Archive for 2011

Ongoing Overnight Short Squeeze Takes Silver To Fresh 31 Year High

Courtesy of Tyler Durden

Silver takes out $33.10, hitting a fresh 31 year high, as the relentless short squeeze leads to more body bags, and the only flight to safety currency is now the non-dilutable one (with gold on the verge of $1,400). Only $20 more to go until the all time Hunt Brother record is smashed – one/two more revolutions should do it; even better: hopefully the CME hikes margins next week: that would bring $40 silver 24 hours later. And on a more somber note, please join us for a moment of silence in remembrance of the great, the legendary, the soon to be departed Blythe Masters whose most recent zero margin, infinite PM short contraption has just sang its swan song.

18 Sobering Facts Which Prove That The Middle Class Is Not Being Included In This “Economic Recovery”

This article by Michael is filled with despair and presents evidence that the recovery in the stock market resembles the price of bread in Zimbabwe more than it does a real economic recovery. – Ilene 

18 Sobering Facts Which Prove That The Middle Class Is Not Being Included In This “Economic Recovery”

Courtesy of Michael Snyder, Economic Collapse

Have you heard the news?  The stock market is absolutely soaring and according to the U.S. government and the Federal Reserve we are in the beginning stages of a robust economic recovery.  Yippee!  The S&P 500 is up 6.8 percent so far in 2011, and the stock market recently hit a two and a half year high.  So shouldn’t we all be celebrating?  Well, if stock market performance was an accurate measure of economic health, then Zimbabwe would have had one of the healthiest economies on the entire globe during the last decade. 

But just like Zimbabwe’s stock market was artificially pumped up with "funny money" that was rapidly being devalued, so is ours.  All of the "quantitative easing" that the Federal Reserve has been doing is pumping plenty of money into the financial markets and is helping to inflate a false stock market bubble, but it is doing very little to alleviate the suffering of the U.S. middle class.  In fact, when you take a closer look at the numbers you quickly find out that the suffering of the middle class is getting even worse.

According to Gallup, the unemployment rate is now over 10%.  The number of Americans that have given up looking for work recently set a new all-time record.  The number of mortgages in foreclosure tied a record high during the fourth quarter of 2010.  Gas and food prices are rising rapidly.  The number of Americans on food stamps continues to increase every single month.

Yes, right now the economic situation is not in free fall like it was a couple years ago.  We should be thankful for that.  Periods of relative stability such as we are enjoying now will be few and far between in the years ahead.  This "bubble" of economic calm is a great opportunity that we should all be taking advantage of.

However, those that are hoping that this is an economic "turning point" and that things will soon be back to "normal" are going to be greatly disappointed.  This is about as "normal"…
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A Tale of Crudes: Anybody Got A Big Rig?

Courtesy of asiablues

By Dian L. Chu, EconForecat Big Rig Tanker Truck

On Wednesday, Feb. 16 Israel said Iran is sending two warships into the Suez Canal on way to Syria, and that the action is considered a “provocation.”  Due to the long history of bad blood between Israel and Iran, this very possible scenario was enough to even send the bear-infested NYMEX crude oil futures volume surging midday.

West Texas Intermediate (WTI) on Nymex rose to just below $85, while Brent crude on the ICE futures exchange spiked $2.17 higher to $103.81 a barrel--a 29-month high--widening the WTI-Brent spread to a new record near $19. 

High Middle East Tension

Then on Friday, Feb. 18, AFP reported that permission has been granted for Iranian warships to transit the Suez Canal into the Mediterranean.  Canal officials say it would be the first time Iranian warships have made the passage since the 1979 Islamic revolution, while Israel has labeled the Iranian action as “hostile’ and said Israel was closely monitoring the situation.

As the worst Israel-Iran conflict scenario failed to materialize, at the close Friday Feb. 18, Brent crude oil for April settled at $102.79 while WTI for April delivery rose to $89.71, narrowing the spread to $13.11.   

Crude Glut at Cushing, OK

Since WTI is lighter and sweeter crude which requires less processing, it has historically enjoyed a $1 – $2 a barrel price premium to Brent crude oil.  According to Bloomberg, the WTI-Brent gap averaged only 76 cents last year.

However, WTI’s premium disappeared about a year ago and in recent days it has been trading at more than a $10/bbl discount to Brent mainly due to rising inventory levels at Cushing OK, the delivery and price settling point of Nymex crude futures (See Chart).  ??

Source: Bianco Research via The Absurd Report

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On Rick Santelli’s “Meet The Press” Appearance, A $113 Trillion Future Rounding Error, And The Metamorphosis Of The American Dream To A Nightmare

Courtesy of Tyler Durden, Zero Hedge 

Today, appearing on Meet The Press, in addition to Susan Rice, Dick Durbin, Lindsey Graham, Jennifer Granholm, Harold Ford, and Ed Gillespie was CNBC’s uber contrarian voice, Rick Santelli. The topic: reigning in government spending, a topic which will be with America until its last bond issuance, sometime in the next 5 years. And while Rick was quite subdued this time around (it seems the CBOT voice only sees red when confronted with the likes of Steve Liesman), he did compare the crisis facing America now to the events from 9/11… "I think this is an issue that needs to be put out into the air and see--many, many other states, ultimately, might have--not have the same balance sheet as Wisconsin, but I think, ultimately, collective bargaining, even from a federal level, these are big issues, and these costs need to be put under control.  If the country is ever attacked like it was in 9/11, we all respond with a sense of urgency. What’s going on on balance sheets throughout the country is the same type of attack."

He also noted the critical Illinois muni situation whose alternative is a forced austerity plan (and considering that various Wisconsin politicans received death threats over what is finally being perceived a loss in some entitlement benefits, the outcome of inevitable austerity in America will not be pretty): "Senator Durbin is from my state:  $3.7 billion muni issuance that they need to bring to the market.  They haven’t paid vendors.  You know, it has come to the crossroads where if we don’t start to make the changes that the governor and the congressman know are going to take time, we will have austerity forced on us, and that type of austerity is going to be much messier.  There really isn’t much opportunity for debate here.  We do need action." But most importantly is the realization that nobody has any idea what to do, and as an article just penned by the Global and Mail screams, "Wake up, Americans. Your economic dream is a nightmare." Luckily, with everyone’s head in the sand, nobody really minds.

Clip from Meet the Press (and full transript here):

Visit for breaking news,…
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Are Wisconsin Protests a Harbinger of Doom for Municipal Bonds?

Courtesy of Jr. Deputy Accountant

 pic credit: moonbattery

Are Wisconsin protests a harbinger of doom for muni bonds? John Carney seems to think so.

While muni bond holders in Wisconsin shouldn’t have much to worry about in the weeks and months ahead, there are greater fools out there (like California debt-holders) who should be sweating right about now. 

Martin J. Bennett argues via California Progess Report that California public employees aren’t the problem:

According to the California Budget Project (CBP), [California has] the second lowest ratio of state workers per 10,000 residents in the nation. In addition, more than 70,000 public sector jobs have been eliminated in California since the crash of 2008, and public sector job loss is proportionately greater in California than in most other states.

Does the CBP calculate that number counting California’s 2.5 million illegal immigrants or whatever official number it is we’re using today? (It’s supposed to be somewhere around 7% of California’s entire population) Perhaps a large reason why illegal immigrants are not demonized in the state is because it can be really convenient to add them in to prove our statistical points, especially when defending not only the large number of public employees in California but the large lifetime benefits they reap for being such.

Anyway, how many there are doesn’t matter. It comes down to the political choices lawmakers in broke states will make when it comes to paying the bills and keeping their promises. What’s scarier, an angry mob of teachers or a bunch of hedge fund guys ticked off at you?

Carney via CNBC:

But a victory by the unions in Wisconsin could embolden state workers in states with far worse finances. Politicians worried about similar revolts might consider it better politics to force muni bond holders to accept haircuts. After all, hedge fund and mutual fund managers are not likely to fill the streets of the state capital or win the sympathy of members of the state legislatures.

Much of the bullish case for munis depends on the belief that states and localities will behave rationally and predictably when it comes to their debt payments. In Wisconsin, however, we’re seeing these assumptions fall apart. Political risk is alive and well.

Better politics? I doubt politicians have the ability to adopt a fuck or be fuckedposition when it comes to staying…
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Weekly Market Commentary: Nasdaq Breakout

Courtesy of Declan Fallon

It was another good week for bulls. The Nasdaq was finally able to break above 2,818 resistance – turning it into new support.



The Nasdaq 100 continued to add to its breakout. It has gone well beyond nearest support and is some 300 points off a measured move target. Can it make it to 2,700?



However, the Nasdaq Bullish Percents are struggling at overbought levels; not many new stocks are available to support the rally.



With the bearish divergence more evident in the Percentage of Nasdaq Stocks above the 50-day MA. Since the peak in the 80s from the 2009 low the percentage of Nasdaq Stocks above the 50-day MA is down at 63%. When it drops below 50% rapid declines in the market frequently result.



Small Caps added a second week of gains. The push off the bull flag continues to gather bullish momentum.



The S&P was good enough to add a percentage point on the week.



The same bearish divergences are playing out in S&P market breadth as for the Nasdaq. The NYSE Summation Index is just shy of resistance. Although a ‘buy’ trigger was generated in the supporting MACD.



And at 89% the S&P Bullish Percents can’t get more bullish.



The rally is still very much in play. While it’s hard to expect every week to be a winner it’s going to be a hard rally to break. Bearish divergences in supporting market breadth suggests a correction is likely to occur sooner rather than later. But this correction is unlikely to break the broader trend higher. The cyclical bull market continues…

Seeing Red

Seeing Red on the chart below signifies the worst of the worst. Gold is good. There are five categories in which the U.S. rates among the worst of the worst: income inequality, food insecurity, life expectancy at birth, prison population and math scores. The life expectancy at birth score may be misleading because some countries may not keep as thorough records of live births as the U.S. does, and I believe the definition of "live birth" is not straight-forward — that would be something to look into if so inclined. – Ilene

Courtesy of Michael Panzner of Financial Armageddon 

I don’t necessarily agree with New York Times’ columnist Charles M. Blow’s underlying premise in "Empire at the End of Decadence" that now is not the time to "scrimp on nonsecurity discretionary spending."

Among other things, a great many of the decisions — spending and otherwise — that our leaders made before and after the financial crisis struck contributed to (and exacerbated) the fiscal mess we are in today.

That said, it’s hard to argue against his assertion that the United States is not what it was.

It’s time for us to stop lying to ourselves about this country.

America is great in many ways, but on a whole host of measures — some of which are shown in the accompanying chart — we have become the laggards of the industrialized world. Not only are we not No. 1 — “U.S.A.! U.S.A.!” — we are among the worst of the worst.

Yet this reality and the urgency that it ushers in is too hard for many Americans to digest. They would prefer to continue to bathe in platitudes about America’s greatness, to view our eroding empire through the gauzy vapors of past grandeur.

In fact, a graphic accompanying Mr. Blow’s commentary makes it clear — to all but the most color-blind of observers -- just how far down the economic, political, social, and geopolitical ladder we’ve fallen [highlighting mine].


 Click on chart to enlarge.

Does A Surging Gold Price Mean The Fed Will Be Forced To Sell Treasurys?

Courtesy of Tyler Durden

As part of GATA’s ongoing crusade against the Fed’s gold price manipulation efforts, the organization recently succeeded in extracting some novel clues on how and why the Fed views its sworn duty as keeping the price of gold low. While much of the requested documents demanded by GATA in a lawsuit with the Fed have been exempt from disclosure under the law, one that was made public consists of the minutes of a private meeting of the G-10 Gold and Foreign Exchange Committee in April 1997. And while we will leave it up to our readers to parse through the bulk of the comments (attached below), we would like to draw attention to one, attributed to Peter R. Fisher, head of open market operations and foreign exchange trading for the Federal Reserve Bank of New York, or in other words the equivalent of our very own Brian Sack. Fisher’s comment relates to what would happen to the Fed’s securities portfolio should there be a sudden or gradual revaluation in the price of gold. His conclusion is that in order to keep the Fed’s balance sheet stable, an (acknowledged) surge in the price of gold would lead to a forced selling in Treasurys. Of course, that would mean that the Fed would have to actually value gold at its actual market price, instead of that relic price of $42.22 per ounce. Which means that valuing gold at fair market value would result in dumping over $300 billion in Treasurys, something the Fed can not afford to do at a time when it is engaged in purchasing $100+ billion each month.

To wit:

Fisher explained that U.S. gold belongs to the Treasury. However, the Treasury had issued gold certificates to the Reserve Banks, and so gold (by these means) also appears on the Federal Reserve balance sheet. If there were to be a revaluation of gold, the certificates would also be revalued upwards; however [to prevent the Fed's balance sheet from expanding] this would lead to sales of government securities. So the net benefit to Treasury would need to be carefully calculated, since sales of government securities would expand the public portfolio of government securities and hence also expand the Treasury’s debt servicing burden.

To an extent we agree with GATA’s summary of the…
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ETF News Update:The Little Market That Could (SPY, IWM, SLV, DIA)

Courtesy of John Nyaradi

Today’s ETF market reminds me of the classic children’s story, “The Little Engine That Could” and its unforgettable refrain, “I think I can, I think I can” as the little engine struggled up the hill against seemingly insurmountable obstacles.

On low volume and in the face of revolution abroad and at home, gathering inflationary storm clouds and weakness in Europe, “the little market that could” keeps climbing and passing significant milestones along the way

At Wall Street Sector Selector we remain positioned to take advantage of “the little market that could,” and recently closed an ETF option position in our Option Master Portfolio for a 48% gain in 11 calendar days. Positions in our ETF Standard portfolio show unrealized gains/losses of -3%, 0%, +2.7%, +3.1% and +1.3% for recently entered trades while the High Conviction (leveraged ETF) Portfolio has unrealized gains of +4.4% and +4.7% in its two positions. So after a rocky start in January, it seems that we’re on a more positive vector for February.

Premium Products Members will receive your ETF Trade Alert on Monday evening this week due to markets being closed Monday for President’s Day.

On My Radar

Chart courtesy of

Looking at the “big picture” of “the little market that could,” we see a chart that seems to be “forever overbought,” as demonstrated by RSI in the top of the graph and Stochastic at the bottom.

Plus the S&P cleared the psychologically significant level of 1332 which is roughly a 100% gain off the lows of March, 2009, so that has been quite a rapid recovery, indeed.

Now “dips” are little more than momentary burps as markets have become convinced that any “correction” will be quickly be repaired by the easy money of the Fed and the world has absolutely become addicted to the flow of liquidity that has been coursing around the world for lo these many months.

Of course, as the old saying goes, “nothing lasts forever,” but for now we will climb the mountain with the little engine, even though the ride down the other side promises to be terrifying indeed for those who fail to get off at or near the summit. But the downside will offer equal opportunity by virtue of our ability to “short” the market using inverse ETFs.

The View From 35,000 Feet

This week seemed to be…
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What Inflation Means to You: Inside the Consumer Price Index

Courtesy of Doug Short

Note from dshort: The charts below have been updated to include the latest Consumer Price Index news release for the January data.

The Fed justified the current round of quantitative easing “to promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate” (full text). In effect, the Fed is trying to increase inflation, operating at the macro level. But what does an increase in inflation mean at the micro level — specifically to your household?

Let’s do some analysis of the Consumer Price Index, the best known measure of inflation. The Bureau of Labor Statistics (BLS) divides all expenditures into eight categories and assigns a relative size to each. The pie chart below illustrates the components of the Consumer Price Index for Urban Consumers, the CPI-U, which I’ll refer to hereafter as the CPI.

The slices are listed in the order used by the BLS in their tables, not the relative size. The first three follow the traditional order of urgency: food, shelter, and clothing. Transportation comes before Medical Care, and Recreation precedes lumped category of Education and Communication. Other Goods and Services refers to a bizarre grab-bag of odd fellows, including tobacco, cosmetics, financial services, and funeral expenses. For a complete breakdown and relative weights of all the subcategories of the eight categories, see table 3 in the BLS’s monthly Consumer Price Index Detailed Report.

The chart below shows the cumulative percent change in price for each of the eight categories since 2000.

Not surprisingly, Medical Care has been the fastest growing category. At the opposite end, Apparel has actually been deflating since 2000. Another unique feature of Apparel is the obvious seasonal volatility of the contour.

Transportation is the other category with high volatility — much more dramatic and irregular than the seasonality of Apparel. Transportation includes a wide range of subcategories. The volatility is largely driven by the Motor Fuel subcategory. For example, the spike in gasoline above $4-a-gallon in 2008 is readily apparent in the chart.

The Ominous Shadow
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Zero Hedge

Will The US Slap Sanctions On Nord Stream 2?

Courtesy of ZeroHedge. View original post here.

Authored by Nick Cunningham via,

There is a growing push in the U.S. Congress to slap sanctions on the Nord Stream 2 pipeline.

The pipeline under construction would carry Russian natural gas to Germany, and has been a lightning rod of controversy both in Europe and across the Atlantic. Many governments and officials from Eastern Europe fear deeper dependence on Russia for gas supplies, a sentiment echoed by the U.S. government. Meanwhile, many in Western Europe are less concerned,...

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Phil's Favorites

US is already fighting a conflict with Iran - an economic war that is hurting the wrong people


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US is already fighting a conflict with Iran – an economic war that is hurting the wrong people

Courtesy of David Cortright, University of Notre Dame

Many are worried about the risk of war with Iran after the Trump administration leaked discussions of a troop deployment in response to claimed threats to U.S. warships in the region.

And in r...

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Insider Scoop

Jefferies Sees 60-Percent Upside In Aphria Shares, Says Buy The Dip

Courtesy of Benzinga.

After a red-hot start to 2019, Canadian cannabis producer Aphria Inc (NYSE: APHA) has run out of steam, tumbling more than 31 percent in the past three months.

Despite the recent weakness, one Wall Street analyst said Friday that the stock has 30-percent upside potential. 

The Analyst

Jefferies analyst ... more from Insider

Kimble Charting Solutions

DAX (Germany) About To Send A Bearish Message To The S&P 500?

Courtesy of Chris Kimble.

Is the DAX index from Germany about to send a bearish message to stocks in Europe and the States? Sure could!

This chart looks at the DAX over the past 9-years. It’s spent the majority of the past 8-years inside of rising channel (1), creating a series of higher lows and higher highs.

It looks to have created a “Double Top” as it was kissing the underside of the rising channel last year at (2).

After creating the potential double top, the DAX index has continued to create a series of lower highs, while experiencing a bearish divergence with the S...

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Chart School

Brexit Joke - Cant be serious all the time

Courtesy of Read the Ticker.

Alistair Williams comedian nails it, thank god for good humour! Prime Minister May the negotiator. Not!

Alistair Williams Comedian youtube

This is a classic! ha!

Fundamentals are important, and so is market timing, here at we believe a combination of Gann Angles, ...

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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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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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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


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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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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