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  1. Phil

    Practice makes perfect (or at least the 60% winners we aim for) Yodi – great attitude that has served you very well.  

    Greeks/Burr – Must listen to this song while we discuss.  If you can make separate portfolios for long and short-term holdings, that would be a good idea because it's ridiculous to apply a single number to both when the strategies are completely different.  Vega, for example, is not useful at all for predicting the value of individual options, it's merely predicting the change in your portfolio as it, in turn, reacts to a change in volatility which, itself, is highly volatile as the VIX is out of control.  So think about what these instruments are really telling you when they are all measuring each other – not much…

     Your Theta's going to look like crap with 2015 longs (especially if they are covered) as your incremental daily gain is minimal, not to mention that, when the market goes up, the VIX goes down and diminshes the "value" of your longs while, when the market goes down, the VIX goes up and your short puts go way against you – so you get a highly inflated negative view of your portfolio that way.  Dan Passerelli is pretty good with the Greeks, if you're interested, he wrote a good book on them.  

    I will bet you that, if you ask Buffett what his Delta, Vega and Theta are he'll tell you – "How the Hell should I know" or something to that effect.  Delta is useful if you are not capable of simply seeing that "Gee, the Dow went up 100 points and my portfolio made $5,000 and Tuesday the Dow dropped 200 points and my portfolio lost $8,000" and then figuring out that you are $5,000 bullish to $4,000 bearish per 100-point move so 25% more bullish than bearish and then all you have to do is find a position that pays you $1,000 if the Dow drops 100 points (like our DIA puts) and PRESTO! you're neutral.  

    And we didn't even have to look at a single Greek…

    Cruise/Canuck – I love the name but I only like cruises with the kids, not my kind of thing in general.  Put the same guys at the Akropolis and I'd be happy to fly there.  They keep offering me free cruises if I do a seminar on the boat but I'm just not into that.  

    Cyprus/Lionel – Last I heard Russia said "F it – we'll lend them some money."  

    DIA/Dawn – Oh, it's those pesky fundamentals again!  I know you don't read the posts but, just a week or so ago, I did a whole analysis of the Dow and we determined it didn't have much further to climb and that some of its components, like FDX, were pretty well overbought and could easily correct on any disappointing news.  Why?  Well, I won't force you to read it – the answer is International Exposure, especially to Europe while the RUT is exposed over 80% to the US, which is in a marked recovery.  You can't keep going back to the well of "conventional market wisdom" as if macro circumstances don't matter – especially these days – they matter a hell of a lot.  

    Cyprus/StJ – I say let them all move to North Dakota and take up fracking.  

    Very nice on conference Terra, thanks!

    IWM/Dawn – Same thing.  

    Bitcoin/Cdt – I think that was BDC.  

    Austerity/StJ – Yep, I read that one.  Actually, what's really happening is that Corporations have become much more effective at capturing the benefits of an up cycle before it has a chance to trickle down to the broader economy.  

    So the real shrinking population is the number of people who are able to benefit from economic gains (though they certainly suffer all of the losses!).  

    Good luck with the house hunt Hemas.  Try Craig's list – they are very good for that sort of thing. 

    Sensor/StJ – That's fantastic.  Especially for diabetics, who have to poke themselves constantly.  

    PGH/Kinki – Must be ex-dividend day, then.  Well, for one thing, you want to buy them back to get your dividend – the cash is in your portfolio, so no big deal and the stock is down .02 this morning so no worries there.  I'd just jump right back in and sell the next sucker the Oct $5 calls (.65) and let them call you away and cancel the premium if they want to!  

    Actually folks, that's a nice, new play.  PGH pays out .12 TODAY and you can buy them for $5.39 and sell the Oct $5 puts for .65 and tomorrow, assuming they go lower, you can sell the $5 puts, that are currently .40, for maybe .50 and that would put you in for a lovely net $4.19/4.60 which makes the .47 annual dividend 11.2% while you wait to see if you get called away at $5 for another 19.3% gain in 7 months.  



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Zero Hedge

Tick Tock, The Greek Time Bomb Is About To Go Off

Courtesy of ZeroHedge. View original post here.

Submitted by Secular Investor.

We were warning in several previous articles (here & here) the Greeks didn’t have much time left to enter into a new funding agreement with its lenders as the country was facing several billions of euros in mandatory repayments over the next few weeks.

Meanwhile, the International Monetary Fund has estimated Greece has until June 5th before it runs out of any money, so the leaders of Greece, the EU and the Eu...



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Phil's Favorites

Another US Foreign Policy Success: Isis Controls Half of Syria after Palmyra Seizure

Courtesy of Mish.

Congratulations are in order for team Bush and team Obama for another stunning US foreign policy success: Isis Controls Half of Syria after Palmyra Seizure. Fighters from the Islamic State of Iraq and the Levant (Isis) have seized the Syrian city of Palmyra, home to a Unesco world heritage site, putting nearly half of Syrian territory in the jihadi group’s hands and sparking fears that treasured antiquities may be destroyed.

Isis announced it had “complete control” of the city on Thursday, and state television said President Bashar al-Assad’s forces had withdrawn from the city, which is known to most Syrians by its Arabic name Tadmur.

Ancient Palmyra is known to the world for its iconic avenue ...



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Chart School

STTG Market Recap May 21, 2015

Courtesy of Blain.

Another quiet session in a week full of them.  The S&P 500 gained 0.23% and the NASDAQ 0.38% as morning weakness was bought.  This is a good sign again, but these gains are of a grinding nature.  Existing home sales for April fell 3.3%, missing an expected 1% gain to 5.24 million units. Earlier in the week, reports showed home builder sentiment fell in May, but housing starts for April came in much better than expected.

Perhaps we have a nice little bull flag forming on the S&P 500 here after a breakout of a very long range.

...



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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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Kimble Charting Solutions

Red Hot Shanghai pushed above another resistance level

Courtesy of Chris Kimble.

When it comes to Red Hot stock markets the Shanghai index fits the bill. Below looks at the Year-To-Date performance of the Shanghai, DAX and S&P 500 indices.

CLICK ON CHART TO ENLARGE

As you can see the S&P 500 is lagging big time this year and even though the DAX is having a great year, the Shanghai is up twice as much.

What would stop this Shanghai? Could it be a key Fibonacci level? The chart below looks at the Fibonacci 61% level, based upon its 2007 weekly highs and the financial crisis lows in 2008.

...



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Insider Scoop

Salesforce Fair Value Now $76/Share

Courtesy of Benzinga.

Related CRM 10 Must Watch Stocks for Today Williams-Sonoma, Salesforce.com, Deckers Outdoor Lead Wednesday's After-Hours Movers Wall Street Breakfast: PMI Data Weighs On Global Markets (Seeking Alpha)

In a report published Thursday, Brean Capital analysts maintained a Hold rating on salesforce.com, inc. (NYSE: ...



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Pharmboy

Big Pharma's Business Model is Changing

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

Understanding the new normal of a business model is key to the success of any company.  The managment of companies need to adapt to the changing demand, but first they must recognize what changes are taking place.  Big Pharma's business model is changing rapidly, and much like the airline industry, there will be but a handful of pharma companies left at the end of this path.

Most Big Pharma companies have traditionally done everything from research and development (R&D) through to commercialisation themselves. Research was proprietary, and diseases were cherry picked on the back of academic research that was done using NIH grants.  This was in the heyday of research, where multiple companies had drugs for the same target (Mevocor, Zocor, Crestor, Lipitor), and could reap the rewards on multiple scales.  However, in the c...



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Sabrient

Sector Detector: Bullish technical picture appears to trump cautious fundamentals

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

Courtesy of Sabrient Systems and Gradient Analytics

By Scott Martindale

Stocks closed last week on a strong note, with the S&P 500 notching a new high, despite lackluster economic data and growth. I have been suggesting in previous articles that stocks appeared to be coiling for a significant move but that the ingredients were not yet in place for either a major breakout or a corrective selloff. However, bulls appear to be losing patience awaiting their next definitive catalyst, and the higher-likelihood upside move may now be underway. Yet despite the bullish technical picture, this week’s fundamentals-based Outlook rankings look even more defensive.

In this weekly update, I give ...



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OpTrader

Swing trading portfolio - week of May 18th, 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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Digital Currencies

Nasdaq's bitcoin plan will provide a real test of bitcoin hype

 

Nasdaq's bitcoin plan will provide a real test of bitcoin hype

By 

Excerpt:

Bitcoin, the virtual digital currency, has been called the future of banking, a dangerous fad, and almost everything in between, but we're finally about to get some solid data to help settle the debate.

On Monday, the Nasdaq (NDAQ) stock exchange said it would ...



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Market Shadows

Kimble Charts: US Dollar

Which way from here?

Chris Kimble likes the idea of shorting the US dollar if it bounces higher. Phil's likes the dollar better long here. These views are not inconsistent, actually, the dollar could bounce and drop again. We'll be watching. 

 

Phil writes:  If the Fed begins to tighten OR if Greece defaults OR if China begins to fall apart OR if Japan begins to unwind, then the Dollar could move 10% higher.  Without any of those things happening – you still have the Fed pursuing a relatively stronger currency policy than the rest of the G8.  So, if anything, I think the pressure should be up, not down.  

 

UNLESS that 95 line does ultimately fail (as opposed to this being bullish consolidation at the prior breakout point), then I'd prefer to sell the UUP Jan $25 puts for $0.85 and buy the Sept $24 call...



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Mapping The Market

An update on oil proxies

Courtesy of Jean-Luc Saillard

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. 

Since...



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Promotions

Watch the Phil Davis Special on Money Talk on BNN TV!

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...

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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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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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