Archive for May, 2010

Will Canada Lead G7 Rate Hikes?

Courtesy of Leo Kolivakis

Via Pension Pulse.

Reuters reports, World trade growth slows in 1st qtr:

Global trade volumes in the first three months of this year were 5.3 percent higher than in the previous quarter, representing slightly slower growth than in recent months but still a healthy rebound from the crisis, data from the Dutch CPB institute showed on Monday.

 

The CPB, whose data are used by the European Commission and World Bank, said world trade in the three months ended February had grown by 5.8 percent over the previous three months and grown 6.0 percent in the last quarter of 2009.

 

Trade growth remained strongest in Asia and Latin America, but was relatively low in the euro area, it said in its latest monthly world trade monitor.

 

On the more volatile monthly figures, world trade volumes were 3.5 percent higher in March than in February, when they grew 1.7 percent.

 

Trade volumes grew worldwide except for Japanese imports, and both imports and exports in the euro area were strong.

 

World trade in March was 4 percent below the peak reached in April 2008 and 21 percent above the trough seen in May 2009.

The CPB report also showed a pickup in world industrial production:

On the basis of preliminary data, world industrial production grew by 0.2% in March 2010, following an unrevised 1.0% increase in February. Production continues to grow in all regions, emerging Asia excepted. In March, industrial production was 1.9% below the peak level reached in March 2008. It has risen by an accumulated 12% from the March 2009 trough. In the first quarter of 2010 production was up by 10.9% on year ago, the highest such value in our series (which start in 1991).

Robust global trade helped Canada register a record 6.1% gain in Canadian GDP during Q1. Phred Dvorak of the WSJ reports, Canada’s Growth Sets Stage for Rate Increase:

Canada’s economy grew at the fastest pace in more than a decade during the first quarter of this year, a stronger-than-expected performance that cemented expectations of an interest-rate increase on Tuesday.

 

Gross domestic product rose an annualized 6.1% during the three months ended March 31, fueled by continued


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European Cross Country Bond Spreads

Courtesy of Tyler Durden

As we embark on what will likely be another painful week for European markets, here is where all the cross country spreads are as of this moment.

As compared to the stable German 10 year benchmark, the worst 5 continue to be the PIIGS, in the following order – Greece, Ireland, Portugal, Spain and Italy. The tightest spreads are for Finland, Holland, France, Austria, and Belgium. We anticipate some further divergence between the PIIGS and the rest of Europe by the end of the week.





Bank Of International Settlements Warns To Ignore Banker “Doomsday Scenario” Fearmongering And Racketeering

Courtesy of Tyler Durden

Over the past two years, the one strategy that has elicited the greatest amount of anger in the general population has been the traditional resolution to the “lowest common denominator” strategy of fearmongering or racketeering by the financial elite, any time it was faced with a status quo extinction event. The primary example is the Fed and Clearinghouse Association’s threat that should the Fed be forced to disclose the details of its bailout of various banks (as two courts have already ordered it to do), the result would be the greatest run on US banks in history: “If the names of our member banks who borrow emergency funds are publicly disclosed, the likelihood that a borrowing bank’s customers, counterparties and other market participants will draw a negative inference is great.” This is nothing but the patronizing of the broader population by those who seek to preserve their millions in bonuses, while disguising their hypocrisy in bluster, and hoping that the topic will be promptly forgotten. Curiously one entity that has decided to take on this “fire and brimstone” head on and to warn the general population to ignore the bankers “doomsday scenarios” is the bankers’ bank, the BIS. As the FT reports, according to a soon to be released report by the bank’s Chief Economic Advisors Stephen Cecchetti, “Banks are exaggerating the economic effects of the regulations they are likely to face in the coming years.” While his focus is on the implications of the passage of the Basel III treaty, and to preempt counter lobbying by the bank themselves, his argument can be extended to ever instance in which banks present scenarios of collapse should they not get their way: as Cecchetti points out: “the banks’ “doomsday scenarios” were based on their assuming “the maximum impact of the maximum change with the minimum behavioural change.” This is a huge point, as it means that even the failure of the TBTF banks could have been mitigated in the context of a controlled (and even uncontrolled) bankruptcy, and the only reason they were bailed out was to preserve the equity interests and the existing management team, period. This also means that the Fed and Treasury are nothing but vehicles for perpetuating Wall Street’s status quo, as we have claimed from the very beginning.

More from the FT:


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Swing trading virtual portfolio-results as of May 31st, 2010

 The last month has been very good for our virtual portfolio! We were up 42.58% for a 3% risk per trade, and 28.39% for a 2% risk.

Year-to-date, the virtual portfolio is now up 70% for 3% risk, and 46% for 2% risk! Last month we had 17 profitable trades, and 15 losers. The big difference was that we had some big winners, and we controlled our losses very well.

We only had one trade at more than 2R loss, and it was the MON trade, where really we could not have done much better.

On the other side, we had 7 winners at more than 2R, with some even bigger winners (4R+) on the puts that we let run like AMZN.

If you were trading options, your results might have been even better on some of those puts, as delta increased significantly with IV. That was a very important month, as it shows us that we can make a lot of money, even when being wrong almost 1/2 of the time about direction. This is probably the most important lesson to be learned here: cut your losses short, and let your winners run, and you will make money consistenly!

 





Presenting A Dutch Proposal To Stop GoM Oil Spill “Within Days”

Courtesy of Tyler Durden

The Netherlands has experience with controlling water: 2,000 miles of dykes preventing the sea from flooding the country’s nether regions have taught the Dutch a thing or two about hydroisolation and spillover control. Unfortunately, as the last 40 days or so demonstrate so amply, neither the US nor the UK have the faintest clue how to stop the GoM oil spill which is now entering into the realm of the surreal. Which is why it may be time to learn from those who do know something about the matter. Zero Hedge has received the following proposal from Van Den Noort Innovations BV, which asserts it can get the GoM oil spill under control within days, and it doesn’t even involve nuking the continental shelf.

From Johann H.R. van den Noort:

Please, be informed that we from our Dutch background water related inventions have found a most effective solution to stop the oil spill in the Mexican Gulf within a few days!

Just yesterday we have publicized this news on the front page of our website, see www.noort-innovations.nl

For the sake of all people concerned, we would appreciate that you could bring out this news on your website at your earliest convenience as so much time has already been lost. We have tried to reach president Obama but did not succeed on Memorial Day.

We are the first to admit we know nothing about the feasibility or practicality of the attached proposal, which is why we post it here and hopefully those who are experts on the topic can voice in. As the situation is indeed hopeless and getting worse, it may be time to consider every proposal, no matter how far-fetched it sounds.

Stop the BP Oil Spill in the Gulf of Mexico:

 

Attachment Size
Stop the BP Oil Spill in the Gulf of Mexico.pdf 112.5 KB




Jeff Gundlach Warns Massive Asset Managers Like PIMCO And BlackRock Are Greater TBTF Risk Than Citi

Courtesy of Tyler Durden

In this brief interview with Morningstar, Doubleline’s star MBS analyst, and the bane of TCW’s existence, Jeff Gundlach, points out the glaringly obvious: i.e., that “if Citigroup was too big to fail, then so much greater is the risk for asset managers at a multiple of that market cap.” Obviously the mortgage expert here is contemplating asset manager behemoths such as PIMCO and BlackRock, which have quietly become even more institutionalized within the fabric of the financial markets, than some of the TBTF banks. And without access to the Fed’s discount window, liquidity threats to firms like PIMCO are exponentially greater than even for a bankrupt POS like Citigroup. No wonder Gross was offloading European sovereign debt with gusto as of last check. With total assets of over $1 trillion, saying that a failure by PIMCO, and by extension its Fed-unmoderatable counterparty risk, would have huge implications on the US financial system, is so obvious, that it is completely understandable that there is not one single provision in the Senator from Countrywide and the Congressman from Fannie’s FinReg proposals on how to tackle this most recent threat to capital markets.

From the Gundlach interview:

Jason Stipp: You had mentioned in a recent interview about the government and the whole notion of the “too big to fail” and you said that that should really be extended to asset managers. I am wondering if you could elaborate a little bit on what you see as a risk of asset managers that may be too big to fail and can you confirm if you were talking about PIMCO with that comment?

Jeffrey Gundlach: Well, I’m not talking about any one firm in particular, I am just saying that any investment management firm that is controlling many hundreds of billions or even trillions of dollars and is using a lot of counter party risk for synthetic transactions is introducing a lot of systemic risk into the system. Remember when we had all those problems in September ’08 and the government had to come to the rescue of Citibank, Citibank has a market cap of something like $300 billion, and that was enough capital at risk to be deemed too big to fail.

If there is an asset manager with $600 billion or $1.2 trillion or $3 trillion of investors’ money


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France Worries About AAA Rating; UK Economists Urge Greece to Abandon Euro; Spanish Prime Minister Losing Support; Japan’s Industrial Output Weakens

France Worries About AAA Rating; UK Economists Urge Greece to Abandon Euro; Spanish Prime Minister Losing Support; Japan’s Industrial Output Weakens

Courtesy of Mish 

Inquiring minds might be interested in an international roundup for Memorial Day. Let’s take a look at top stories about France, Germany, Greece, the EU, Spain, and Japan.

French Finance Minister Says "Keeping AAA Rating a Stretch" 

As Eurozone trade unions prepare to battle over various austerity programs, the French budget minister warns on credit rating.

France admitted on Sunday that keeping its top-notch credit rating would be "a stretch" without some tough budget decisions, following German hints that Berlin may resort to raising taxes to help bring down its deficit.

Euro zone trade unions are preparing for possible confrontations in the coming week if governments impose austerity measures or labor reforms unilaterally. But ministers made clear they were ready to take unpopular steps to prevent the Greek debt crisis spreading to their economies, although doubts are growing about whether the Spanish government in particular has enough support to get its way.

Budget Minister Francois Baroin indicated on Sunday that France should not take for granted its AAA rating, which allows Paris to borrow relatively cheaply on international markets and finance its big budget deficit.

"The objective of keeping the AAA rating is an objective that is a stretch, and it is an objective that, in fact, partly informs the economic policies we want to have," Baroin said. "We must maintain our AAA rating, reduce our debt to avoid being too dependent on the markets, and we must do this for the long term," he told Canal+ TV in an interview.

France has forecast its deficit will hit 8 percent of gross domestic product this year, but aims to bring it down to within the European Union’s 3 percent limit by 2013.

UK Economists Advise Greece to Abandon the Euro

The Times Online reports Greece urged to give up euro

THE Greek government has been advised by British economists to leave the euro and default on its €300 billion (£255 billion) debt to save its economy.

The Centre for Economics and Business Research (CEBR), a London-based consultancy, has warned Greek ministers they will be unable to escape their debt trap without devaluing their own currency to boost exports. The only way this can happen is if Greece returns to its own currency.


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Weekly Market Report

(May 30th, 2010 – June 5th, 2010)

Courtesy of InTheMoneyStocks

This past week the S&P 500 INDEX,RTH (INDEXSP: .INX) gained 1 point when all was said and done into Friday’s close. The broad based market cap weighted index did happen to close above the weekly 50 moving average after testing and briefly piercing the February 5th pivot low. The pattern on the weekly chart is a bottoming tail at a support level which could lead to further upside. However, every rally has been sold recently and that type of continued action cannot be ruled out. Next week is a holiday shortened week in the U.S. as the market is closed on May 31, 2010 for the Memorial Day holiday. Therefore, the holiday will give the European Union an extra day to come up with some calming news before the U.S. markets resume trading on Tuesday June 1st, 2010. As of this time it is prudent to expect more volatility as the markets remain uncertain.

The SPDR Gold Trust (ETF) (NYSE:GLD) gained $3.66 this past week to close at $118.88 for the week. The pattern on the gold chart is an inside week. Often this pattern can go either way and will usually require more time to define a move. The one positive for the GLD is the overall trend remains intact and healthy on the weekly chart. As of this time the GLD looks to be consolidating the recent double top high made on May 12th, 2010. Most traders and investors continue to hold gold because of the massive money creation by the central banks around the world. As we all know by now gold has been considered a global currency since the beginning of time and will likely remain that way until the end of time. If the stock markets did go into a deflationary spiral gold could get dragged down with everything else similar to what took place in 2008. If that does not occur gold can be bought after every pullback or correction.

The United States Oil Fund LP (ETF) (NYSE:USO) finished the week higher by $1.76 to $34.04. The USO bounced off the $31.60 support level last week and continues to remain in the long sideways base since June 2009. Should the $31.60 level fail to hold…
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Here’s What You Need To Know About The Israeli Flotilla Crisis

Here’s What You Need To Know About The Israeli Flotilla Crisis

israeli flotilla crisisCourtesy of Gregory White at Clusterstock/Business Insider

This morning, Israel intercepted a flotilla bound for Gaza from Turkey that was, according to the Israeli military, carrying a cache of weapons. Those on the flotilla, who included members of parliaments from the region, claimed they were carrying only aid items for the Palestinians.

  • At least 10 people were killed in Israel’s assault on the flotilla. Israel claims 10 of its soldiers were also injured in the attack.
  • The flotilla was meant to break the blockade on Gaza, a portion of Palestine ruled by Hamas, a political party but also a terrorist organization.
  • The flotilla was attacked in international waters.
  • Those on the boat, and those who support their cause, claim that all they were carrying was personnel, many of whom were teachers and doctors, and items to support their aid mission. Supporting video, from Al-Jazeera:
  • Israel claims the boat was housing a weapons cache and that individuals on the boat attacked their troops with weapons when they stormed it. Supporting video, from the Israeli Defense Force (IDF): 
  • Protests against the actions of the Israeli government have broken out in LondonCairo, and Istanbul.
  • Governments in Europe have spoken out against the attacks, with President Sarkozy of France and Foreign Minister Hague of the UK calling Israel’s actions "out of line."
  • Israeli PM Benjamin Netanyahu has canceled his trip to the U.S. as a result of the attack, choosing to remain in Israel to deal with the problem.
  • This is likely a massive political misstep for Israel, as tensions with the U.S. government were just beginning to dissolve, and now are likely to remain high.

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Free 2010 Options Expiration Calendar

Options Traders — check out this easy-to-read Options Expiration Calendar for a helpful reminder of the monthly expiration dates for various option types.  (Note: mine landed initially in my spam file.) - Ilene 

Free 2010 Options Expiration Calendar

The Options Industry Council, the primary, unbiased resource for Options education, now offers a free 2010 Expiration Calendar. Get yours today!

 


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Zero Hedge

Visualizing The 150 Apps That Power The Gig Economy

Courtesy of ZeroHedge. View original post here.

Go back in time a decade, and you’d have a tough time convincing anyone that they would be “employed” through an app on their phone.

And yet, as Visual Capitalist's Jeff Desjardins explains, in a short period of time, the emergence of the smartphone has enabled the gig economy to flourish into a multi-trillion dollar global market. And by leveraging apps like Uber, Airbnb, and Etsy, it’s estimated that ...



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Phil's Favorites

What's going on with Blue Apron?

By Ilene 

The Blue Apron business model appears, perhaps, flawed. While the service is convenient, I think it would appeal mostly to very busy people who don't have time to shop for food -- but enjoy cooking -- and have enough money that the trade off between paying for food delivery vs. spending time shopping is worth it. Here's the unfortunate stock chart and some numbers from Yahoo:

The company has been losing money, and is projected to lose money again next year. Revenue is projected to decrease in 2019 from the 2018 level, but pick up again in 2020, though still below 2018's revenue. Maybe a larger company that could integrate APRN's services into its existing infrastructure should acquire APRN and save it from its apparent...



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Chart School

Palladium minor cycle bottom

Courtesy of Read the Ticker.

Once again RealVision TV posts another trade idea, long palladium. We shall review it with our RTT cycle tools and parallel channels.







Any trader will be concerned with the supply shock at $1800 which pushed down price quickly. Profit taking maybe, sure! The question, is there more supply out (or more profit taking) there ready to dump on the market, either now or after any minor advance. This why waiting for the 'C' wave of the A-B-C to form over some more time is a good idea, and once done, we want to see solid buying moving price up before acting, after all we do not want to be early or a lonely bull (Richard Wyckoff logic). 

The parallel channel highl...

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Digital Currencies

Cryptocurrencies are finally going mainstream - the battle is on to bring them under global control

 

Cryptocurrencies are finally going mainstream – the battle is on to bring them under global control

The high seas are getting lower. dianemeise

Courtesy of Iwa Salami, University of East London

The 21st-century revolutionaries who have dominated cryptocurrencies are having to move over. Mainstream financial institutions are adopting these assets and the blockchain technology that enables them, in what ...



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Kimble Charting Solutions

Banks Sending Bearish Message To Stocks, Says Joe Friday

Courtesy of Chris Kimble.

Quality bull markets prefer to see Banks stronger than the broad markets or at least keeping up with it. Concerns often crop up when banks reflect relative weakness compared to the S&P.

This chart looks at the Bank Index (BKX) over the past few years, reflecting a falling channel of lower highs and lower lows has taken place inside of falling channel (1). This falling channel has now been in play for the past 15-months.

The index hit the bottom of the channel in December of 2018 and a counter-trend rally took place. The rally off the December lows saw the index hit the top...



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Insider Scoop

Analyst: US Sanctions 'May Not Kill Huawei'

Courtesy of Benzinga.

President Donald Trump signed an executive order Wednesday that limits how "foreign adversaries" conduct business with U.S. companies.

What Happened

The Department of Commerce said China's Huawei and 70 related companies will be included in the "Entity ...



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Biotech

DNA as you've never seen it before, thanks to a new nanotechnology imaging method

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

 

DNA as you've never seen it before, thanks to a new nanotechnology imaging method

A map of DNA with the double helix colored blue, the landmarks in green, and the start points for copying the molecule in red. David Gilbert/Kyle Klein, CC BY-ND

Courtesy of David M. Gilbert, Florida State University

...



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ValueWalk

More Examples Of "Typical Tesla "wise-guy scamminess"

By Jacob Wolinsky. Originally published at ValueWalk.

Stanphyl Capital’s letter to investors for the month of March 2019.

rawpixel / Pixabay

Friends and Fellow Investors:

For March 2019 the fund was up approximately 5.5% net of all fees and expenses. By way of comparison, the S&P 500 was up approximately 1.9% while the Russell 2000 was down approximately 2.1%. Year-to-date 2019 the fund is up approximately 12.8% while the S&P 500 is up approximately 13.6% and the ...



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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Mapping The Market

It's Not Capitalism, it's Crony Capitalism

A good start from :

It's Not Capitalism, it's Crony Capitalism

Excerpt:

The threat to America is this: we have abandoned our core philosophy. Our first principle of this nation as a meritocracy, a free-market economy, where competition drives economic decision-making. In its place, we have allowed a malignancy to fester, a virulent pus-filled bastardized form of economics so corrosive in nature, so dangerously pestilent, that it presents an extinction-level threat to America – both the actual nation and the “idea” of America.

This all-encompassing mutant corruption saps men’s souls, crushes opportunities, and destroys economic mobility. Its a Smash & Grab system of ill-gotten re...



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OpTrader

Swing trading portfolio - week of September 11th, 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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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

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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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About Ilene:

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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