189 on Saturday night and $129 for Sunday night. However, we have to sign the contract ASAP. We need at least 10 people to pay me via Paypal or we may lose the best rate for the rooms. (Once we are guaranteed ten attendees, I will put up instructions to call the hotel for individual rooms.)

The more people who sign up,...



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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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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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