Archive for May, 2012

The Stock-Bond Disconnect

Courtesy of Doug Short.

Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.


Think about this: Yields/rates are hitting all-time lows. In the past when yields were collapsing, stocks were going right along with them. Yields tanked in 2008 and so did stocks!

Now yields are setting new lows, but where is the S&P 500? Not that far off of its 2012 highs and only 92% above its 2009 lows.

Does that reflect relative strength?

Check out the S&P 500 chart below with the “Stock/Bond ratio” inset.

 

 

The $1 question: Are yields oversold/stocks at a low or do stocks have to fall a ton and play a game of catch up with yields?

 

(c) Kimble Charting Solutions
blog.kimblechartingsolutions.com

 

 

 

 





Moving Averages: Month-End Update

Courtesy of Doug Short.

Valid until the market close on June 29, 2012

The S&P 500 closed May with a whopping loss of 6.27% from the April close. The 10-month exponential moving average signal has switched to cash. See the specifics here.

The Ivy Portfolio

The table below shows the current 10-month simple moving average (SMA) signal for each of the five ETFs featured in The Ivy Portfolio. I’ve also included a table of 12-month SMAs for the same ETFs for this popular alternative strategy.

Backtesting Moving Averages

Monthly Close Signals Over the past few years I’ve used Excel to track the performance of various moving-average timing strategies. But now I use the backtesting tools available on the ETFReplay.com website. Anyone who is interested in market timing with ETFs should have a look at this website. Here are the two tools I most frequently use:

Background on Moving Averages

Buying and selling based on a moving average of monthly closes can be an effective strategy for managing the risk of severe loss from major bear markets. In essence, when the monthly close of the index is above the moving average value, you hold the index. When the index closes below, you move to cash. The disadvantage is that it never gets you out at the top or back in at the bottom. Also, it can produce the occasional whipsaw (short-term buy or sell signal), such as we’ve occasionally experienced over the past year.

Nevertheless, a chart of the S&P 500 monthly closes since 1995 shows that a 10- or 12-month simple moving average (SMA) strategy would have insured participation in most of the upside price movement while dramatically reducing losses.

The 10-month exponential moving average (EMA) is a slight variant on the simple moving average. This version mathematically increases the weighting of newer data in the 10-month sequence. Since 1995 it has produced fewer whipsaws than the equivalent simple moving average, although it was a month slower to signal a sell after these two market tops.

A look back at the 10- and 12-month moving averages in the Dow during the Crash of 1929 and Great Depression shows…
continue reading





ZH Evening Wrap Up 5/31/12

Courtesy of ZeroHedge. View original post here.

Submitted by CrownThomas.

 

Some Headlines From Today

- Morgan Stanley's Gorman defends handling of Facebook IPO

- Spain says it has at least until October to raise enough funds to rescue Bankia

- Newly issued Mortgage Backed Securities see record low yields

- Weekly Jobless claims come in at 383,000

- New York City Will now tell you what to drink

- Goldman Sachs says it can't cut salaries any further…

 

On a long enough timeline 

- China's Manufacturing PMI Plunges

- Your daily Biderman rant

- What does high yield credit know that stocks don't?

- Student Debt Bubble Delinquencies Surge

- I want to work at the Goldman Sachs





Guest Post: Myths and Realities of Returning to a Gold Standard

Myths and Realities of Returning to a Gold Standard

By Terry Coxon, Casey Research

The gold standard, under which any holder of paper dollars could redeem them for gold at the US Treasury, is now within the living memory of just a few million Americans, nearly all of whom would be dangerous behind the wheel. But thanks to the money printing and the federal deficits that have grown to astounding scales since 2008, and thanks also to the clashing pronouncements of Ron Paul and Ben Bernanke, the idea of a gold standard has resurfaced in the public's consciousness.

I'm happy to see the concept enjoying a revival. Reading about it in the mainstream press and hearing it mentioned on the cable news shows makes me feel a little less like a Martian. It has almost made me feel avant-garde.

Despite my enjoyment of the revival, I've noticed that the idea seldom is presented as a clear and definite proposal or as an invitation to revisit an institution that worked well in the past. Too often, it shows up as little more than a slogan or a taunt aimed at central bankers or as just a political fashion statement. So let's take a closer look at what it really means. It's not that complicated.

What Isn't at Stake

The abolition of the gold standard has been the source of considerable mischief, but it hasn't been the source of all mischief.

I've heard the lack of a gold standard indicted as part of a government scheme to force the public to use paper money. It isn't.

The legal-tender laws are usually part of the story, but the story doesn't hold up. Declaring irredeemable paper dollars to be legal tender merely defines what a creditor may be forced to accept in satisfaction of a debt that is denominated in dollars. Operating under that regime is entirely voluntary; if you don't like it, you can avoid it by declining to accept anyone's IOU or other promise denominated in dollars. Despite the legal-tender laws that define what is a (paper) dollar, you are free to buy and sell and enter into contracts without using dollars.

The legal-tender laws amount to no more than the government's claim that it owns "dollar" as a trademark that it can apply to pieces of paper or to anything else it decides to – just as General Motors…
continue reading





U.S. Labels ALL Young Men In Battle Zones As “Militants” … And American Soil Is Now Considered a Battle Zone

Courtesy of ZeroHedge. View original post here.

Submitted by George Washington.

Preface: If this is too intense for you, look at this instead.

Glenn Greenwald has two must-read posts on the reason that virtually everyone the U.S. kills is called a “militant” or “suspected militant”.

He wrote Monday:

glenn headlines 460x307 U.S. Labels ALL Young Men In Battle Zones As Militants ... And American Soil Is Now Considered a Battle Zone

 

Virtually every time the U.S. fires a missile from a drone and ends the lives of Muslims, American media outlets dutifully trumpet in headlines that the dead were ”militants” – even though those media outlets literally do not have the slightest idea of who was actually killed. They simply cite always-unnamed “officials” claiming that the dead were “militants.” It’s the most obvious and inexcusable form of rank propaganda: media outlets continuously propagating a vital claim without having the slightest idea if it’s true.

 

This practice continues even though key Obama officials have been caught lying, a term used advisedly, about how many civilians they’re killing. I’ve written and said many times before that in American media discourse, the definition of “militant” is any human being whose life is extinguished when an American missile or bomb detonates (that term was even used when Anwar Awlaki’s 16-year-old American son, Abdulrahman, was killed by a U.S. drone in Yemen two weeks after a drone killed his father, even though nobody claims the teenager was anything but completely innocent: “Another U.S. Drone Strike Kills Militants in Yemen”).

 

This morning, the New York Times has a very lengthy and detailed article about President Obama’s counter-Terrorism policies based on interviews with “three dozen of his current and former advisers.” I’m writing separately about the numerous revelations contained in that article, but want specifically to highlight this one vital passage about how the Obama administration determines who is a “militant.” The article explains that Obama’s rhetorical emphasis on avoiding civilian deaths “did not significantly change” the drone program, because Obama himself simply expanded the definition of a “militant” to ensure that it includes virtually everyone killed by his drone strikes. Just read this remarkable passage:

 

Mr. Obama embraced a disputed method for counting civilian casualties that did little to box him in. It in effect counts all military-age males in a


continue reading





China PMI Plunges Most In 28 Months, Reverts To HSBC’s Reality

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Color us not stunned at all. China’s Manufacturing PMI finally reverted to the reality that HSBC’s Manufacturing PMI has been arguing for and fell for the first time in six months. The drop is the largest since February 2010. While still above 50 (though the lowest level of expansion in five months), or 50.4 technically, down from 53.4, and missing expectations of 52.0, it seems another engine of global growth just sputtered finally – as the real impact of a European depression and fiscally challenged US hit home.

And as a reminder, here is why unless “Europe is fixed” and quite soon, the situation will first get worse before it gets much worse:





Market Recap & Facebook Finally Turns Bullish Thanks to Late Day Rally

Courtesy of Blain.

Intraday swings were sporadic once again today. Both the S&P 500 and NASDAQ found support at even marks (1300 and 2800, respectively). Despite the doji close though, the rising channel broke to the downside for the NASDAQ.

Looking at tomorrow, a fresh employment report is on the docket which could very well effect the market. For a closer look at what to expect head over to the Daily Ticker.

On the plus side, Facebook (FB) finally found a legitimate bottom at the $27 level (intraday low today was $26.83). Once support was established early afternoon the stock just took off around 2:30 PM EST and did not stop until the close, adding about 10% in less than two hours. Being a bullish engulfment accompanied by heavy volume, this signals atleast a short term bottom and gives the stock something to move up from. Here is a look at Facebook’s intraday price action from my TD Ameritrade thinkorswim account (daily chart further down),

As usual there will be no recap tomorrow (Friday). Updated market analysis is below. Have a fantastic weekend!

And to wrap up tonight’s post here is a look at sector performance for the month of May from StockCharts.com. As we can see here Finance was the worst performer while Utilities held up strong despite the tough market.





Belligerent Bears Batter BNI’s ‘Buffett-Black-Swan’ Bet

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Was it just a week ago that we suggested buying Burlington Northern CDS (credit protection) as the cheapest Black-Swan bet against Buffett and Bernanke’s ebullience? The answer is yes. And from the start of May the cost of protection has doubled from around 15bps to just over 30bps – quite a surge as it seems more than a few funds thought this a worthwhile trade to tuck in the back pocket at a minimal carry cost. At 32bps mid (31/34), it remains cheap still from a carry perspective and while we are approaching the initial profit target, the reason for buying this low cost, long vol trade is the huge convexity upside should things go a little more pear-shaped for the Octogenarian-of-Omaha – or more specifically for the US equities in general. We do note that if this keeps pushing past our other profit-targets then some should be covered since counterparty risk will rapidly become an issue (unless the Fed officially becomes a CCP).

 

Chart: Bloomberg





Will June Look Like May? (SPY, DIA, QQQ, IWM, TLT)

Courtesy of John Nyaradi.

sell in mayMay was downright ugly and June could bring more gloom to world stock markets and exchange traded funds

Today marked the end of May and this year’s performance certainly validated the “sell in May and go away” mantra that we oftentimes hear in the popular press.

Until May, major  U.S. indexes had put in a half year winning streak  but that all ended today with the Dow Jones Industrial Average (NYSEARCA:DIA) dropping 0.2% to finish out the month with a 6.2% loss.  The S&P 500 (NYSEARCA:SPY) suffered a similar fate with a monthly decline of 6.3% and the Nasdaq (NYSEARCA:QQQ) gave up 0.4% today to tally a monthly loss of 7.2%. The Russell 2000 (NYSEARCA:IWM) index of small cap stocks joined in the not so happy party by dropping 8.1% for the month.

The month’s losses were driven by chaos in Greece and Spain and fear over a financial demise of the Euro and Eurozone economies and an ongoing slew of economic reports that point to slowing economies in the United States, Europe and China.

Today’s reports were mostly gloomy, as well, as private payrolls reports from ADP came in below expectations, weekly  jobless claims rose, 1Q GDP estimate was revised downward to 1.9% from the most recent 2.2% and Chicago PMI for May declined to 52.7 from last month’s 56.2%.  Anything above 50 in this reports indicates expansion but clearly the numbers are decelerating as we move into the summer months.

Of course, worries over Europe were a big driver of global markets this month as policy makers struggled with Spain’s banking crisis and the Greek elections rapidly approach on June 17th.  Both of these situations have the potential to be both Euro-negative and stock market negative as we move into June.

Global indexes were also slammed in May as worries mounted, with Spain’s IBEX leading the way south with a decline of 13%, the German DAX dropping 7.3%, Hong Kong off 12% and the Nikkei dropping 10% for the month.

But, as always, there were winners and losers and in the winning column we find U.S. Treasuries, iShares 20+ Year Treasury Bond Fund (NYSEARCA:TLT) +9.6% for the month and Vanguard Extended Duration ETF (NYSEARCA:EDV) logging + 15.01% for May.

Bonds are at or near record lows with the 10 year U.S. Treasury
continue reading





“The End Game: 2012 And 2013 Will Usher In The End” – The Scariest Presentation Ever?

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

If Raoul Pal was some doomsday spouting windbag, writing in all caps, arbitrarily pasting together disparate charts to create 200 page slideshows, it would be easy to ignore him. He isn’t. The founder of Global Macro Investor “previously co-managed the GLG Global Macro Fund in London for GLG Partners, one of the largest hedge fund groups in the world. Raoul came to GLG from Goldman Sachs where he co-managed the hedge fund sales business in Equities and Equity Derivatives in Europe… Raoul Pal retired from managing client money in 2004 at the age of 36 and now lives on the Valencian coast of Spain, from where he writes.” It is his writing we are concerned about, and specifically his latest presentation, which is, for lack of a better word, the most disturbing and scary forecast of the future of the world we have ever seen….

And we see a lot of those.

Consider this:

  • We are here…

  • We don’t know exactly what is to come, but we can all join the very few dots from where we are now, to the collapse of the first major bank…
  • With very limited room for government bailouts, we can very easily join the next dots from the first bank closure to the collapse of the whole European banking system, and then to the bankruptcy of the governments themselves.
  • There are almost no brakes in the system to stop this, and almost no one realises the seriousness of the situation.
  • The problem is not Government debt per se. The real problem is that the $70 trillion in G10 debt is the collateral for $700 trillion in derivatives…
  • Yes, that equates to 1200% of Global GDP and it rests on very, very weak foundations
  • From an EU crisis, we only have to join one dot for a UK crisis of equal magnitude.
  • And then do you think Japan and China would not be next?
  • And then do you think the US would survive unscathed?
  • That is the end of the fractional reserve banking system and of fiat money.
  • It is the big RESET.

It continues:

  • Bonds will be stuck at 1% in the US, Germany, UK and Japan (for this phase).
  • The whole bond market will be


continue reading





 
 
 

Phil's Favorites

Negative Interest Rates Spread To Mortgage Bonds

Courtesy of John Rubino, DollarCollapse.com

There are trillions of dollars of bonds in the world with negative yields – a fact with which future historians will find baffling.

Until now those negative yields have been limited to the safest types of bonds issued by governments and major corporations. But this week a new category of negative-yielding paper joined the party: mortgage-backed bonds.

Bankers Stunned as Negative Rates Sweep Across Danish Mortgages

(Investing.com) – At the biggest mortgage bank in the world’s largest covered-bond market, ...



more from Ilene

Zero Hedge

Negative Interest Rates Spread To Mortgage Bonds

Courtesy of John Rubino, DollarCollapse.com

There are trillions of dollars of bonds in the world with negative yields – a fact with which future historians will find baffling.

Until now those negative yields have been limited to the safest types of bonds issued by governments and major corporations. But this week a new category of negative-yielding paper joined the party: mortgage-backed bonds.

Bankers Stunned as Negative Rates Sweep Across Danish Mortgages

(Investing.com) – At the biggest mortgage bank in the world’s largest covered-bond market, ...



more from Tyler

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 ...



http://www.insidercow.com/ 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...



more from Kimble C.S.

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 readtheticker.com we believe a combination of Gann Angles, ...

more from Chart School

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 ...



more from Bitcoin

Biotech

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

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

 

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

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

Courtesy of David M. Gilbert, Florida State University

...



more from Biotech

ValueWalk

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

By Jacob Wolinsky. Originally published at ValueWalk.

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

rawpixel / Pixabay

Friends and Fellow Investors:

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



more from ValueWalk

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...



more from Our Members

Mapping The Market

It's Not Capitalism, it's Crony Capitalism

A good start from :

It's Not Capitalism, it's Crony Capitalism

Excerpt:

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

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



more from M.T.M.

OpTrader

Swing trading portfolio - week of September 11th, 2017

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

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



more from OpTrader

Promotions

Free eBook - "My Top Strategies for 2017"

 

 

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

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

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

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

Some other great content in this free eBook includes:

 

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

...

more from Promotions





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 >>


As Seen On:




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 >>