Archive for 2012

The Collapse of the Athens Index: Update

Courtesy of Doug Short.

Note from dshort: As I type this note, the Greek election is just a few hours away. The general perception is that none of the political parties will win a parliamentary majority. At the request of a reader, here is an updated snapshot of the Greek stock market, one month after my initial post on the topic.


Last month I read a couple of interesting commentaries by familiar pundits at Project Syndicate on the ongoing disaster in Greece. PIMCO’s PMohamed El-Erian asks the rhetorical question Who is Responsible for the Greek Tragedy? Nouriel Roubini states unequivocally that Greece Must Exit the Eurozone.

The latest Greek unemployment rate, data through March, is at a record 21.9% and 52.8% in the 15-24 age group, up from 42% a year ago. The country, having failed to elect a government, has sworn in a caretaker technocratic cabinet to govern until new elections on June 17.

Of the many grim facts about the situation in Greece, here is a snapshot of one of the ugliest. The Athens Stock Exchange General Index is a capitalization-weighted index of Greek stocks listed on the Athens Stock Exchange. As of Friday’s close, the index had risen 13.71% for the week but is nevertheless down 89.5% from its all-time high at the end of October in 2007.

 

 

To put this stock market catastrophe into a larger historical context, here is an overlay of the Dow Crash of 1929 and the Crash of the Athens Index.

 

 

The crash of the Dow was a bit faster, but on June 5th, the Athens Index hit its trough to date, down 91.07% from its 2007 all-time high. We’ll soon discover the outcome of the next round of elections for the birthplace of democracy.

 

 

 

 

 

 





Weighing the Week Ahead: Can the Fed Meet Expectations?

Courtesy of Doug Short.

In the absence of any action on fiscal policy, economic responsibility rests with monetary authorities. Investors rightly ask:

What more can the Fed do? Will it be enough?

In normal times, this would be the big story. This time the week ahead will start with the Greek election and the aftermath, which I covered in a special preview. This article focuses on what to watch after we digest the news from Greece.

Christina Romer, back at the Berkeley econ department after serving as Chair for the Council of Economic Advisers for the Obama Administration offers this assessment in the New York Times.

“…(W)e need more effective fiscal and housing policies. But neither is likely to happen, at least not before the presidential election. As a result, the Fed is the only plausible source of immediate help for the American economy. It was set up as an independent body precisely so that somebody can do what’s right when politicians can’t or won’t.

I find a related argument even more frustrating: that the Fed shouldn’t act because Congress wouldn’t like it and might retaliate. This argument exposes the important truth that the Fed is only as independent as Congress lets it be”.

Cardiff Garcia at FT Alphaville has a nice FOMC preview with odds, a good flowchart from Credit Suisse, and a number of helpful links. Conclusion: Something, probably more twisting.

Everyone wants to politicize the Fed, making it much more difficult for investors. We should focus on how the actual decisions will affect the economy.

I’ll offer some more thoughts on this in the conclusion, but first let’s do our regular review of the events and data from last week.

Background on “Weighing the Week Ahead”

There are many good sources for a list of upcoming events. With foreign markets setting the tone for US trading on many days, I especially like the comprehensive calendar from Forexpros. There is also helpful descriptive and historical information on each item.

In contrast, I highlight a smaller group of events. 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.

This is unlike my other articles at “A Dash” where I develop a…
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SocGen’s Take on the Greek Elections and What Happens Next

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

SocGen summarizes today's Greek elections and their implication:

What next in Greece? As we head to press, the preliminary results (82.5% of national vote counted) of the Greek general election show 130 seats out of 300 seats to the pro-programme New Democracy Party and 33 seats to PASOK, combined the two pro-programme parties should thus have secured enough seats to form a unity government. The largest anti-programme party, Syriza, secured 71 seats, making it the second biggest party in parliament. Sunday evening, Presidents Van Rompuy and Barroso issued a statement welcoming the election outcome and noting that “The second Greek adjustment programme <..> is the basis upon which to build to foster growth, prosperity and jobs for the Greek people. We stand ready to continue assisting Greece in achieving these goals”. We expect to soon see a renegotiation of the target dates and a real effort to free up structural funds, etc. for Greece.

MARKET ISSUES: Greek euro exit fears are likely to ease for now, but even in this best case outcome, Greece will continue to struggle to meet programme targets and renegotiation with a possible third programme for Greece will soon have to be addressed. Moreover, this does not solve the fundamental issues weighing on Spain and Italy.

And as an added bonus: the French bank's take on the NEW QE:

Will the Fed adopt QE3? Yes! Will it help? Only at the margin. With economic data signalling stall speed growth for the US, we expect the Fed to lower its current 2012 growth outlook from 2.7%, narrowing the gap to our own forecast of 1.8%. This – and the risks from the euro area debt crisis – will allow the Fed to adopt QE3 at the June 20 FOMC. We estimate the Fed could extend twist by another $150bn, but our expectation is that the Fed will instead allow its balance sheet to expand a further $600bn, with purchases split 40/60% between MBS and Treasuries.

MARKET ISSUES: Opinions are increasingly divided as to whether additional QE will help – some even fear it could be counterproductive. QE works through three channels (1) the interest channel (borrowing conditions), (2) the US dollar (competitiveness) and (3) asset prices (wealth effect). We have long held the view that each new round of


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Investor Sentiment: Poof!

Courtesy of ZeroHedge. View original post here.

Submitted by thetechnicaltake.

Last week’s bullish signal in the “dumb money” indicator has come and gone just like that – poof! I guess sentiment isn’t really too bearish. Yet, can you blame investors for being less bearish since it is all but certain that some central bank will be intervening on the slightest drop in the equity markets. As least that is what investors seem to believe. Despite investors’ certainty in a certain outcome, the lack of consensus in the sentiment data would suggest that the whatever bounce emanates it should not be very sustainable. Corporate insiders have been net sellers, and the Rydex data is more consistent with a market top than a market bottom. As I have argued there is no consensus.





Two Stocks Bucking the Selling: $AUXL and $CYBX

Courtesy of Declan Fallon

My latest Motley Fool post on Auxilium Pharmaceuticals ($AUXL) and Cyberonics ($CYBX) is available here

Other stocks of interest covered in previous articles: $RAI, $TFM, $P, $DSW, $PPC$DRI, $GHDX$GMRN, $ELRC, $MGRC$MELI$AKAM, $NTES$GOLD, $PAAS$ADP, $PAYX, $TXN$CHK, $TSO$POT, $FCX, $APL

I own shares in $APL and $FCX.






And Now… Let’s Play Chicken

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

From Mark Grant, author of Out of the Box

And Now – Let’s Play Chicken

Let me outline for you the scrub matches. The first is that the apparent winner of the Greek elections, the New Democracy Party, will try to form a colalition with the PASOK Party and this is what everyone is not betting on. The problem is that the PASOK Party has lobbed a grenade into the coalition discussion, announced by Katerina Diamantopoulou that Pasok will not join into a coalition government with the New Democracy Party unless Syriza also joins the coalition. Syriza stated moments ago it would not do this. The question then comes whether ND can form a government (150+ seats) with any of the other remaining parties including neo-nazi New Dawn or the communists. The answer is most likely not,so Greece again, for the moment, is nowhere. Then the New Democracy Party also campaigned on re-doing the terms of the EU bailout which Germany said earlier today would not be happening. The markets may well rally on the headlines but reality will set in soon enough I would think. At the moment, which could change in a Greek heartbeat or the smashing of a plate, Greece is in limbo once again and I would not be betting too heavily or cheering in the marketplacethat everything is resolved; it is clearly not.

Then the next game of chicken is not only will Germany/the EU back up from their position but will they give Greece more money because if they don’t the country and the banks more money they both will default. So it is no government in Greece for the moment, playing chicken over the bailout terms, playing chicken over new money for Greece as their economy continues to  deteriorate and as they amount they owe now, much less any new money, cannot be paid back under any scenario that anyone can concoct. The headlines may well drive the markets’ reaction briefly but “watch out below” will be what takes hold as it must because that assumption is based upon facts and not hype.





As Syriza Concedes Defeat, EURUSD Forgets To Soar – Is A Spanish “Bail Out” Market Response In The Works?

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

In a perilous replay of the Spanish bank “bailout”, the proxy for bailout sentiment, the EURUSD pair, was up 61 pips to just under 1.2700… and that’s it. Naturally, if the world suddenly thought Europe was “fixed”, Spain notwithstanding, one would imagine the reaction by the FX market would be just a little more invigorated than merely confirming that what is playing out (namely the lack of a definitive Greek government) has already been priced in. And yet here we are…

As the WSJ reports:

“The head of Greece’s radical left Syriza party conceded defeat Sunday
after closely fought national elections that were seen by many as a de
facto referendum on the country’s future in the euro zone. With more than half of the vote counted, the conservative New
Democracy party--which supports the European-led bailout needed to keep
Greece in the euro zone--was leading with 30.3% of the vote against
26.31% for the antiausterity Syriza party. Speaking in a nationally televised statement, Syriza leader Alexis
Tsipras said he had called his rival--New Democracy party chief Antonis
Samaras--to congratulate him on his victory. A little while ago, I called Mr. Samaras and I congratulated him. He
now has the ability to form a government,” Mr. Tsipras said”

However,

“In his remarks, Mr. Tsipras said his party would continue to “be present in developments in the position of the honorable opposition,” implicitly ruling out any cooperation with New Democracy in a cross-party coalition.”

  In other words, anyone hoping that Greece will promptly form a pro-bailout government will likely be disappointed, especially if Pasok was not merely posturing and indeed demands Syriza, which said it will do no such thing, form a coalition government. On the other hand, there is nothing quite like have a coalition government between the two parties that brought Greece to its knees in the first place, to fix the country… Somewhat like when all the central banks ganged up and fixed the world last time around in November.

To Germany, the vote, has one meaning: that Germany won the game of chicken. From Reuters:

The German


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No One’s Asking the REAL Question That Matters for the EU…

Courtesy of ZeroHedge. View original post here.

Submitted by Phoenix Capital Research.

 

The following is an excerpt from my most recent issue of Private Wealth Advisory.

 

While everyone else is focusing on the Greek elections, the REAL issues pertaining to the EU (namely where the funding for Spain’s bailout as well as future bailouts will come from) continues to be ignored.

 

Indeed, no one seems to be asking THE key question regarding the EU: Just WHERE is the money for this bailout going to come from?

 

There are essentially four key options for this: the IMF, the EFSF, the ECB, and the ESM (the Fed won’t do it).

 

Unfortunately, NONE of them are viable options.

 

The IMF?

 

As noted earlier, the answer here is a resounding “NO!” as Obama won’t propose a European bailout during an election year (hence his desperate pleas to Angela Merkel to hold the EU together for the next six months).

 

The EFSF?

 

Germany won’t allow the EFSF to fund the Spanish bailout as it would increase Germany’s exposure to the Spanish fall-out. The public outrage regarding the EU is growing in Germany by the day (55% of Germans believe they would have been better off keeping the Deutschmark while another 78% believe the worst of the Euro is ahead)

 

The ECB?

 

The ECB has completely avoided any notion that it would fund the bailout. Indeed, at the ECB’s most recent press conference, ECB head Mario Draghi stated,

 

Draghi Says ECB is Ready to Act as Growth Outlook Worsens

 

“We monitor all developments closely and we stand ready to act,” Draghi told reporters in Frankfurt after the ECB left its benchmark rate at 1 percent. Downside risks to the economic outlook have increased and “a few” of the ECB’s Governing Council members called for rate cut at today’s meeting, he said…

 

“I don’t think it would be right for the ECB to fill other institutions’ lack of action,” he said.

 

http://www.businessweek.com/news/2012-06-06/draghi-says-ecb-is-ready-to-act-as-growth-outlook-worsens

 

An additional item I want to note regarding the ECB… it hasn’t actually bought any EU bonds in 13 weeks, signaling that while it may act in terms of providing liquidity to banks… it has ceased actually monetizing EU sovereign bonds (another indication that Germany is the REAL…
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Weekly Market Commentary: Buying in the Face of Greek Elections

Courtesy of Declan Fallon

With Greek Elections too close to call it was surprising to see markets close on a high. Market breadth showed also demonstrated strong gains in support of the market.

The Nasdaq Summation Index firmed up a swing low with stochastics deeply oversold and the MACD histogram climbing off a low.

It was a similar story for the NYSE Summation Index

The Bullish Percents were not so frothy, but there were still gains to be had.  The biggest strike against them is the neutral mid-position of stochastics.

The Nasdaq finished the week at 2,872 which is close enough to the swing high from early 2011. Will this mark a right-hand-shoulder of a larger bearish pattern? Bulls hold the advantage and a higher weekly close (Friday) would negate this.

The S&P also sits at an important juncture.  It closed on former channel support – turned resistance.  It has yet to challenge the early 2011 swing high, so channel resistance is the work-for-the-week.

The Russell 2000 had a quiet week.  It’s some way from the 2011 swing high and channel support – turned resistance and has suffered in 2012 after a bright 2011. Probably won’t find many takers this week.

While there are a number of potential bearish technical turning points to consider, plus Greek elections to spoil things, there should be enough carryover form last week to see this nascent rally continue.  Bulls certainly not lacking a wall-of-worry to climb!

—--

Follow Me on Twitter


Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com. I offer a range of stock trading


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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

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

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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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