Archive for 2010

Swing trading virtual portfolio – week of November 15th, 2010

This post is for live trades 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


Swing trading virtual portfolio


One trade virtual portfolio

Stock World Weekly

The latest Stock World Weekly Newsletter summarizing the events of last week, and discussing next week, is now available here. As always, we love feedback. - Ilene 

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More On The Perplexing Record Steep 10s30s Curve: Is It (Finally) Time For Flattening?

Courtesy of Tyler Durden

After recently the market took all calls of a flattening in the 10s30s to task, one would think that those anticipating a curve flattening (Zero Hedge included) would finally have learned their lesson. This has not happened so far, especially since a continued sell-off in the long-end will soon move from being a boon to the curve carry trade, to a flashing red signal of inflation expectations which will likely wreak further havoc across all asset classes. Also, quant models are already on the edge of refusing to bid up the 7 and 10 Y even as they are forced to sell 30Y, no matter what the Fed is telegraphing it will do. In his attempt to anchor the curve around the belly, Brian Sack has let the 30Y flail in the gusts of increasing inflationary expectations, and quite soon the plan will backfire. Which is why we believe that with future POMO schedules, the FRBNY will disclose an ever greater portion of monetization in the 17-30 Y segment, over and above the 4% disclosed originally on November 3. One analyst who refuses to give up on the flattener trade is Morgan Staney’s Igor Cashyn, who as of Friday, has reiterated a call for imminent de-steepening, although unlike before where the flattener was to be traded via nominals, this time the Russian goes straight into Real Yields.

From Morgan Stanley:

In our mid-October piece, we recommended entering into a UST 10s30s flattener, beta-hedged with a UST 2s5s flattener to hedge the risk of UST 10s30s steepening further if Fed hikes were to be pushed out further in time (see Treasuries: A Modest Back-Up In Rates As Market Awaits Direction on QE2, October 14). Our reason for entering the trade was that the 10s30s curve was too steep versus 2s5s, a residual that was driven by the 10s30s real yield curve that was running ahead of 2s5s. The risk to our 10s30s nominal flattener call was that inflation fears would rise and lead to a steepening of the 10s30s breakevens curve, and in a separate trade we has recommended hedging this view via a 10s20s breakeven steepener, also published in the same mid-October piece.

Over the past several weeks, however, the main driver of the UST 10s30s curve has switched from the real yield curve to the breakevens

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Graham Summers’ Weekly Market Forecast (discounting Bernanke edition)

Courtesy of Phoenix Capital Research

And so it begins


The Fed’s QE 2 program begins this week. Combined with its ongoing QE lite program, we’ve got $105 billion in US Debt purchases in the next four weeks alone.


The Fed initially claimed QE 1 was an emergency measure that would save jobs and the US economy. Amazingly this one time emergency measure (which failed to do anything for the US economy, I might add) has now become a way of life for the Fed.


Indeed, QE 1 never really ended as the Fed continued juicing stocks every options expiration week even after QE 1 was supposedly completed. And yet, despite this, the Fed has now announced QE lite and QE 2.


Unfortunately for Bernanke, the markets appear to have already discounted his stupidity… and then some. In fact, his arch-nemesis, the US Dollar, has actually begun rallying ever since he announced QE 2:



Of course this has nothing to do with an improvement in the US’s fiscal position. Rather, it’s because Europe’s banking system is collapsing again, which is resulting in the Euro falling off a cliff (the Euro comprises over 50% of the US Dollar index):



I’ve written before that the inflation trade was overcrowded. With stocks, commodities, and precious metals all overbought and US dollar bearishness at or near record levels (US Dollar shorts hit a record high a few weeks ago), this has the makings of becoming a REAL issue.


Indeed, the big picture here shows the US Dollar bouncing off its long-term trend-line (black line below). If it US can break above resistance at 78 (red line below), we’re likely looking at a significant rally which could kick stocks and commodities right off a cliff.



Remember, the world stock market is roughly $36 trillion in market cap. In contrast, the currency markets trade…
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Partied Out: A Recap of Australia’s Now Imploding Housing Bubble; Property Bull Offers Jeremy Grantham $100m Housing bet, Party is Not Over

Partied Out: A Recap of Australia’s Now Imploding Housing Bubble; Property Bull Offers Jeremy Grantham $100m Housing bet, Party is Not Over

Courtesy of Mish

Young woman inflating balloons at party

Everyone loves a party and Australia threw one of the biggest parties in history.

Australia’s wholesale liqueur central distributor (widely known as the "RBA") should have taken away the punch long ago, but as in the US (and everywhere else), the central distributor as well as government officials and street vendors, all love a party, and what a long street party it was!

After years of partying, party goers got more than a bit tipsy, especially after government officials spiked the punch hoping to keep the street party going perpetually. Out of fear of being blamed for a massive hangover, the central distributor hiked the price of punch repeatedly hoping for a quiet end to the party.

However, the central distributor’s rate hike message was ignored for over a year, primarily because the punch distributor kept insisting "there is no bubble in partying". New party goers heard the message and came rushing in chanting the slogan "better party before it’s too late".

Various media outlets and party sponsors mocked one "keen" non-party goer who was too busy mountain climbing to party. Everyone else was cheering the party that had "too many fundamentals to ever end"

Meanwhile, the group of bar owners and bartenders known as the “Big Four” were forced to pass along the central distributor’s price hikes. Nonetheless, the masses kept drinking and partying. It was quite the spike government officials threw into the punch!

In an act of desperation, the “Big Four” bar owners finally raised prices even more than the wholesale liqueur distributor. They did this after becoming worried about the consequences of drunks passing out on the floor, in the street, and in the outback, unable to pay their "bar tabs".

Note that bar tab paying is the only real concern of the bar owners, not the mess in the streets or the outback.

Unfortunately, the actions of the distributor and the bar owners came far too late for a quiet end to the party. After singing the wildly popular hit tune "It’s Different Here" at the top of their lungs more times than there are kangaroos in the outback, the party goers finally passed out in the streets and the outback in drunken stupor.…
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IMF Ready to “Help” Ireland; Can the IMF “Help” Anyone?

IMF Ready to "Help" Ireland; Can the IMF "Help" Anyone?

Courtesy of Mish 

The IMF is ready, willing, and able to "Help" Ireland according Dominique Strauss-Kahn, the IMF Managing Director.

Please consider Strauss-Kahn Says IMF Can Help Ireland’s ‘Difficult’ Situation

The International Monetary Fund stands ready to help Ireland if needed, its managing director said, as market concern about the country’s debt crisis continues.

“Everybody knows that the situation with Ireland, it’s a difficult situation,” IMF Managing Director Dominique Strauss-Kahn told reporters today in Yokohama, Japan. “So far I haven’t received any kind of request. I think they can manage well. If at one point in time, tomorrow, in two months or two years, the Irish want support from the IMF, we will be ready.”

Bailing out Ireland’s financial system could cost as much as 50 billion euros under a “stress case” scenario compiled by the Finance Ministry and central bank. The country’s gross funding need for 2011 will be 23.5 billion euros, falling to 18.6 billion euros in 2014, the nation’s debt agency said yesterday.

Can the IMF "Help" Anyone?

Inquiring minds are asking "Can the IMF Help Anyone?"

That’s a good question. Mish readers may be shocked by my answer: "Yes It Can!"

The irony is no country in its right mind should ever accept "help" from the IMF.

This apparent paradox can be explained by the fact that "help" from the IMF is akin to tossing an anchor to a struggling swimmer.

Help does not go to the country accepting the offer of help. Rather "help" goes to the creditor nations who would otherwise bear the risk of a default by the debtors.

In this case, the IMF will not help Ireland. Instead, the IMF would screw the citizens of Ireland while bailing out the bondholders. Who are those bondholders?

The answer of course is banks in Britain, Germany, the United States and France.

Irish banks, bonds hit as EU eyes survival plan

Please consider Irish banks, bonds hit as EU eyes survival plan

Shares in Ireland’s banks hit record lows and national borrowing costs reached new euro-era highs Monday as the government presented its latest plans for financial survival to the European Union’s economic commissioner, who has the power to order changes.

The interest rates charged on the treasuries of Ireland, as well as fellow indebted euro-zone members Portugal and Spain, have

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Interactive Map of Global Debt

Interactive Map of Global Debt

Courtesy of Mish 

The Economist has an interesting Global Debt Clock that inquiring minds may be interested in.

From The Economist …

The clock is ticking. Every second, it seems, someone in the world takes on more debt. The idea of a debt clock for an individual nation is familiar to anyone who has been to Times Square in New York, where the American public shortfall is revealed. Our clock shows the global figure for all (or almost all) government debts in dollar terms.

Does it matter? After all, world governments owe the money to their own citizens, not to the Martians. But the rising total is important for two reasons. First, when debt rises faster than economic output (as it has been doing in recent years), higher government debt implies more state interference in the economy and higher taxes in the future. Second, debt must be rolled over at regular intervals. This creates a recurring popularity test for individual governments, rather as reality TV show contestants face a public phone vote every week. Fail that vote, as the Greek government did in early 2010, and the country can be plunged into imminent crisis. So the higher the global government debt total, the greater the risk of fiscal crisis, and the bigger the economic impact such crises will have.

Debt Comparison

The map consists of government debt, not all debt. It does not include future liabilities such as Social Security and Medicare.

Note that by this comparison Japan is the mother of all basket cases and Australia is better than all of the above.


Jose writes …

I am confused with the Global Debt Clock, as reflected on your article from The Economist. I have copy of an article from The Washington Post, dated several months ago, reflecting Government debt in percentage of nominal gross domestic product. The table was reproduced from Organization for Economic Cooperation and Development, the comparison is as follows:

Country… Economist… OECD
Canada …. 82.3% …… 82.8%
UK ………… 76.0% …… 71.0%
Australia…. 22.3% ….. 15.9%
Greece …. 129.4% …. 114.9%
Japan …… 196.6% …. 189.3%
US…………. 62.3% …… 83.9%

The US at 84% is what I remember as well. Note that only the US is far different in that table. If 84%+- is accurate, this Canada and the…
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The Failure of the G-20 Summit

The Failure of the G-20 Summit

Courtesy of Robert Reich 

The President emerged today from a meeting with the heads of state and finance ministers of the 20 biggest economies, in Soeul, South Korea, saying they had agree to “get the global economy back on the path of recovery.”

But where are the specifics? The three-page communique that also emerged from the session brims with bromides about the importance of “rebalancing” the global economy, “coordinating” policies, and refraining from “competitive devaluations.”

All nice, but not a single word of agreement from China about revaluating the yuan, or from the United States about refraining from further moves by the Fed to flood the U.S. economy with money (thereby reducing interest rates, causing global investors to look elsewhere for higher returns, and lowering the value of the dollar).

China and the U.S. are the only big players in the currency game. And with neither of them stepping up to bat, the game is in dangerous territory. Other nations will now do whatever they can to reduce the value of their currencies in order to stimulate more exports — and therefore create more jobs.

The underlying problem isn’t just or even mainly aninternational imbalance. It’s an imbalance within many nations — especially inside the United States and China. In the U.S., more and more income is concentrating at the top, thereby reducing the relative purchasing power of the vast American middle class. That means more pressure on exports to fill the gap.

In China, more and more income is going to the productive sector of its huge economy rather than to Chinese consumers, thereby reducing the relative purchasing power of the Chinese relative to what the nation is producing. That means more pressure on exports to fill the gap.

It’s always nice to talk about international cooperation, and to create global photo ops. But the truth is much more needs to be done to ease tensions that are moving the global economy closer to the brink of outright protectionism. The key responsibility falls to China and America — both in terms of what they do internationally and also what they do domestically.

Both have failed.

Market Musings: 11.14.10

Courtesy of thetechnicaltake

There are two dynamics going on in this market.  Call it force versus force.  It is the overbought, over bullish and over valued market that should rollover versus the buyer of last resort, the Federal Reserve.  And there can only be one winner.


Market Musings 11.14.10

Weekly Recap, And Upcoming Calendar – Light Domestic Econ Data With All Eyes On POMO, Europe And China

Courtesy of Tyler Durden

Week in Review

After an intense set of macro events over the last few weeks, last week’s macro calendar was notably lighter. The key sources of macro surprises came from EM inflation posting higher prints. China followed the trend and exhibited higher than expected headline inflation prints due to higher food prices. We have discussed the impact of higher food prices on EM inflation quite extensively this past year and we continue to watch the massive spike in traded international food prices with great interest and caution. In response China hiked the reserve requirement ratio again last week signalling more tightening ahead. Related to possible additional administrative measures, over the weekend press reports emerged that a number of large banks have reached annual lending quotas. So far the response of risky assets to this policy shift was negative. Outside China, the Band of Korea will meet on Tuesday, where we expect a hike by 25bp (consensus is for unchanged).

The ongoing tensions in Eurozone bond markets brought the market’s attention back to the looming problems in the European periphery, this time around with spreads in Ireland and Portugal widening and liquidity conditions deteriorating rapidly. The market is now assessing the probability that a country accesses the EFSF in the near future. Under these circumstances and with the positive surprises in US data fresh in mind, the market pushed the EUR off the highs, down from almost 1.41 to lows around 1.36. The upcoming Eurogroup and Econfin meetings on Tuesday and Wednesday will be key to watch.

The long awaited G20 meeting finally came with a disappointing statement even compared to our own expectation for very slow and gradual progress in global economic coordination. The prospect of capital controls emerging post  the G20 meeting, added to the overall uncertainty underpinning a volatile week for risky assets. After weeks of rumours and speculation, the Bank of Korea could possibly announce some capital account measures at the policy meeting on Tuesday.

Week Ahead

Further Upside Surprises in US Data?

The week ahead is reasonably light in terms of data. In the US the key releases to watch include retail sales, IP and the Philly Fed. On balance we expect better prints compared to consensus. This is likely to maintain the momentum of positive US surprises. As European tremors escalate the ongoing positive momentum in US data is…
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Zero Hedge

Enemy Of The People?

Courtesy of ZeroHedge. View original post here.

Via The Zman blog,

There has never been a time when normal people did not know the media was biased and biased in a predictable direction. For every non-liberal in the media, there were at least ten liberals. The ratio was probably higher, but then, as now, some lefties liked to pretend they were independents or some third option.

The media used to invest a lot of time denying they had a bias and an agenda, but the only people who believed them were on the Left, which had the odd effect of confirming they had a bias and an agenda.


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Phil's Favorites

A 2019 Earnings Recession?


A 2019 Earnings Recession?

Courtesy of 

Shout to Leigh!

On the new Talk Your Book – Josh Brown is joined by Leigh Drogen of Estimize, one of the leading providers of crowdsourced financial and economic data to talk about the trend in corporate profits that could potentially lead to an earnings recession later this year.

What is the thing that Leigh is seeing in the data that Wall Street isn’t yet picking up on? What segment of the stock market is most at risk? Why is the crowd smarter than the narrow consensus of Wall Street analysts?

Check out Estimize ...

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D.E. Shaw Investment Calls For Leadership Change At EQT

By ActivistInsight. Originally published at ValueWalk.

Elliott Management has offered to acquire QEP Resources for approximately $2.1 billion, contending the oil and gas explorer’s turnaround efforts have done little to lift the company’s share price. The company responded and said that a thorough review of the proposition is imperative in order to properly act in the best interests of shareholders, “taking into account the company’s other alternatives and current market conditions.” The news came only a month after Travelport Worldwide agreed to sell itself to Siris Capital Group and Elliott’s private equity arm Evergreen Coast Capital for $4.4 billion in cash and two months after Athenahealth was bought by Veritas and Evergreen for $5.7 bi...

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Kimble Charting Solutions

Gold & Silver Testing Important Breakout Levels!

Courtesy of Chris Kimble.

Gold and Silver from a long-term perspective have created a series of lower highs over the past 8-years. Will 2019 bring a change to this trend? A big test is in play!

Gold since the lows in 2016 has created a series of higher lows, while Silver may have created a double bottom.

Gold & Silver are currently facing break attempts a (1) and (2). These falling resistance lines have disappointed metals bulls for the past few years.

The direction of Gold and Silver weeks and months from now should be highly influenced by what each does as they are attempting to break above important resistance levels.

To become a member of Kimbl...

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Insider Scoop

UBS Says Disney's Streaming Ambition Gives It A 'New Hope'

Courtesy of Benzinga.

Related DIS Despite Some Risks, Analysts Still Expecting Double Digit Growth From Communications Services In Q4 ... more from Insider

Digital Currencies

Russia Prepares To Buy Up To $10 Billion In Bitcoin To Evade US Sanctions

Courtesy of Zero Hedge

While the market has been increasingly focused on the rising headwinds in the global economy in general, and China's economic slowdown in particular, while the media is obsessing over daily revelations that Trump may or may not have colluded with Russia to get elected, a far more critical, if underreported, shift has been taking place over the past year.

As we reported in June, whether due to concerns over draconian western sanctions and asset confiscations following the poisoning of former Russian military officer Sergei Skripal, or simply because it wanted to diversify away from the dollar, Russia liquidated virtually all of its Treasury holdings in the late spri...

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Chart School

Weekly Market Recap Jan 13, 2019

Courtesy of Blain.

In last week’s recap we asked:  “Has the Fed solved all the market’s problems in 1 speech?”

Thus far the market says yes!  As Guns n Roses preached – all we need is a little “patience”.  Four up days followed by a nominal down day Friday had the market following it’s normal pattern the past nearly 30 years – jumping whenever the Federal Reserve hints (or essentially says outright) it is here for the markets.   And in case you missed it the prior Friday, Chairman Powell came back out Thursday to reiterate the news – so…so… so… patient!

Fed Chairman Jerome Powell reinforced that message Thursday during a discussion at the Economic Club of Washington where he said that the central bank will be “fle...

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Members' Corner

Why Trump Can't Learn


Bill Eddy (lawyer, therapist, author) predicted Trump's failure based on his personality, which was evident years ago. This article, written in 2017, references a prescient article Bill wrote before Trump became president, in July, 2016, 5 Reasons Trump Can’t Learn. ~ Ilene 

Why Trump Can’t Learn

Donald Trump by Gage Skidmore (...

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Opening Pandora's Box: Gene editing and its consequences

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


Opening Pandora's Box: Gene editing and its consequences

Bacteriophage viruses infecting bacterial cells , Bacterial viruses. from

Courtesy of John Bergeron, McGill University

Today, the scientific community is aghast at the prospect of gene editing to create “designer” humans. Gene editing may be of greater consequence than climate change, or even the consequences of unleashing the energy of the atom.


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Mapping The Market

Trump: "I Won't Be Here" When It Blows Up

By Jean-Luc

Maybe we should simply try him for treason right now:

Trump on Coming Debt Crisis: ‘I Won’t Be Here’ When It Blows Up

The president thinks the balancing of the nation’s books is going to, ultimately, be a future president’s problem.

By Asawin Suebsaeng and Lachlan Markay, Daily Beast

The friction came to a head in early 2017 when senior officials offered Trump charts and graphics laying out the numbers and showing a “hockey stick” spike in the nationa...

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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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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:


·       How 2017 Will Affect Oil, the US Dollar and the European Union


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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...

Learn more About Phil >>

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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.

Market Shadows >>