Archive for 2011

Please Welcome The Latest Currency Peg

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

For the last 45 minutes, USDJPY has been unable to shake loose of 79.2 by more than a pip or two. Following the SNB and their efforts with EURCHF, which as far as we recall is technically pegged at 1.20, is Azumi now pushing another of our freely floating foreign exchange currencies to a peg, as he soaks up any and all USDJPY offers under 79.20? Gold is down a little (in its knee-jerk response to USD strength reflecting off the JPY intervention) but one has to wonder if slowly but surely we are being reverted to the ‘rigidity’ of a gold standard? Lastly, we eagerly await to hear the justification for this unilateral defection by a G-X member 5 days ahead of the G-20 meeting in Cannes this Friday (and we can’t wait for Schumer and Geithner to proclaim Japan a currency manipulator). Lastly, to all those who so vehemently were debating whether the EURUSD is down or not earlier (when it opened lower), feel free to take a look at the EURUSD chart right…about…now – 150 pips that worthless semantics will never get you back.

It is also worth noting that ES just dropped below Friday’s lows as JPY crosses become useless carry-drivers (for the first time in many weeks/months).

Update as of 11:45 EDT - still flat as a frozen siberian lake.



After Six Standard Deviation Jump, USDJPY Intervention Loses 38.2% In 30 Minutes

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Thanks to Mr. Azumi’s clearly unique perspective on Japanese currency fundamentals, USDJPY managed to peak with a six standard deviation move, bested only by 10/28/08 (what a weekend) before all the way back to 1995. However, as always with his unilateral decisions, the market seems to know best and we have already given back over 38% of the drop. Interestingly, broad risk markets have not enjoyed this move at all as correlations are not helping the Japanese cause and ES continues to leak lower.

USDJPY has given back 120pips from its highs having retraced almost perfectly (for Fibonacci fans) 38.2%.

The 6 standard deviation jump is second only to the spike on 10/28/08 (what a great 3 year anniversary?). Is it something about Halloween that gets the BoJ going? Prior to this, the previous largest move was in 1995!!

With Regling’s comments on Japan’s ongoing commitment to buying EFSF bonds, perhaps Azumi was just making some room?

Furthermore, for some perspective on what this kind of move in EURJPY (or JPY crosses in general) ‘should’ have meant for ES (based on empirical correlations/deltas), ES is testing Friday’s lows around 1274 while the ‘model’ says it should be trading around 1299!!! Seems like risk-off is overwhelming Azumi’s efforts.


Courtesy of ZeroHedge. View original post here.

Submitted by williambanzai7.





THE RAVEN (Debts No More)

(Edgar Allen Poe, The Raven)


Once upon a midnight dreary, while insolvent weak and weary,
Over a balance sheet covered in a cloud of debts galore,
While I nodded, nearly napping, suddenly there came a tapping,
As of some one gently rapping, rapping at my chamber door.
`’Tis some visitor,’ I muttered, `tapping at my chamber door -
Only this, and nothing more.’

Ah, distinctly I remember it was bleak as Lehman’s September,
And each despicable creditor wrought its ghost upon the floor.
Eagerly I wished the morrow; – vainly I sought more to borrow
From my books surcease of sorrow – sorrow for the abundant days of yore -
And the rare and hidden debts of toxic bailout whores -
Nameless here for evermore.

And the silken sad uncertain rustling of each indentured debt just
Thrilled me – thrilled me with fantastic plastic Sino-crap never bought before;
So that now, to still the beating of my heart, I stood repeating
‘Tis some banksta entreating entrance at my chamber door -
My late payments entreating his entrance at my chamber door; -
This it is, and nothing more,’

Presently my soul grew stronger; hesitating then no longer,
`Sir,’ said I, `or Madam, truly your debt forgiveness I implore;
But the fact is I was napping, and so gently you came rapping,
And so faintly you came tapping, tapping at my chamber door,
That I scarce was sure I heard you’ – here I opened wide the door; -
Darkness there, and nothing more.

Deep into that darkness peering, long I stood there wondering, fearing,
Doubting, dreaming dreams no debt bloated mortal ever dared to dream before;
But the silence was unbroken, and the darkness gave no token,
And the only word there spoken was the whispered word, `Debts No More!’
This I whispered, and an echo murmured back the word, `Debts No More!’
Merely this and nothing more.

Back into the chamber turning, my bankrupt soul within me burning,
Soon again I heard a tapping somewhat louder than before.
`Surely,’ said I, `surely that is something at my window
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Yentervention Time

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Update: It’s Official 

  • AZUMI SAYS INTERVENTION WAS DUE TO STRONG SIGNS OF SPECULATION – thank god Mrs Watanabe is not speculating on the short side.

Just in time for the MF Global news, we have what appears the latest Yentervention episode, as the USDJPY has just soared over 250 pips.We have no confirmation as of yet and could be merely a risk off move on the MF Global headlines. Or, potentially, was MF short a few yards of USDJPY and now that the end is in sight, is promptly unwinding all legacy positions?

And longer term

Chart: BBG

Clearinghouses, Regulators Told To Prepare For MF Bankruptcy, Risk Off

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Just out from Bloomberg, citing the WSJ:


The EURUSD has tumbled 50 pips in the aftermath of the news as risk just moved to the Off position

Is Gold Over Or Undervalued? How About The EFSF (Europe = Fastow, Skilling & Fuld)

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

From Sean Corrigan

In an opinion piece of our own, instigated by the gentlemen at Gold Money, we were asked how we work out whether gold is over or undervalued at any given minute. What a question at the best of times, much less now!

What we came up with was the following, something which encapsulates a theme about which we have written much of late:?

What is ?value? in a world where the single goal of the powers that be is to deny the market the ability to have its constituents? underlying ordering of wants accurately reflected in the price structure?


We have no proper market in capital; severely impaired markets in any number of basic goods; false markets in real estate; distorted markets in labour (hence why so many poor souls are still without jobs); and no certainty about anything except the awful certainty that nothing is off?limits to those who are  desperately trying to put Humpty Dumpty together again in time for the next turn of the electoral cycle rather than accepting that he has shuffled off this mortal coil and that it would be better now to see whether at least we can salvage a half?decent omelette out of the remains?

And that pretty much sums up our commentary on the EFSF—the ‘’Excruciating Folly of Suspending Finality’ or ‘Endorsing Falsity to Succour the Few’, or perhaps just ‘Europe = Fastow, Skilling & Fuld’.

Its agreement has ignited a rally—at that, one which could technically unwind much of the preceding rout, unless some renewed problem surfaces from among the many, murky lacuna in the details of how this Archimedean earth?mover will actually be knitted together; not least among them the suggestion that such a nakedly cynical attempt to frustrate the existential purpose of the CDS market might render its whole, multi?trillion edifice unstable and so force a widespread  rebalancing of holdings across the physical bond market.

To the extent that the deal does succeed in heading off an immediate meltdown, some removal of risk premia seems entirely justified, but that is not to say that Europe’s problems are at an end, nor that the global economy does not now hover parlously between a stalling recovery and a renewed slump.…
continue reading

Investor Sentiment: The Best Gains are Behind Us

Courtesy of ZeroHedge. View original post here.

Submitted by thetechnicaltake.

I am not going to say I told you so because honestly, I had no knowledge of the current outcome.  All I know is that betting against the crowd — when that crowd is extremely bearish in their outlook towards equities — generally works out about 80% of the time with a reasonable draw down.  This time has been no different.  The SP500 has gained nearly 20% from its lows only 4 weeks ago.  While such gains are extraordinary, they really highlight two points.  One, the best, most accelerated gains occur while investors are bearish towards the market.  Two, with investor sentiment turning neutral, it is likely that the best gains are behind us.

As stated last week, seasonal factors, an expected positive resolution to macro economic events, and investors sitting on the sidelines wanting to get into this market will likely be positive factors.  As stated last week and the week before that, dips will be bought, and I don’t see that changing now.  The big change will be the decreasing acceleration in the rate at which gains will occur.

The “Dumb Money” indicator (see figure 1) looks for extremes in the data  from 4 different groups of investors who historically have been wrong on the market: 1) Investors Intelligence; 2) MarketVane; 3) American Association of Individual Investors; and 4) the put call ratio.   This indicator shows neutral sentiment, and this is a bull signal.

Figure 1. “Dumb Money”/ weekly

Figure 2 is a weekly chart of the SP500 with the InsiderScore “entire market” value in the lower panel.  From the InsiderScore weekly report:  “Insider trading volumes remained constrained last week as most executives and directors continued to be prohibited from buying/selling until after their respective companies’ Q3’11 earnings report. Activity did begin to pick-up towards the end of the tracking and will continue to do so as more and more companies announce results, but we won’t get a true macro tell for at least a week – if not two weeks. ” 

Figure 2. InsiderScore “Entire Market” value/ weekly

Figure 3 is a weekly chart of the SP500. The indicator in the lower panel measures all the assets in the Rydex bullish…
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MF Global Talking With Interactive Brokers – DealBook

Courtesy of Benzinga.

MF Global (NYSE: MF), the embattled commodities and derivatives broker led by former Goldman Sachs (NYSE: GS) and U.S. Senator Jon Corzine, is in talks regarding a potential deal with Interactive Brokers (Nasdaq: IBKR), DealBook reported, citing sources with knowledge of the matter.

MF Global, which has been evaluating a possible sale or a corporate restructuring, has also been in talks with Jefferies (NYSE: JEF), but MF is said to be focused on negotiations with Interactive Brokers, DealBook reported.

Shares of MF Global plunged about 70% last week and bond investors ran for the exits as well after the company’s credit rating was downgraded to junk status. MF Global has lost money in four of the past six quarters and last Monday reported a $186 million quarterly loss.

Exposure to European bonds and riskier trading practices have brought the New York-based brokerage firm to the brink.

Evercore Partners (NYSE: EVR) is advising MF Global. Evercore and Corzine reached out to major Wall Street firms last week looking for a buyer, according to DealBook.

Connecticut-based Interactive Brokers executes trades for both retail and institutional clients.

Presenting The Capeless Crusader: The Deficit (Non) Super Committee

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

While the soap opera in Europe lurches from one extreme to another, in the process creating substantial market knee jerk reactions, even though the final outcome is quite clear to most with cognitive bias blinders, the next major catalyst in the macro spectacle will come not from across the Atlantic, but from these here United States, in the form of the Super Duper Committee tasked with finding the $1.2 trillion in deficit cuts needed in order to make the August debt ceiling hike legitimate. As a reminder the debt back then was $14.4 trillion – tomorrow it will officially surpass $15 trillion for the first time ever, meaning that even as the Super Committee squabbles, half the benefit from its “successful” conclusion has already been implemented. And here is where Morgan Stanley’s David Greenlaw comes in with a piece in which he makes it all too clear that the Super Committee may be Clark Kent, but it sure is no Superman. “Press reports continue to suggest that the so-called Super Committee, established as part of the compromise agreement to hike the debt ceiling, is foundering. In recent days, Democrats and Republicans have offered competing plans that have little common ground. Republican members appear to remain committed to a no new taxes pledge, which will make it very difficult for the Committee to come anywhere close to its $1.2 trillion target.” In other words, just as nothing material or actionable (suffice for some grandiose delusions) came out of Europe, precisely the same will happen in the US, after our own dire fiscal situation is exposed for the naked emperor it is.

From the very same Morgan Stanley: “There is still a very wide range of possible outcomes, but our baseline expectation at this point is that the Super Committee will agree to $500 billion or so of deficit reduction (a significant portion of which may wind up being budgetary gimmickry that will not lead to any real deficit reduction). This means that $700 billion or so ($1.2 minus $0.5) of automatic deficit reduction would be slated to trigger in 2013. Of course, Congress and the Administration (either current or incoming) would still have an opportunity to override the automatic cuts at some later date.” It’s good that a major bank acknowledges that we have “budgetary
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Europe Looks to China

Courtesy of Patrick Chovanec 

First of all, a personal note and quick explanation:  last week, I had a medical emergency — nothing life-threatening, but enough to put me in the hospital and lay me low for a while.  I’m slowly on the mend, but for the past week I have had neither the energy nor the focus to author any blog posts, although I have been trying my best to keep up with the news.  So apologies for being ”radio silent” while so many interesting things have been going on.

The news these past couple of days has been dominated, of course, by the efforts of European Union leaders to reach a bailout agreement — and the fact that, immediately after the outlines of such an agreement were reached, the first thing the EU did was dispatch an envoy to Beijing, to persuade China to help fund the plan.  Arvind Subramanian, a scholar at the Peterson Institute and author of a new book called Eclipse: Living in the Shadow of China’s Economic Dominance (which argues, among other things, that the Renminbi will emerge as a global reserve currency sooner than anyone expects), caught the mood of the moment with a prominent op-ed in the New York Times titled “Why China Should Bail Out Europe.”  In it, he argues that China’s moment as a Great Power has arrived: that it can and should save Europe, and in doing so, ought to demand political and economic concessions, including a dominant role in running the International Monetary Fund:

China should demand nothing less than a wholesale revamping of the governance of the I.M.F. to reflect the current economic realities. Governance reform can no longer be just about the nationality of the I.M.F.’s managing director but should fundamentally be about who will have the greatest voice and exercise the most power in the new world . . . Supplicants, China should insist, cannot have veto power in a financial institution. The Chinese government could then trumpet a nationalist achievement — equal status as the United States, and a greater status than that of Europe, in running the world’s premier financial institution — as the return for investing its cash abroad.

I haven’t had the chance to read Subramanian’s book in full (although I look forward to doing so), so I’m not going to undertake here to rebut his broader thesis.  But in this particular instance, China’s role in the EU bailout,…
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Zero Hedge

Americans' Economic Hope Has Collapsed

Courtesy of ZeroHedge. View original post here.

Which came first, the confidence or the stock market rally?

One thing is for sure, the crash in stocks in December has crushed the hope of Americans that their economic future is going to be better under President Trump.

Overall confidence dipped to 58.1 - a 4-month low, but, U.S. consumers this month were the most downbeat on the economy since November 2016, a third straight drop after expectations reached a 16-year high just three months earlier, as the partial government shutdown wears on toward a fourth week.


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Kimble Charting Solutions

Triple Breakout Test In Play For S&P 500!

Courtesy of Chris Kimble.

Is the rally of late about to run out of steam or is a major breakout about to take place in the S&P 500? What happens at current prices should go a long way in determining this question.

This chart looks at the equal weight S&P 500 ETF (RSP) on a daily basis over the past 15-months.

The rally from the lows on Christmas Eve has RSP testing the top of a newly formed falling channel while testing the underneath side of the 2018 trading range and its falling 50-day moving average at (1).

At this time RPS is facing a triple resistance test. Wil...

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Phil's Favorites

Brexit deal flops, Theresa May survives -- so what happens now?


Brexit deal flops, Theresa May survives -- so what happens now?

Courtesy of Victoria Honeyman, University of Leeds

As the clock ticks down to March 29 2019, all of the political manoeuvring, negotiating, arguing and fighting is coming to a peak. In the two and a half years since the 2016 EU referendum, views on both sides have hardened and agreement still seems as far away as it was the day after the referendum.

With Theresa May’s withdrawal agreement disliked by all sides, and voted down by an unprecedented majority in the House of Commons, everyone is wondering what can and should be done next?


more from Ilene

Digital Currencies

Crypto-Bubble: Will Bitcoin Bottom In February Or Has It Already?

Courtesy of Michelle Jones via

The new year has been relatively good for the price of bitcoin after a spectacular collapse of the cryptocurrency bubble in 2018. It’s up notably since the middle of December and traded around the psychological level of $4,000... so is this a sign that the crypto market is about to recover?

Of course, it depends on who you ask, but one analyst discovered a pattern which might point to a bottom next month.

A year after the cryptocurrency bubble popped


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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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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

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 chaotic presidency based on his high-conflict personality, which was evident years ago. This post, written in 2017, references a prescient article Bill wrote before Trump even became president, 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...

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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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