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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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com. I offer a range of stock trading strategies for global markets which can be Previewed for Free with delayed trade signals. You can also view the top-10 best trading strategies for the US, UK, Europe and Rest-of-the-World in the Trading Strategy Marketplace Leaderboard. The Leaderboard also supports advanced search capability so you can tailor your strategies to suit your individual requirements.

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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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Phil's Favorites

Overpriced tech IPOs sell grand visions but aren't worth their valuations

 

Overpriced tech IPOs sell grand visions but aren't worth their valuations

rblfmr / Shutterstock.com

Courtesy of John Colley, Warwick Business School, University of Warwick

The year of the tech IPO is 2019. Uber went public on May 10 with a US$82.4 billion valuation. Fellow ride-sharing app Lyft floated in March with a U$24 billion valuation and Pinterest had a US$10 billion IPO in April...



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Zero Hedge

Futures Slides As Trade Tensions Escalate

Courtesy of ZeroHedge. View original post here.

S&P futures were lower on Wednesday as investors sought safety in bonds, the Japanese yen and Swiss franc in muted trade amid renewed worries over the U.S.-China spat after reports Washington is considering cutting off the flow of American technology to as many as five Chinese companies including Hangzhou Hikvision Digital Technology, the world's largest supplier of video surveillance products, expanding the US crackdown on China beyond Huawei to include world leaders in video surveillance. The dollar and 10Y yield were unchanged ahead of today's FOMC Minutes.

...



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Kimble Charting Solutions

Emerging Markets About To Submerge If 3-Year Support Breaks?

Courtesy of Chris Kimble.

Are Emerging Markets about to “Submerge” and head a good deal lower? What they do at (3) will go a long way in answering this question!

Emerging Markets ETF (EEM) has been lagging the broad market for the past 15-months. They hit their 50% retracement level of the last year’s highs and lows and falling resistance at (2) recently. The weakness of last has EEM trading below its 200-MA line.

EEM has spent the majority of the past 3-years inside of rising channel (1), which reflects that this trend remains up. The weakness of late has it testing the bo...



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Insider Scoop

Amgen To Buy Danish Collaborator Nuevolution For $167M

Courtesy of Benzinga.

Amgen, Inc. (NASDAQ: AMGN) took a logical step forward in buying a preclinical biotech it has been collaborating with since 2016. 

What Happened

Amgen announced Wednesday an agreement to buy Copenhagen-based Nuevolution for $167 million.

Th...



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Chart School

Weekly Market Recap May 18, 2019

Courtesy of Blain.

China – U.S. trade talk continued to dominate the week.   A heavy selloff Monday was followed by 3 up days, with Friday moderately down.

On Monday, Chinese officials announced retaliatory tariffs against the U.S., hitting $60 billion in annual exports to China with new or expanded duties that could reach 25%.

Then on Wednesday:

The Trump administration plans to delay a decision on instituting new tariffs on car and auto part imports for up to six months, according to media reports.

...

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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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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

...



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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 ...



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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

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...



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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.

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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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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