Archive for 2012

Weighing the Week Ahead: Will the Fed Disappoint the Markets?

Courtesy of Doug Short.

Get ready for a week of renewed focus on the Fed. No one expects a policy change, but there is plenty of room for disappointment.

In the new era of Fed communications there will be plenty to analyze, including the following:

  1. The FOMC statement, which can be carefully parsed for small wording changes and evidence of disagreement or dissent;
  2. The updated economic outlook;
  3. Updated projections from each FOMC member, with a report showing ranges and central tendencies;
  4. A press conference where Bernanke will try to explain it all.

Most of this transparency is pretty new, and it is still controversial. One reason is obvious.

In the old days, when no one expected a policy change, there would be no reason for fixation on the Fed. There is now much more to analyze.

I’ll offer my ideas on what to expect in the conclusion. First, let us do our regular review of last week’s news and data.

Background on “Weighing the Week Ahead”

There are many good sources for a comprehensive weekly review. I single out what will be most important in the coming week. My theme is an expert guess about what we will be watching on TV and reading in the mainstream media. It is a focus on what I think is important for my trading and client portfolios.

Unlike my other articles at “A Dash” I am not trying to develop a focused, logical argument with supporting data on a single theme. I am sharing conclusions. Sometimes these are topics that I have already written about, and others are on my agenda. I am trying to put the news in context.

Readers often disagree with my conclusions. Do not be bashful. Join in and comment about what we should expect in the days ahead. This weekly piece emphasizes my opinions about what is really important and how to put the news in context. I have had great success with my approach, but feel free to disagree. That is what makes a market!

Last Week’s Data

Each week I break down events into good and bad. Often there is “ugly” and on rare occasion something really good. My working definition of “good” has two components:

  1. The news is market-friendly. Our personal policy preferences are not relevant


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The Anti-Goldilocks? China’s HSBC Flash PMI Beats But Contraction Remains

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

China’s April HSBC Flash PMI came slightly stronger than expected but suggests manufacturing may remain in a contractionary state for the sixth month in a row. The problem for all those stimulus junkies is that while it does suggest contraction, the data rose modestly from last month’s final HSBC Manufacturing PMI print. So is this data not cold enough for massive stimulus (which Australia must be craving given tonight’s dismal PPI print) and not warm enough for the ‘double-rip’ camp and the expected hockey-stick in global growth that is to occur any moment now? For now the market seems on the fence.





Europe’s EFSF ‘Firewall’ Risk At 3 Month Highs, Accelerating At Fastest Rate In 6 Months

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

The last two weeks have seen the market’s perception of the risk of Europe’s ‘firewall’ rise at its fastest rate in six months (the peak of the crisis). At 142bps wider than Bunds, EFSF bonds now trade at their widest in three months and look set to break out to peak-crisis levels. We are sure the Japanese will still back-up-the-truck at the next issuance of self-referential ponzi bonds, but not only is the credit risk of this staggering CDO rising fast, as Bloomberg notes, the market’s anticipation of the PPCs (Partial Protection Certificates), that – akin to CDS – provide an uncollateralized protection for ‘some’ of the potential losses investors may face in buying sovereign debt at issuance, is dreary at best and “not something that appears immediately hugely attractive”. CDS already trade on these bonds and the only willing players taking advantage of that market in size are the basis traders currently; as real money “will buy peripheral bonds outright, because they’re attractive enough, or they won’t buy them at all, and financial engineering [is not] necessarily going to change that dynamic.” Just as we have again and again pointed out, the reality is that investors have seen through these self-guaranteed and ‘irrelevantly convoluted’ attempts to kick the can and Draghi’s rejection of the IMF-Geithner calls for more crisis-fighting (as noted by Bloomberg this evening) – arguing that they have done enough by cutting rates and issuing bank loans, perhaps reflects a Europe that knows it is on the brink. This was further reinforced by the Bundesbank’s Joachim Nagel, who, in a moment of sublime reality-awareness, ruled out any direct EFSF ‘help’ to the banks “as that would pass on the risk of a bank bailout to all European taxpayers” – but why does Geithner care so much – we thought US banks were ‘safe’ and unexposed to Europe (eh Jamie?).

EFSF Bond Spread to Bunds – widest in 3 months and fast two-week rise in six months…

And as if one needed reminding, European GDP-weighted sovereign risk is back at 3 month highs…

and one last reminder of just what US credit traders think of US financials relative to US equity traders (even as the Europeans remain in agreement on the uncertainty)…

 

Charts: Bloomberg





Here Is What The “Other” Financial Health Metrics Are Showing

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

For all those starry-eyed readers of Floyd Norris’ New York Times real-estate column this morning who have been out viewing new homes this afternoon and already scratching together the down-payment with the family’s EBT cards, we have a little contextual reality checking. Norris points to the factual reality that a broad ratio of all financial obligations – both homeowners and renters – relative to disposable income stands at an impressive-sounding lowest level since 1984, and uses this wondrous statistic, in its sublime uniqueness, as an indication to suggest the consumer may be coming back as the household debt burden has been so reduced from a record 14% of disposable income to a ‘mere’ 10.9% now indicating just what good little deleveraging beings we Americans have been.

 

Norris’s justification for a bright shining new consumer-driven reality as real-estate must go up from here (given the deleveraging and ‘cheapness’ relative to income)…

However, as Nomura noted so clearly this week, this statistic is just a small part of everything when we consider the balance sheet (and not just cash-flow) of the household, ‘many homeowners are likely to take little comfort from the decline in average debt service costs relative to incomes.’ For millions of homeowners whose property is now worth less than the debt used to finance it, mortgage interest costs may be more usefully gauged relative to the equity they retain in their homes.

Mortgage Debt Servicing Relative to Housing Equity…oops! Not quite such a pretty picture…

For them, these monthly debt service payments are necessary to retain their claim on an asset whose value has fallen and might not recover as the $3.7tn negative-equity ‘gap’ should remind us that the economic crisis of the past decade has taught a new generation a painful lesson about the dangers of excessive debt.

Debt and net-equity in owner-occupied housing…

 

This is the sad reality that millions of households face every month and while the mainstream continue to push the old ‘new’ normal of the new-new American Dream, with Norris’ own hope-laden words so prescient a reflection of this anchoring bias: “the outlook is seldom as bleak as it seems in the immediate aftermath of a calamity”, we remind those with animal-spirit-hopers that the economic crisis of the past decade has
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Latest April Trading Jobs

Courtesy of Declan Fallon

Trading related jobs for the week include:

East Power Basis and FTR Trader – 12010741 – Houston, TX
Real-time Power Trader – Houston, TX
Bilingual Japanese US Equity Sales & Equity Trader – $0 – 90K
ABCP Trader – Associate: $0-120K; New York
Equities Trader – New York
ABCP Trader – Securitization; $90-120K; New York
Experienced Trader (44-518)
Junior Trader ($8-518); Chicago
Quantitative Derivatives Trader – New York.
Sr. Strategic Metal Trader – Charlotte
Desktop Support/Technical Support IV
Foreign Exchange Junior Trader; $50K – New York
Senior G10 Rates Trader – 12007756; New York
Financial Assistant ($14.25-16.50/hour); Pittsburgh
Trading Software Support Specialist; Chicago ($44-62K)
Commodity Trading Sales Representative

Client Service Representative
Trading Markets Sales Representative – Agriculture
Quant Developer – New York
Financial Advisors / Stock Brokers and Trainees; New York
Financial Advisor & Trainees
Trading Assistant; $25-60K

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Hearing Amylin Considering Sale -Reuters

Courtesy of Benzinga.

Amylin (NASDAQ: AMLN) is considering a sale of the company, according to sources cited by Reuters. Amylin is attempting to fight off a law suit by investor Carl Icahn. The company recently rejected a $3.5 billion takeover offer from Bristol-Myers Squibb (NYSE: BMY).


For more Benzinga, visit Benzinga Professional Service, Value Investor, and Stocks Under $5.





Guest Post: SS Agents And Prostitutes- Another Case Of The Worst Rising To The Top

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by James Miller, chief blogger at the Ludwig von Mises Institute of Canada

SS Agents and Prostitutes- Another Case of the Worst Rising to the Top

Austrian economist F.A. Hayek’s most famous work, The Road to Serfdom, is renowned for identifying two general rules in regards to politics and the state.  As the title of the book suggests, Hayek was keenly aware of the massive centralization of power taking place during the World War II era as Keynesianism took off and planned economies seemed like the next, natural step in the art of governing.  He correctly warned that economic intervention begets further intervention which would eventually lead to totalitarianism.

To reinforce this claim, Hayek explained a truth which haunts all those vying for public office.  Because the state, by definition, acts as a monopoly of force and predation, those who seek to brandish its authority don’t always have the most charitable intentions in mind as they clearly prefer an occupation of violence over harmonious enterprise in the private sector.  As Hayek writes:

Advancement within a totalitarian group or party depends largely on a willingness to do immoral things. The principle that the end justifies the means, which in individualist ethics is regarded as the denial of all morals, in collectivist ethics becomes necessarily the supreme rule.

While Hayek wrote on the mindset one needs to be successful in implementing the state’s various decrees, this type of behavior often spills over into otherwise unrelated government activities.  Such delinquency is fostered by the fact that those who operate within the public sector have little regard for the money and privileges designated to them as it is paid for on the backs of taxpayers and not from their own personal funds.  One of these embarrassing (for the ruling class, not those forced to support them) moments came to pass recently in Colombia as a few Secret Service personnel, tasked with preparing a summit venue for a visit by President Obama, were caught both soliciting high end call girls and stiffing them after the deed was done.  From the National Post:

WASHINGTON — The U.S. Secret Service said Wednesday that three employees will leave their jobs over the sex scandal in a hotel in Colombia which…
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Weekly Makret Commentary: Attempt at Support

Courtesy of Declan Fallon

Markets posted gains in what appears to be a test of support. Breadth also dug its heels in, although it’s not at at an area where strong swing lows develop.

The Russell 2000 is attempting support at the 2010/11 neckline, but it may yet require a channel test to firm up a lasting swing low.

The Dow dug in at the 2011 swing high c 12,825, although the MACD switched to a ‘sell’ trigger.

The Nasdaq remains well above its nearest support level which makes it difficult to predict where buyers may step in. The MACD is close to a ‘sell’ trigger, but isn’t there yet.

The Percentage of Nasdaq Stocks Above the 50-day MA is again attempting a swing low after the last one in March failed. Note, stochastics are a long way from an oversold condition.

Although the Summation Index is still bearish and is probably a few weeks away from a bottom.

The indices and supporting breadth give a mixed message which suggests it could be another week of indecision for the markets.  The Dow and Russell 2000 are trading nearest support and offer the lowest risk for new buys.  Shorts don’t have a lot  to work with – yet.

—-

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Israel’s Key Energy Provider, Egypt, Cuts Off All Natural Gas Supplies

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Two months ago, we warned that while the world had decided to blissfully move on from last year’s topic #1, the MENA revolutions, and specifically the massive power vacuum left in their wake, things in the region were far from fixed. Quite the contrary, and as we added back then “it is very likely that the Mediterranean region, flanked on one side by the broke European countries of Greece, Italy, Spain (and implicitly Portugal), and on the other by the unstable powder keg of post-revolutionary Libya and Egypt, will likely become quite active yet again. Only this time, in addition to social and economic upheavals, a religious flavor may also be added to the mix”. Yet nobody cared as after a year of daily videos showing Molotov Cocktails dropping like flies, people had simply gotten habituated and needed some other source of excitement. Nobody cared also when a week ago Art Cashin warned that the hidden geopolitcal risk is not Spain but Egypt. Today, Egypt just reminded at least one country why perhaps caution about the instability caused by having a military in charge of the most populous Arabic country and the one boasting “the Canal”, should have been heeded after Egypt just announced that it is cutting off its natural gas supplies to Israel, which just so happens relies on Egypt for 40% of its energy needs.

From Reuters:

Egypt’s energy companies have terminated a long-term deal to supply Israel with gas after the cross-border pipeline sustained months of sabotage since a revolt last year, a stakeholder in the deal said on Sunday.

 

Ampal-American Israel Corporation, a partner in the East Mediterreanean Gas Company (EMG), which operates the pipeline, said the Egyptian companies involved had notified EMG they were “terminating the gas and purchase agreement”.

And judging by the sound and fury emanating from Israel the move was hardly expected:

The company said in a statement that the Egyptian General Petroleum Corporation and Egyptian Natural Gas Holding Company had notified them of the decision, adding that “EMG considers the termination attempt unlawful and in bad faith, and consequently demanded its withdrawal”.

 

It said EMG, Ampal, and EMG’s other international shareholders were “considering


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How to Trade the Pain in Spain and Europe (EUO, DRR)

Courtesy of John Nyaradi.

spain flagTrade The Pain In Spain For Gain In Spain and in Europe

The pain in Spain for the last few weeks and the pain in Europe for the last year have worn down investors who have witnessed near disaster and catastrophe in Greece, Italy, and now the Eurozone’s 5th largest economy, Spain.  Spain has certainly felt the pain lately, and any default or Spanish collapse would almost surely lead to complete destruction of the Euro and global economy.  With almost everything at stake, investors have very few options to reap benefits from this situation, unless of course you factor in trading with inverse Exchange Traded Funds.

ETFs give investors enormous flexibility in scary financial situations because of their abilities to short specific markets within a brokerage account.  Furthermore, ETFs give investors the flexibility to rapidly change his or her ETF trades to adjust to the very fluid European situation, particularly if Europe turns really ugly.  So, how does an investor turn Spain and Europe pain into solid gain?

To give a re-cap of the Spain mess and Europe at large: last week, several Spanish bond auctions occurred, in which bond yields hovered around 5.743%, a few points lower than the psychological “7%” danger zone.  A report also indicated that the rate of Spanish non-performing bonds increased from 7.91% in February to 8.16% in March, a significant increase from the previous month and previous years’ rates.  Furthermore, Spain’s IBEX 35 Stock Exchange broke an additional psychological barrier, the “7000” mark last Thursday, by closing in the red at 6,967 points, further exacerbating the situation and further illustrating the fact that investors are indeed losing confidence in the country and the Eurozone at large.

If all of this was not enough to contend with, France is in hot water, too, as the country lost its “AAA” credit rating by Standard & Poors earlier in the year, in addition to the worry that the Socialists’ candidate, Francios Hollande, who has been labeled “anti-finance” and anti-Euro, will win in the upcoming French elections and possibly de-rail any European Union progress.  With France selling bonds last week at an average of 3.09% last week, it is clear that investors do have more faith in France, albeit worries that France and Germany alone cannot save the likes of Spain, Italy, Greece, Portugal, or Ireland.

So, after all of the doomsday…
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Zero Hedge

Johns Hopkins, Bristol-Myers Face $1 Billion Suit For Infecting Guatemalan Hookers With Syphilis 

Courtesy of ZeroHedge. View original post here.

A federal judge in Maryland said Johns Hopkins University, pharmaceutical company Bristol-Myers Squibb and the Rockefeller Foundation must face a $1 billion lawsuit over their roles in a top-secret program in the 1940s ran by the US government that injected hundreds of Guatemalans with syphilis, reported Reuters.

Several doctors from Hopkins an...



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ValueWalk

The Competition For Capital Has Made Stocks Cheap

By Michelle Jones. Originally published at ValueWalk.

The new year is upon us, and now is the time many investors look at what 2018 was and prepare for what 2019 might be. Recession jitters are starting to pick back up again, especially now that the full picture of 2018 is in the books. But what if you could pick only one theme for 2018? Jefferies strategist Sean Darby and team have a suggestion which is especially timely given that it appears to mark the end of an era.

StockSnap / PixabayVolatility carries into the new year

This past year was one of extremes, and the markets ended i...



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Phil's Favorites

Divisive economics

 

Guest author David Brin — scientist, technology consultant, best-selling author and futurist — explores the records of Democrats and Republicans on the US economy in the following post. For David's latest posts, visit the CONTRARY BRIN blog. For his books and short stories, visit his web...



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Kimble Charting Solutions

Stock declines did not break 9-year support, says Joe Friday

Courtesy of Chris Kimble.

We often hear “Stocks take an escalator up and an elevator down!” No doubt stocks did experience a swift decline from the September highs to the Christmas eve lows. Looks like the “elevator” part of the phrase came true as 2018 was coming to an end.

The first part of the “stocks take an escalator up” seems to still be in play as well despite the swift decline of late.

Joe Friday Just The Facts Ma’am- All of these indices hit long-term rising support on Christmas Eve at each (1), where support held and rallies have followed.

If you find long-term perspectives helpf...



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Digital Currencies

Transparency and privacy: Empowering people through blockchain

 

Transparency and privacy: Empowering people through blockchain

Blockchain technologies can empower people by allowing them more control over their user data. Shutterstock

Courtesy of Ajay Kumar Shrestha, University of Saskatchewan

Blockchain has already proven its huge influence on the financial world with its first application in the form of cryptocurrencies such as Bitcoin. It might not be long before its impact is felt everywhere.

Blockchain is a secure chain of digital records that exist on multiple computers simultaneously so no record can be erased or falsified. The...



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Insider Scoop

Cars.com Explores Strategic Alternatives, Analyst Sees Possible Sale Price Around $30 Per Share

Courtesy of Benzinga.

Related 44 Biggest Movers From Yesterday 38 Stocks Moving In Wednesday's Mid-Day Session ...

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Chart School

Weekly Market Recap Jan 13, 2019

Courtesy of Blain.

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

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

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



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Members' Corner

Why Trump Can't Learn

 

Bill Eddy (lawyer, therapist, author) predicted Trump's 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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Biotech

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 www.shutterstock.com

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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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 ...



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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.

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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. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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