Archive for 2012

Gauging Investor Sentiment with Twitter: New Update

Courtesy of Doug Short.

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


The Downside Hedge Twitter Sentiment Indicator strengthened early last week while the market was waiting for news out of Europe and the US Federal Reserve. We found it encouraging that it held up even as the S&P 500 Index moved sideways. When SPX broke through minor resistance at 1440 it was accompanied by a sharp move up in our smoothed sentiment indicator. This move confirmed the rally as it also broke the trend of lower highs that has been in existence since the middle of June. In addition, smoothed sentiment finally registered a reading above zero as a multitude of traders tweeted that they were giving up on their short positions or committing new money as a result of the FED actions.

A short covering rally pushed the SPX to our next minor Twitter resistance level of 1475. After which, the market promptly gave up 10 points as longs tweeted about taking profit. It appears that the short covering rally that we mentioned last week is complete. We thought it might carry the market to 1500 since there were so many tweets about being short against 1440 and only isolated mentions of 1475 as a target. That assumption appears to be wrong.

This coming week we’ll be watching to see if SPX can consolidate above minor support of 1440 with continued strength in our daily sentiment indicator. We want to see people tweeting about any correction as a healthy event. If our indicator holds up we believe we should see the market move to the next major Twitter resistance level of 1500. Above that people are tweeting about 1570 and 1600.

Below the market most of the tweets call for SPX 1400 and 1422. There are tweets on a short term basis at 1440 and a few scattered calls for 1375, then a few outliers at 1167. Based on the volume of tweets we consider 1400 as major support with 1440 and 1422 as minor support levels.


For background information on this indicator, see Gauging Investor Sentiment with Twitter.

Blair Jensen at Downside Hedge tracks Twitter sentiment and provides hedging strategies for individual investors.

 

 

 

 





Things That Make You Go Hmmm – Such As “The Hitchcock Zoom” Vs Reality

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

From Grant Williams, author of Things That Make You Go Hmmm,

Ken Burns and Alfred Hitchcock are movie makers. ‘The Ken Burns Effect’ – panning and zooming to focus attention on a certain isolated piece of the full picture; and the ‘Hitchcock Zoom’ – a ‘shocking’ dramatic change in perspective; keep the viewer occupied and entertained by material that would otherwise look a little staid and to ensure that attention is paid to the precise piece of the picture that the director wishes to be the center of focus. As Grant Williams ruminates on the Draghi Scheme (The Dreme), the devices of Burns and Hitchcock came to mind as central bankers attempt to either unsettle the viewers or make them focus on a specific part of the whole, rather than the big picture.

For the last eighteen months, we, the viewers, have been manipulated by a seemingly never-ending procession of Eurocrats, bureaucrats, technocrats and who-said-thats to look at a very precise part of the economic picture rather than be allowed to step back and try to take in the wider situation.

Accordingly, we thought this week we would take a step back, ignore where the Ken Burns Effect of Draghi’s words were pointing our attention, turn a blind eye to the conflicting rhetoric emanating from the various actors in the Theater of the Absurd and concentrate on the big picture – to try and make sense of the broader reality in Greece, Spain, TARGET2, and The Dreme. It damned near gave us vertigo.

 

THE KEN BURNS EFFECT: The Dr’aghi Sch‘eme

The use of the Ken Burns Effect this past week by Mario Draghi was worthy of an Academy Award nomination for cinematography.

With a carefully orchestrated leak (via his old pals at Goldman Sachs) of just about every detail of his upcoming plan, Draghi successfully managed to focus the attention of the markets on one specific piece of his cleverly-crafted scheme (hereinafter referred to as the ‘Dreme’. Hey, Willem, this is easy!). Granted, he had help in that the piece he wanted focus to be on was exactly the piece everybody had been waiting (and, frankly, hoping desperately) to hear.

One little word; unlimited.

By using the ‘u-word’, Draghi ensured that the minor details of his proposal to
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Guest Post: Matthew Stein Asks “How Prepared Are You?”

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Adam Taggart of Peak Prosperity,

During the height of the ‘Goldilocks economy’ of the mid-1990s, Mat Stein wrote When Technology Fails: A Manual for Self-Reliance, Sustainability, and Surviving the Long Emergency [9], a master compendium of do-it-yourself preparation skills.

Fast-forward to today’s Great Recession, drought-stricken, $100+ oil, post-Katrina, post-Fukushima world — many are realizing the prudence of taking basic precautionary steps to reduce their vulnerability to whatever the future may bring. Whether you’re concerned about the fallout from a breakdown of today’s weakened global economy, or simply want to be better able to deal with the aftermath of a natural disaster if you live in an earthquake/hurricane/flood/wildfire/tornado-prone part of the world, the personal resiliency measures Mat recommends make sense for almost everyone to consider.

In this interview, Mat begins with his universal advice for developing basic preparedness — a 72-hour kit covering the basics needs for living, an emergency plan for your family, lining up local and out-of-town contacts, etc. — and discusses specifics on what gear to procure and steps to take in unexpected emergencies. For more protracted periods without access to central services, many more situations are covered in his books [10] and at his website [11].

It’s important to note that Mat isn’t a doomer bent on fanning fears of a zombie apocalypse (though those concerned about social collapse will find much utility in his work). Like Chris, he believes that our current fossil fuel-driven, hyper-consumptive, and over-leveraged way of life is not sustainable. So before the unsustainable, by definition, stops – it’s best to invest now in developing the skills and habits that will serve us in this new future;  one sure to place a higher premium on self-reliance.

On the Rule of Threes

The Rule of Threes give you an indication of, in a crisis time, where your energies really should lie.

The Rule of Threes basically says:

  • If you’ve got 3 seconds without blood flow, meaning a heart attack or critical injury, then without blood flow to the brain in 3 seconds you pass out.
  • If you have 3 minutes without oxygen flow — either you aren’t breathing or you don’t have access to oxygen — you’re out.
  • If you have


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Is The Fed Losing Faith… In Itself?

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

The cracks in the Fed’s narcissism started to show at Jackson Hole, where Bernanke’s speech did nothing for the market; and as the FT points out, the biggest worry on display was whether these bureaucrats, sitting at the heart of every mature economy, still have the power to influence demand. Lurking behind many debates was this question: if central bank policies are so omnipotent effective, why is the global economy not growing faster? Everyone’s favorite honest-dwarf Fed Governor, James Bullard, summarized perfectly:

“I am a little – maybe more than a little bit – worried about the future of central banking. We’ve constantly felt that there would be light at the end of the tunnel and there’d be an opportunity to normalize but it’s not really happening so far.”

 

What I’m worried about is this creeping politicization.”

With monetary financing of governments on the increase (unconditionally by the Fed and conditionally by the ECB), it is clear that more radical options are increasingly mainstream as the textbook is not providing the answers.

 

Via The FT: Not So Different This Time

 

There are a few possible reasons why repeated rounds of central bank communication and quantitative easing, as the policy of buying long-dated assets in an effort to drive down long-term interest rates is known, have not brought about a strong recovery.

 

One is that something structural has changed to hold back growth. Speaking from the floor in Wyoming, Donald Kohn, another former Fed vice-chair now at the Brookings Institution, raised the possibility of “something deeper going on”, perhaps related to savings behaviour or the changed distribution of income between labour and capital.

 

Another is that the tools work, even if current conditions blunt their effect. If there are new headwinds, then the answer is to use them more aggressively. That is the mainstream view among central bankers.

 

“A balanced reading of the evidence supports the conclusion that central bank securities purchases have provided meaningful support to the economic recovery while mitigating deflationary risks,” said Ben Bernanke, the Fed chairman, in his remarks at Jackson Hole.

 

A third possibility is perhaps the most alarming for central


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Japan’s Revised GDP Growth Cut in Half; Current Account Surplus Down 41% to $8 Billion; Mathematical Impossibilities

Courtesy of Mish.

Revised estimates of Japan’s growth have been cut in half, from 1.4% to .7%. More importantly, Japan has a small but shrinking current account surplus (in spite of running a trade deficit for some time).

Once the current account surplus vanishes, and I believe it will, Japan will become somewhat dependent on foreigners to handle its budget deficit. Good luck with that at 0% interest rates.

Please consider Japan Halves Growth Estimate for Past Quarter to Annual 0.7%.

Japan’s economy expanded in the second quarter at half the pace the government initially estimated, underscoring the risk of a contraction as Europe’s debt crisis caps exports.

Gross domestic product grew an annualized 0.7 percent in the three months through June, the Cabinet Office said in Tokyo today, less than a preliminary calculation of 1.4 percent. The median forecast of 26 economists surveyed by Bloomberg News was for a revised 1 percent gain. The current-account surplus fell 41 percent from a year earlier to 625.4 billion yen ($8 billion) in July, a finance ministry report showed.

Gridlock in parliament may limit fiscal stimulus just as Japan’s expansion is restrained by weakness in global demand, strength in the yen, and the winding down of car-purchase subsidies. A slowdown in Asia may further curtail exports and add to pressure for monetary easing after Chinese data yesterday suggested the region’s biggest economy is losing steam.

Case For Stimulus?

I am amused by a Reuters report that says Japan Q2 GDP revised down, builds case for stimulus

In a sign of slackening foreign demand for Japanese goods caused by the euro zone debt crisis and China’s slowdown, the July current account surplus came 40.6 percent below year-ago levels, reflecting a drop in exports.

However, due to a slower rise in imports, the fall in the surplus to 625.4 billion yen ($8 billion) was less pronounced than the forecast 56.8 percent drop to 455.0 billion.

Should the economy require more fiscal stimulus, the policy response could be delayed as policy making has ground to a halt due to a stand-off between the ruling and opposition parties.

Mathematical Impossibilities

Notice the absurd reliance on stimulus, in spite of a shocking amount of debt, exceeding 200% of GDP.

Moreover, the idea of fiscal stimulus is


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On America’s Middle-Class Divide

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

With both political parties having concluded their respective rah-rah-fests and each vehemntly proclaiming “The Other Side” as failing miserably; it appears, as Raghuram Rajan points out in his latest article that while America’s presidential election campaign is superficially a debate about health care and taxes; it is much more fundamentally about democracy and/or free enterprise. As he notes, democracy implies regarding individuals as equal and treating them as such, with every adult getting an equal vote, whereas free enterprise empowers individuals based on how much economic value they create and how much property they own.

What prevents the median voter in a democracy from voting to dispossess the rich and successful? And why do the latter not erode the political power of the former?

The answer relies upon the ‘dream’ (American or otherwise) of a level playing field and hard-work paying off; once that middle-class hope begins to fade then the self-reinforcing benefits of democracy and free-enterprise will become self-destructive (not helped by the current parties’ actions to enrage the middle-class ‘working rich’ against those losing faith).

The United States needs to restore the possibility of achieving the American Dream for its middle class, even while it reaffirms the historically light regulation and relatively low tax burden that have allowed enterprise to flourish.

The Heart of the US Election (originally posted by Raghuram Rajun at Project Syndicate)

What prevents the median voter in a democracy from voting to dispossess the rich and successful? And why do the latter not erode the political power of the former?

Echoes of such a tension are playing out as President Barack Obama tries to tap into middle-class anger, while former Massachusetts governor Mitt Romney appeals to disgruntled businesspeople.

 

One reason that the median voter rationally agrees to protect the property of the rich may be that she sees the rich as more efficient managers of that property. So, to the extent that the rich are self-made, and have come out winners in a fair, competitive, and transparent market, society may be better off allowing them to own and manage their wealth, while getting a reasonable share as taxes.

 

The more, however, that the rich


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So Much For The Benefits Of College In America’s “New Normal”?

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Continuing with the theme of the secular shift in the labor pool (not cyclical, as the Fed still mistakenly believes: it will take it at least one more year to understand it has been wrong about this aspect of the New Normal economy too, just as it was wrong for decades about the Flow vs Stock debate), it is not only men who are fresh out of luck. As a reminder, we observed earlier that the labor force participation rate for men has just dropped to an all time low. It turns out there is another class of workers whose participation rate is at the lowest in series history: that of “25 year olds with a Bachelor’s degree and higher“, i.e. college grads. At 75.5%, it is the lowest since this data has been kept by the BLS. But not all is abysmal in America’s labor force. While the share of workers with a college degree has plunged to all time lows, a bright spot can be found when observing the labor force participation rate of those who never bothered with college, and for whom high school was their last known degree-granting institution. At 59.9%, the participation rate is well of its 2012 lows of 59.0% and steadily rising, in fact, to borrow a term from the housing bulls, it may well have “bottomed”. Now there is some truly great news for the future of America’s highly educated workforce.

None of the above, however, matters to hordes of young, impressionable wannabe college grads for whom college is the only hope out there, no matter the cost. Sadly, the cost is rising exponentially, and as we showed recently, total Federally-funded student loan debt outstanding is now at all time highs.

Luckily, the cost of the debt is at record lows. Sadly, the principal will still need repayment, as cohort after cohort of unemployed students will soon find out, and also find out that there is no discharge of student debt in bankruptcy: it is, indeed, the proverbial gift that keeps on taking.





Greek Neo-Nazi Party Surges To Third In Polls, As Anti-Bailout Syriza Back On Top

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

While there is still some debate whether the proper alternative nomenclature of the Greek ultranationalist party Golden Dawn is “neo-nazi“, there is no debate that the party, which is a manifestation of every broken Greek hope and dream, after posting a shocking result in the recent Greek parliamentary election which saw it coming in fifth and entering parliament after, continues to soar in popularity and is now the third most popular party in Greece with 12% of the vote. Above it are only two other parties: the conservative New Democracy which won the June elections with 29.6% of the vote, which is now down to 28%, and on top, in an ominous development for EUR-bulls, is the anti-bailout and anti-memorandum leftist coalition Syriza, which has threatened to end the bailout, and effectively to take Greece out of the Eurozone, setting off the much dreaded dominoes.

From the WSJ:

Greece’s anti-bailout leftist Syriza party would win if elections were held today, while ultranationalists Golden Dawn would become the third-largest party in parliament, a poll showed Friday.

 

According to a survey prepared by VPRC polling agency and published in Ellada Avrio newspaper, the opposition Syriza party would garner 30% of the vote, while conservatives New Democracy--who lead the coalition government--got 28% of the support.

 

New Democracy is the major partner in Greece’s coalition government together with two center-left junior partners, the Socialist Pasok and smaller Democratic Left parties. The conservative party won Greece’s mid-June elections after getting 29.6% of the ballots leading the radical-left Syriza party by three percentage points.

 

The ultraright, nationalist Golden Dawn, which was elected to the parliament for the first time during the last elections, would receive 12% of ballots and move up from being the fifth-largest party.

 

Backing for the two junior-coalition partners dropped further. Socialists Pasok are supported by 7.5% of respondents, among the lowest levels seen by the party since being established in 1974. Greece’s small Democratic Left party saw its popularity drop to 4%, versus 6.3% at the latest national polls.

 

The survey conducted Sep. 4-5 with 1,000 respondents, found that 76% of Greeks believe the country is heading in the wrong direction, while 86% aren’t satisfied with the coalition government’s performance.

And while…
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54% Of Germans Hope Krimson Kardinals Just Say “Nein” To ESM, As Greece Is Once Again On The Edge

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

There are two key events in the coming week: first, on September 12, is the decision of the German Constitutional Court, aka the Krimson Kardinals of Karlsruhe, whether the ESM, or the ECB’s primary market bond monetization program, is legal. A no vote would severely cripple the European “make it up as you go along” bailout and leave Europe’s peripheral nations with little recourse, and Spain with even less cash as it faces a wall of bond maturities in both October and 2013. Then, on Thursday, the Federal Reserve will most likely underwhelm the market which is expecting a new substantial round of outright Asset Purchases, aka NEW QE, which however as we explained will almost certainly not occur due to various reason first described here last Friday. A third, and perhaps far more important event, will be the Dutch parliamentary election also on September 12, but more on that in a further post. For now, looking at Germany, and the piecemeal attempt to put back together the European house of monetary cards, we find that in Germany – the country tasked with funding the European implosion – the population has decided, by a 2 to 1 margin – that the constitutional court should just say “nein” to the ESM, and let Europe go on its merry way without German backing (because as a reminder, the primary source of ESM funding is Germany). From Spiegel: “A survey shows that the majority of Germans hope that the judges in Karlsruhe reject the permanent rescue fund ESM. 54% want a reversal of the Bundestag decisions on the ESM and Fiscal Pact, which should be legally halted. Only 25% believe that the court should dismiss the urgent appeals of the Euro-skeptics.”

As if we didn’t already know, the majority of Germans are less than enthused about funding their insolvent neighbors:

According to the German population, there is a skeptical mood against the EU. According to the survey 53 percent are against the EU to transfer more powers. Only 27 percent are in favor. 42 percent would be an exclusion of Greece from the euro zone welcome. 30 percent would find it not good. 56 percent are worried before a breakup of the euro zone as a whole.


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Zero Hedge

Americans' Economic Hope Has Collapsed

Courtesy of ZeroHedge. View original post here.

Which came first, the confidence or the stock market rally?

One thing is for sure, the crash in stocks in December has crushed the hope of Americans that their economic future is going to be better under President Trump.

Overall confidence dipped to 58.1 - a 4-month low, but, U.S. consumers this month were the most downbeat on the economy since November 2016, a third straight drop after expectations reached a 16-year high just three months earlier, as the partial government shutdown wears on toward a fourth week.

...



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Kimble Charting Solutions

Triple Breakout Test In Play For S&P 500!

Courtesy of Chris Kimble.

Is the rally of late about to run out of steam or is a major breakout about to take place in the S&P 500? What happens at current prices should go a long way in determining this question.

This chart looks at the equal weight S&P 500 ETF (RSP) on a daily basis over the past 15-months.

The rally from the lows on Christmas Eve has RSP testing the top of a newly formed falling channel while testing the underneath side of the 2018 trading range and its falling 50-day moving average at (1).

At this time RPS is facing a triple resistance test. Wil...



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Phil's Favorites

Brexit deal flops, Theresa May survives -- so what happens now?

 

Brexit deal flops, Theresa May survives -- so what happens now?

Courtesy of Victoria Honeyman, University of Leeds

As the clock ticks down to March 29 2019, all of the political manoeuvring, negotiating, arguing and fighting is coming to a peak. In the two and a half years since the 2016 EU referendum, views on both sides have hardened and agreement still seems as far away as it was the day after the referendum.

With Theresa May’s withdrawal agreement disliked by all sides, and voted down by an unprecedented majority in the House of Commons, everyone is wondering what can and should be done next?

...



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Digital Currencies

Crypto-Bubble: Will Bitcoin Bottom In February Or Has It Already?

Courtesy of Michelle Jones via ValueWalk.com

The new year has been relatively good for the price of bitcoin after a spectacular collapse of the cryptocurrency bubble in 2018. It’s up notably since the middle of December and traded around the psychological level of $4,000... so is this a sign that the crypto market is about to recover?

Of course, it depends on who you ask, but one analyst discovered a pattern which might point to a bottom next month.

A year after the cryptocurrency bubble popped

CCN...



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ValueWalk

D.E. Shaw Investment Calls For Leadership Change At EQT

By ActivistInsight. Originally published at ValueWalk.

Elliott Management has offered to acquire QEP Resources for approximately $2.1 billion, contending the oil and gas explorer’s turnaround efforts have done little to lift the company’s share price. The company responded and said that a thorough review of the proposition is imperative in order to properly act in the best interests of shareholders, “taking into account the company’s other alternatives and current market conditions.” The news came only a month after Travelport Worldwide agreed to sell itself to Siris Capital Group and Elliott’s private equity arm Evergreen Coast Capital for $4.4 billion in cash and two months after Athenahealth was bought by Veritas and Evergreen for $5.7 bi...



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Insider Scoop

UBS Says Disney's Streaming Ambition Gives It A 'New Hope'

Courtesy of Benzinga.

Related DIS Despite Some Risks, Analysts Still Expecting Double Digit Growth From Communications Services In Q4 ...

http://www.insidercow.com/ more from Insider

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.

Some other great content in this free eBook includes:

 

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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