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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

Bernanke Wants The US President To Declare "Economic Emergencies" In Future Crises

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Mike Krieger via Liberty Blitzkrieg blog,

Presidents should get the power to declare economic emergencies along the lines to declare war, said former Federal Reserve Chairman Ben Bernanke on Monday.

It might make sense to give “the president some ability to declare emergencies or take extraordinary actions and not put that all on the Fed,” Bernanke said at a conference. “The constitution gives the president significant flexibility to respond to military situations,” in part because they a...



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Phil's Favorites

Greecification of Spanish Politics and the Lies of Spain's Ministers

Courtesy of Mish.

There's an excellent post on Keep Talking Greece this evening on the simmering feud between Greek prime minister Alexis Tsipras and Spanish prime minister Minister Mariano Rajoy.

Tsipras made a claim that Rajoy's plan is to "wear down, topple or bring our government to unconditional surrender before our work begins to bear fruit and before the Greek example affects other countries… And mainly before the elections in Spain. ... for obvious political reasons".

Spanish foreign minister García Margallo, returned fire with a statement (a lie actually), that “Had Spain not given  €32.744 billion to Greece, it could have increased the unemployment benefits by 50 percent or increase pensions by 38 percent.”

Theheart of the bickering is the rise of the Spanish political party Podemos to the top of the Spanish...



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Chart School

ISM Non-Manufacturing: Continued Growth in February

Courtesy of Doug Short.

Today the Institute for Supply Management published its latest Non-Manufacturing Report. The headline NMI Composite Index is at 56.9 percent, up fractionally from last month's 56.7 percent. Today's number came in above the Investing.com forecast of 56.5.

Here is the report summary:

"The NMI® registered 56.9 percent in February, 0.2 percentage point higher than the January reading of 56.7 percent. This represents continued growth in the non-manufacturing sector. The Non-Manufacturing Business Activity Index decreased to 59.4 percent, which is 2.1 percentage points lower than the January reading of 61.5 percent, reflecting growth for the 67th consecutive month at a slower rate. The New Orders Index reg...

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Insider Scoop

The Bob Evans Farms Miss 'Just Doesn't Make Sense,' Says Oppenheimer

Courtesy of Benzinga.

Related BOBE Benzinga's Top #PreMarket Losers Keep an Eye on These 10 Stocks for March 4, 2015 BOB EVANS FARMS (Investor's Business Daily)

In a report published Tuesday evening, Oppenheimer analyst Brian Bittner commented that he is "perplexed" following Bob Evans Farms Inc's (NASDAQ: BOBE) third quarter results.

Acco...



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All About Trends

Mid-Day Update

Reminder: David 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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Sabrient

Sector Detector: Stocks break out again but may be running on fumes

Courtesy of Sabrient Systems and Gradient Analytics

Despite low trading volume, a strong dollar, mixed economic and earnings reports, paralyzing weather conditions throughout much of the U.S., and ominous global news events, stocks continue to march ever higher. The world remains on edge about potential Black Swan events from the likes of Russia, Greece, or ISIS (or lone wolf extremists). Moreover, the economic recovery of the U.S. may be feeling the pull of the proverbial ball-and-chain from the rest of the world’s economies. Nevertheless, awash in investable cash, global investors see few choices better than U.S. equities.

In this weekly update, I give my view of the current market environment, offer a technical analysis of the S&P 500 chart, review our weekly fundamentals-based SectorCast rankings of the ten U.S. business sectors, and then ...



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OpTrader

Swing trading portfolio - week of March 2nd, 2015

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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Market Shadows

Kimble Charts: Coal

Kimble Charts: Coal

By Ilene 

Chris Kimble's chart for KOL shows a recently beaten down ETF struggling to pull itself up from the ashes. As the chart shows, KOL has recently drifted down to levels not seen since the financial crisis of 2008-9.

Bouncing or recovering with energy in general, coal prices appear to have stabilized in the short-term. Reflecting coal prices, KOL has traded between $13.45 and $19.75 during the past year. Bouncing from lows, KOL traded around 2% higher yesterday from $14.26 to $14.48 on high volume. It traded another 3.6% higher in after hours to $15, possibly related to ...



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Digital Currencies

MyCoin Exchange Disappears with Up To $387 Million, Reports Claim

Follow up from yesterday's Just the latest Bitcoin scam.

Hong Kong's MyCoin Disappears With Up To $387 Million, Reports Claim By  

Reports are emerging from Hong Kong that local bitcoin exchange MyCoin has shut its doors, taking with it possibly as much as HK$3bn ($386.9m) in investor funds.

If true, the supposed losses are a staggering amount, although this estimate is based on the company's own earlier claims that it served 3,000 clients who had invested HK$1m ($129,000) each.

...



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Pharmboy

2015 - Biotech Fever

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

PSW Members - well, what a year for biotechs!   The Biotech Index (IBB) is up a whopping 40%, beating the S&P hands down!  The healthcare sector has had a number of high flying IPOs, and beat the Tech Sector in total nubmer of IPOs in the past 12 months.  What could go wrong?

Phil has given his Secret Santa Inflation Hedges for 2015, and since I have been trying to keep my head above water between work, PSW, and baseball with my boys...it is time that something is put together for PSW on biotechs in 2015.

Cancer and fibrosis remain two of the hottest areas for VC backed biotechs to invest their monies.  A number of companies have gone IPO which have drugs/technologies that fight cancer, includin...



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Stock World Weekly

Stock World Weekly

Newsletter writers are available to chat with Members regarding topics presented in SWW, comments are found below each post.

Here's this week's Stock World Weekly.

Click here and sign in with your user name and password. 

 

...

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Option Review

SPX Call Spread Eyes Fresh Record Highs By Year End

Stocks got off to a rocky start on the first trading day in December, with the S&P 500 Index slipping just below 2050 on Monday. Based on one large bullish SPX options trade executed on Wednesday, however, such price action is not likely to break the trend of strong gains observed in the benchmark index since mid-October. It looks like one options market participant purchased 25,000 of the 31Dec’14 2105/2115 call spreads at a net premium of $2.70 each. The trade cost $6.75mm to put on, and represents the maximum potential loss on the position should the 2105 calls expire worthless at the end of December. The call spread could reap profits of as much as $7.30 per spread, or $18.25mm, in the event that the SPX ends the year above 2115. The index would need to rally 2.0% over the current level...



more from Caitlin

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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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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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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