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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

Caterpillar Retail Sales Decline For 46 Consecutive Months; Worst Month For North America Since 2010

Courtesy of ZeroHedge. View original post here.

While Caterpillar's CEO may have resigned recently, the woes at the heavy industrial manufacturer continue, with yet another month of declining global sales, the company's 46th in a row.

According to the latest monthly release of global retail sales which traditionally presages the company's earnings release due out tomorrow, the company reported that North American sales dipped by 23%, the steepest monthly decline since February 2010, confirming recent speculation that demand for original equipment is simply not there. The rest of the world did n...

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Is Yellen Starting A Civil War At The Fed?

By Guest Post. Originally published at ValueWalk.

Janet Yellen continues to be an inflation dove, and last week, she suggested that the FOMC keep interest rates low, even if unemployment continues to fall and official inflation rates increase.

After more than seven years of rates below 1 percent, many members of the FOMC has started to worry about just how they’re going to re-establish any credibility. It’s already become abundantly clear that the Fed is too frightened to do much of anything other than sit around and hope that the economy will somehow move out of its multi-year cycle of low expectations and mediocre growth.

CNBC reports:

In ...

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Swing trading portfolio - week of October 24th,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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Kimble Charting Solutions

Banks- This is putting a smile on this sector

Courtesy of Chris Kimble.

Historically, when strong bull markets have taken place, Banks go along for the ride. Since the summer of 2014, banks have under performed the broad market by around 12%, as the S&P is just a couple of percent from all-time highs. Are banks about to act healthier and put a smile on this sector, which could help the S&P breakout above the 2,150 level?

Below looks at the Bank Index (BKX)



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Phil's Favorites

'Impossible' & 'Inevitable' - The Only 2 Solutions As The Status Quo Crumbles

Courtesy of Charles Hugh Smith, Of Two Minds

Two charts illustrate Why Our Status Quo Failed and Is Beyond Reform: this chart of the S-Curve of financialization, leverage, debt, central planning, regulatory capture and globalization--that is, the engines of modern "growth"--depicts the inevitable stagnation and decline of these dynamics as overcapacity, debt saturation and diminishing returns take hold.

This chart illustrates the status quo's insistence on doing more of what has failed spectacularly: since all this worked in the boost phase, the central planning Cargo Cult's &...

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Chart School

Weekly Market Recap Oct 23, 2016

Courtesy of Blain.

The week that was…

A sleepy week indeed as almost all the “action” came out of a gap up Tuesday morning and a gap down Friday morning (which was met with buyers).  Outside of those events, the indexes stuck closely to unchanged most of the week.  Earnings began in earnest but outside of some individual high profile stories it was a lot of beating lowered expectations.

“Despite a couple of good reports, we’re in the midst of another earnings season that is hardly painting a bright picture,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott. “Having another quarter where profits contract is not an underpinning for stocks to advance, and the market is searching for, if not demanding, a catalyst to move higher. At the moment, one is lackin...

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Market News

News You Can Use From Phil's Stock World


Financial Markets and Economy

Saudi Stocks Spurred by Record Bond Sale Lead Gains Across Gulf (Bloomberg)

Saudi Arabian stocks led gains across most Gulf equities, rising for a third day on optimism the kingdom will repay companies after it raised a record $17.5 billion from its debut international bond sale.

Economists never imagined negative interest rates — now they're rewriting textbooks (Business Insider)

If you’re a bank, the idea sounds crazy. Why pay someone to hold your cash? ...

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Insider Scoop

Rockwell Collins to Acquire B/E Aerospace for $8.3B

Courtesy of Benzinga.

Rockwell Collins (NYSE: COL) and B/E Aerospace (NASDAQ: BEAV)  today announced that they have entered into a definitive agreement under which Rockwell Collins will acquire B/E Aerospace for approximately $6.4 billion in cash and stock, plus the assumption of $1.9 billion in net debt.

Under the terms of the agreement, each B/E Aerospace shareowner will receive total consideration of $62.00 per share, comprised of $34.10 per share in cash and $27.90 in shares of Rockwell Collins common stock, subject to a 7.5% collar. This represents a premium of 22.5% to the closing price of B/E Aerospace common stock on Friday, Octob... more from Insider

Members' Corner

The Orlando Massacre Part 3

Courtesy of Nattering Naybob.

A continuation of a Naybob of IT's Natterings from Part 1 and Part 2...

While many Christian churches expressed grief and offered free funeral services for the victims of the Orlando shooting, the fundamentalist Westboro Baptist Church held an anti-gay protest during the funeral of the victims.

But the Westboro Baptist Church's protest rally was blocked by about 200 people who formed a human barricade on the main street in downtown Orlando, ...

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Mapping The Market

The Most Overlooked Trait of Investing Success

Via Jean-Luc

Good article on investing success:

The Most Overlooked Trait of Investing Success

By Morgan Housel

There is a reason no Berkshire Hathaway investor chides Buffett when the company has a bad quarter. It’s because Buffett has so thoroughly convinced his investors that it’s pointless to try to navigate around 90-day intervals. He’s done that by writing incredibly lucid letters to investors for the last 50 years, communicating in easy-to-understand language at annual meetings, and speaking on TV in ways that someone with no investing experience can grasp.

Yes, Buffett runs an amazing investment company. But he also runs an amazing investor company. One of the most underappreciated part of his s...

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Digital Currencies

Gold, Silver and Blockchain - Fintech Solutions To Negative Rates, Bail-ins, Currency Debasement and Cashless

Courtesy of ZeroHedge. View original post here.

By Jan Skoyles

I was so pleased yesterday by the announcement that I have joined the Research team at GoldCore as it meant that I could finally start talking about it and was back in a role that lets me indulge in my passion by researching and geeking out on all things gold, silver and money.


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Epizyme - A Waiting Game

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

Epizyme was founded in 2007, and trying to create drugs to treat patient's cancer by focusing on genetically-linked differences between normal and cancer cells. Cancer areas of focus include leukemia, Non-Hodgkin's lymphoma and breast cancer.  One of the Epizme cofounders, H. Robert Horvitz, won the Nobel Prize in Medicine in 2002 for "discoveries concerning genetic regulation of organ development and programmed cell death."

Before discussing the drug targets of Epizyme, understanding epigenetics is crucial to comprehend the company's goals.  

Genetic components are the DNA sequences that are 'inherited.'  Some of these genes are stronger than others in their expression (e.g., eye color).  Yet, some genes turn on or off due to external factors (environmental), and it is und...

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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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PSW is more than just stock talk!


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! 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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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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