Archive for September, 2011

Arch Coal Lowers Guidance For FY 2011; Spikes Sharply Lower

Courtesy of Benzinga.

Arch Coal (NYSE: ACI) today announced that it expects its adjusted earnings before interest, taxes, depreciation, depletion and amortization to be in the $900 million to $1.0 billion range for full year 2011, representing the highest level in company history but below the previous range given on July 29, 2011. The company also expects its 2011 adjusted earnings per diluted share to be in the range of $1.00 per share to $1.40 per share, subject to the final determination of purchase price accounting for the acquisition of International Coal Group.

S&P 500 Snapshot: Good Riddance, September!

Courtesy of Doug Short.

The S&P 500 has now closed the books on September, historically the weakest month of the year, with another grim statistic. The index was down 2.50% for the day and 7.18% for the month.

Among the many news items of the day, the two that especially resonate are the conflicting ECRI recession call and Warren Buffett’s assurances on CNBC that a recession is “very, very unlikely.”

Year-to-date the index is in the red at -10.04%, which is 17.03% below the interim high set on April 29.

From an intermediate perspective, the index is 67.2% above the March 2009 closing low and 27.7% below the nominal all-time high of October 2007.

Below are two charts of the index, with and without the 50 and 200-day moving averages.





For a better sense of how these declines figure into a larger historical context, here’s a long-term view of secular bull and bear markets in the S&P Composite since 1871.

For a bit of international flavor, here’s a chart series that includes an overlay of the S&P 500, the Dow Crash of 1929 and Great Depression, and the so-called L-shaped “recovery” of the Nikkei 225. I update these weekly.

These charts are not intended as a forecast but rather as a way to study the current market in relation to historic market cycles.





Market Snapshot: Worst Quarter For S&P 500 Since Q4 2008 And Second Best Ever For TSYs

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Equities ended on a very weak note, bringing the worst quarter since Q4 2008 for the S&P500 to an end. Stocks remain, perhaps remarkably to some, expensive relative to credit markets – especially HY which is feeling significant pain as issuance volumes drop 75% in the quarter to their lowest since Q2 2009. While stocks dropped around 2 standard deviations from a long-run mean, Treasuries did even better and rallied around 3.5 standard deviations – the second largest percentage shift in yields ever (once again Q4 2008 was the only better). Truly a remarkable day, week, month, and quarter and to be frank, one that shows no signs of slowing.

Quarterly percentage change in S&P 500 – down two standard deviations – highest since Q4 2008.

With Financials and Industrials bearing the brunt down around 19% and Utilities outperforming on the quarter in the US.

Quarterly percentage (yes I know that’s a little odd but given the range of yields over the period we thought it would make sense) in 30Y Treasuries – down 3.5 standard deviations – second largest drop ever.

Since the end of QE2, there has been significant weakness (obviously) and we recommended a QE-Unwind trade back on May 16th. It has performed rather well – besting the S&P 500 by over 21.5%.

Somewhat interestingly though, the US remains the best performer among global equity markets (in USD terms) with only Mexico and Switzerland beating it in local currency terms for the quarter. S&P 500 -14.33% QTD, Dow -12.09%. Perhaps more notable is the year-to-date numbers where US equities are the clear winner (so far…) and the Dow down only 5.7% (S&P -10%) – last two columns for local and USD-based returns.

and finally with everyone talking about the big rotation-allocation trade from bonds to stocks – bear in mind that these reallocations are not done in a vacuum but based on a risk-budget and the change in the VIX this quarter just broke all records – with a 4 standard deviation jump on the quarter – perhaps now the bonds vs equities divide will narrow as we have discussed at length (drawdowns and risk-returns).

A few other fun facts:

  • S&P 500 in constant USD terms (adjusted for DY that is) -9.8% QTD
  • Gold

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UPDATE: Verizon Appeals FCC Imposition of ‘Net Neutrality’ Rules

Courtesy of Benzinga.

Verizon Communications (NYSE: VZ) on Friday (Sept. 30) filed an appeal in the United States Court of Appeals for the District of Columbia Circuit of the Federal Communications Commission’s December 2010 Report and Order (FCC 10-201) adopting so-called “net neutrality” rules. The following statement should be attributed to Michael E. Glover, Verizon senior vice president and deputy general counsel:

“Verizon is fully committed to an open Internet. We are deeply concerned by the FCC’s assertion of broad authority to impose potentially sweeping and unneeded regulations on broadband networks and services and on the Internet itself. We believe this assertion of authority is inconsistent with the statute and will create uncertainty for the communications industry, innovators, investors and consumers.”

Momenta Pharmaceuticals Files for Preliminary Injunction Against Amphastar Pharmaceuticals, Inc., Watson Pharmaceuticals, Inc. and International Medical Systems, Ltd.

Courtesy of Benzinga.

Momenta Pharmaceuticals, Inc. (Nasdaq: MNTA) today announced that it has filed a request for a temporary restraining order and preliminary injunction to prevent Amphastar Pharmaceuticals, Inc., Watson Pharmaceuticals, Inc. and International Medical Systems, Ltd. from launching their enoxaparin sodium product in the United States.

Separately, on September 21, 2011 Momenta announced that it had sued Amphastar Pharmaceuticals, Inc., Watson Pharmaceuticals, Inc. and International Medical Systems, Ltd. in the United States District Court for the District of Massachusetts for infringement of two Momenta patents. The patents cover the company’s innovative methods of producing enoxaparin sodium, which assure that the commercial product meets standards for identity and quality. One patent, U.S. Patent No. 7,790,466, is related to methods of processing enoxaparin to determine the presence of certain tetrasaccharide structures. The second patent, U.S. Patent No. 7,575,886, is related to methods of analyzing enoxaparin for the presence of a certain structural signature.

We’re Getting Closer

Courtesy of ZeroHedge. View original post here.

Submitted by Bruce Krasting.

I couldn’t be more delighted than to see the DAX get tagged for 2.5% today. This is a consequence of the “Successful” vote yesterday in the German Parliament to throw more good money after bad. The hit (so far) to German investors comes to $40b. That should make them happy this weekend.

It’s not just investors that a giving the raspberry. According to this WSJ article yesterday, 75% of the folks in German are fed up with more bailouts.

A poll for national German broadcaster ZDF earlier this month shows three-quarters of Germans are against the expanded European rescue fund.

How can this happen? Politicians are doing what the voters don’t want. It can only mean that new politicians are coming and the bailouts will be curtailed.

Keep in mind that the expanded EFSF is still woefully inadequate to address the debt problem in the EU. There has to be a much bigger effort. In my view, anything less than Euro $2 Trillion is not going to work. A big bazooka is required, a popgun is being offered.

This brings us to the speculation this week about a Euro SPV. There was the “Leisman Plan” (I wanna puke) and the EURECA Plan. These are confusing to most people. Let me make it easy. What is being proposed are Euro Bonds in disguise. This is just financial engineering to cosmetically create a joint and several EU debt obligation.

This won’t work. The ratings agencies and investors will see through this. If something silly like this is going to come I would anticipate that Moody’s and S&P will downgrade both France and Germany within weeks. Everything that is being offered is just a half-assed effort to deal with a very big problem.

The conclusion for me is that the Euro has to continue to suffer on the crosses as a result.

I see the dollar as the backbone for the markets in general. In a “perfect” world an orderly depreciation of the dollar (5% a year) is a “good thing”. It supports US inflation (that makes debt look smaller). A weak dollar is beneficial for tourism, and encourages foreigners to buy real assets like real estate. It gives US manufacturers of big-ticket items (planes/construction equipment) a pricing…
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The AMD Event

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Nanex

On September 29, 2011, beginning at 14:08:25, quote rates from one stock, AMD, accounted for nearly half of all equity quotes. The pattern of data is similar to what we found in Dell a month earlier. There were 6 seconds that each had over 20,000 AMD quotes.

We are having trouble finding the appropriate superlative to describe the level of lunacy that generated this event, and the incompetence of regulators to allow it to continue. And continue it does: both in frequency and magnitude. Soon 20,000 quotes/second per stock will be the new normal.

This problem will only continue to grow until one day, when there is real market impacting news, there simply won’t be enough bandwidth or computing power to process legitimate equity prices. And everyone will wonder what happened. The last time this occurred was May 6, 2010.

Time #Quotes
14:08:25 4,126
14:08:26 15,390
14:08:27 13,260
14:08:28 20,517
14:08:29 25,687
14:08:30 27,089
14:08:31 24,702
14:08:33 11,279
14:08:34 2,696
14:08:35 16,619
14:08:36 13,351
14:08:39 20,871
14:08:40 23,563
14:08:41 5,171
14:08:49 1,233

AMD – ADVANCED MICRO DEVICES, Price and Sizes for 2 second period of 14:08:29, 14:08:30

Zoom in of previous chart showing the sequence:

The impact on CQS Line # 1 (Red). AMD quotes make up the majority of quotes on that line. Chart shows quotes/second on a 1 second interval.

Zoom in of previous chart showing quote traffic rates on a 50 ms interval.

Chart Of The Week: Monetary Chaos In The Bubble Years

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Via Sean Corrigan of Diapason Commodities

Here we show the divergence in sigmas from the mean of the stable, well-behaved, 43-year distribution laid out between 1952-1974 of the sectoral share of total domestic US holdings of money (currency + demand depos) which took place over the last wild, decade and a half of bubble and bust and outrageously suppressed interest rates…

…apart from the sheer scale of the disruptions involved since ‘Irrational Exuberance’,  note the underlying message that, given that they hold a higher fraction of the stuff than has traditionally been the case,  if you want to ‘mobilize’ the money in existence now, it is the willingness to do so of Non-financial BUSINESSES (both corporate and non-corporate) you need to encourage, a finding which further supports our oft-expressed contention that it is not the level of interest rates or currency parities, but the extreme degree of regime uncertainty which is the enervating factor and that this last is as much to blame for the current, sub-par recovery as it was in the FDR/Morgenthau/Eccles 1930s – and for similar reasons relating to the stultifying effect of an excess of overactive, arbitrary political intervention amid a patently incomplete liquidation of the mistakes of the prior Boom!!!

Startling Unpublished Keynes Equations Discovered (Friday Afternoon Humor)

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Ian Macallum, spokesman for the Royal & Ancient Historical Society of London, told Routers that the equations were contained in an unpublished manuscript which was found in the attic of an 18th century flat in Soho.

“We were skeptical when initially contacted by the current owners” said Macallum. “There is no record of Keynes ever having resided at that address.  But we can confirm that the manuscript is indeed an original work of Lord Keynes.”

The formulas seem to have been derived from the Navier-Stokes equations which describe the motion of fluid substances.

“It’s pure Keynesian genius” said former Fed Governor Fred Mishkin.  “There is a strong consensus among economists, at least within the Federal Reserve, that liquidity is the answer to the age-old question ‘what is the meaning of life?’”   So, it makes perfect sense that someone as brilliant as Keynes would adapt these equations to a framework for fiscal and monetary policy.”

Although very technical in original form, Moody’s Chief Economist Mark Zandi said the final derivation of the equations can be simplified to the following:

“Unless you’re a PhD economist, I think it’s impossible to appreciate the elegance of the final derivation: by raising every stimulus factor to the power of infinity, you immediately move the probability of future recessions to zero.  It’s brilliant.  The notion that ‘risk’ is a necessary component of free market capitalism will finally be discredited.”

Federal Reserve Chairman Ben Bernanke was equally sanguine.  “I’ve asked some of my fellow academics at CERN to begin modeling the equations with an array of neutrinos, mixed with a small amount of unconventional policy.  Even without the helicopter, it should be theoretically possible to achieve an economic growth rate faster than the speed of light.  Einstein was a monetarist, so I’ve always been skeptical of his Special Theory.  It is now painfully obvious that he should have raised ‘c’ to the power of infinity, not 2.”

“I’m still trying to catch my breath!” exclaimed Nobel Prize winning economist Paul Krugman.  “Literally, when I read the equations, I felt a chill down my spine and a tingle in my balls.  We can finally end the partisan bickering and get the global economy back on track.”

(Reporting by Linda Green of Routers News)

h/t John Lohman

First Solar Sells 550-Megawatt Desert Sunlight Solar Farm

Courtesy of Benzinga.

First Solar, Inc. (Nasdaq: FSLR) today announced completion of the sale of one of the world’s largest photovoltaic solar power projects – the 550-megawatt Desert Sunlight Solar Farm near Desert Center, Calif.



White House's fight against TikTok highlights China's tech dominance

By Giorgi Mikhelidze. Originally published at ValueWalk.

The tech industry is what truly drives the global economy today. Every sector is now supported by digital technology, innovation, and novelty. As a result, the country with the most major tech corporations can easily dominate the rest of the world. This is one of the key aspects of the currently ongoing China-US trade war. There have been continuous speculations about banning different Chinese companies from the US market due to security and other reasons.

Q2 2020 hedge fund letters, conferences and more

Notably, the Chinese digital technology ...

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Zero Hedge

Treasury Yields Are Tumbling Back To Record Lows

Courtesy of ZeroHedge View original post here.

Yesterday's brief interruption in the demise of yield (driven by rate-locks due to the massive Alphabet issuance), has ended with Treasury yields erasing the entire move and then some.

Source: Bloomberg

Aside from the flash-crash spike lows on March 9th, this is the lowest 10Y yields have been ever...

Source: Bloomberg

And st...

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The Technical Traders

Watch Chris Talk Corporate Earnings on Yahoo! Finance

Courtesy of Technical Traders

Out of the 312 companies in the S&P 500 that have reported earnings so far for the second quarter, 82.1% reported above analyst expectations, according to data from Refinitiv. Founder and Chief Market Strategist of “The Technical” Chris Vermeulen joins Yahoo Finance’s Akiko Fujita to discuss.

Learn more about our latest research and alerts on Gold, Silver, Oil, and Equities at


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Phil's Favorites

Momentum Monday - Digital Dominance...This Week Semiconductors and 5G


Momentum Monday – Digital Dominance…This Week Semiconductors and 5G

Courtesy of Howard Lindzon

Good Monday morning everyone.

As always here is this weeks Momentum Monday from Ivanhoff and I.

I walk through the Apple explosion to new highs and what that means for my stops and area where I would get defensive.

Google is the weakest of the FAANG stocks.

I shared some fresh ideas with Ivanhoff in the software and 5G sector which include $ESTC $SWKS $QRVO and $QCOM.

I hope you enjoy it.

I also wanted...

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There aren't enough batteries to electrify all cars - focus on trucks and buses instead


There aren't enough batteries to electrify all cars — focus on trucks and buses instead

Garbage trucks, buses and the van that delivers your Amazon purchases are all prime candidates for electrification. (Shutterstock)

Courtesy of Cameron Roberts, Carleton University

We need to change our transportation system, and we need to do it quickly.

Road transportation is a major consumer of fossil fuels, contributing 16 per cent of all human-caused greenhouse gas emissions, which warm up the Earth’s atmosphere and cause changes to the climate. It also ...

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Kimble Charting Solutions

Here's How To Buy The Top Stocks In The Hottest Sectors During The Covid Crisis

Courtesy of Chris Kimble

Tech has been the place to be during the Covid-19 crisis. Investors Business Daily recently highlighted how one can own the strongest of the strong by just owning one ETF (See article here).

This chart looks at the Dorsey Wright Focus Five index ETF (FV), which reflects that it is attempting a bullish breakout while creating higher lows over the past 6-years.

The $2.1 billion fund tracks the Dorsey Wright Focus Five Index, which provides access to five First Trust sector and industry ETFs. Dorsey Wright & Associates selects the funds based on relative price momentum, then weights the compone...

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Digital Currencies

Twitter Says "Human Error" And "Spear-Phishing Attack" Responsible For Massive Bitcoin Hack

Courtesy of ZeroHedge

Twitter suffered from a major hack about two weeks ago and has now said that its staff was tricked by "spear-phishing", which is a targeted attack to trick people into simply handing out their passwords. 

Twitter staff were targeted through their phones, according to a new report from the BBC. The attacks then allowed hackers the ability to Tweet from celebrity Twitter accounts. Twitter has said it was "taking a hard look" at how it could improve its permissions and processes.

"The attack on July 15, 2020, targeted a small number of employees through a phone spear phishing attack. This attack relied on ...

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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House


Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...

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Chart School

US Dollar Cycle Review

Courtesy of Read the Ticker

If investors can correctly forecast the US Dollar then their portfolio will be standing on better ground.

Jesse Livermore said investors must familiarise themselves with all matters of the market. The sine wave cycle below shows regular tops and bottoms and if the investor ignores this repeating phenomena it could be at their peril. If you decide to do so, you best have a good technical or fundamental reason.

The sine wave cycle below was found with 'Cycle Finder Spectrum' use of 'Bartels' logic. Yes it is mathematics, but within the site RTT Plus service we also examine the dollar fundamentals  (like: inflation, money s...

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Members' Corner

Coronavirus, 'Plandemic' and the seven traits of conspiratorial thinking


Coronavirus, 'Plandemic' and the seven traits of conspiratorial thinking

No matter the details of the plot, conspiracy theories follow common patterns of thought. Ranta Images/iStock/Getty Images Plus

Courtesy of John Cook, George Mason University; Sander van der Linden, University of Cambridge; Stephan Lewandowsky...

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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
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Free, Live Webinar on Stocks, Options and Trading Strategies

TODAY's LIVE webinar on stocks, options and trading strategy is open to all!

Feb. 26, 1pm EST

Click HERE to join the PSW weekly webinar at 1 pm EST.

Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

This week, we also have a special presentation from Mike Anton of It's a new service that we're excited to be a part of! 

Mike will show off the TradeExchange's new platform which you can try for free.  


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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:


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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. Contact Ilene to learn about our affiliate and content sharing programs.