Archive for 2012

Swing trading portfolio – week of November 19th, 2012

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

Optrader 

Swing trading virtual portfolio

 

One trade virtual portfolio

 





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 for the S&P 500 Index (SPX) showed a strong reading of +.22 last Monday. This was near a turning point in price. As we’ve noted in previous updates, extreme readings in the daily indicator near market turning points often act as an initiation thrust (in this case pointing to higher prices). The rest of the week brought those higher prices. However, sentiment started to diverge. Tuesday and Wednesday printed negative readings in daily sentiment as traders tweeted about consolidating Monday’s strong up move. Then Friday’s extremely strong price action generated a lot of tweets about the market running too fast on low volume. This has created a negative divergence in the short term, which warns that the market may pause in the next few days.

Smoothed sentiment has broken clearly above, and held, the zero line. This signals that there is more room for the market to rally over the intermediate term. Continued readings above zero will keep a positive bias in place. We’ll be watching for a negative divergence, a close below zero, or a break of the recent trend line on smoothed sentiment for clues that the rally has run its course.

Our Twitter Support and Resistance levels generally followed price this week suggesting that traders were chasing the market rather than setting targets for their trades. There were only scattered tweets above and below the market, which suggests that market participants are uncertain about future price movement. Even so, the tweets did have a slight bias to the upside, targeting resistance at 1435 and 1475. Support below is at 1400 and 1380. However, these targets were calculated mainly from prior resistance rather than a large volume of tweets targeting them as lows. We’ll want to see more tweets at 1400 and 1380 to have confidence that those levels are major support.


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.

 

 

 

 





On Surviving The Monetary Meltdown

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Via Detlev Schlichter of DetlevSchlichter.com,

Let us start by looking at the economy from 10,000 feet above: After 40 years of boozing on easy money and feasting on fantastical asset price inflations, the global monetary system is approaching catharsis, its arteries clogged and instant cardiac arrest a persistent threat. Most financial assets are expensive, and many appear to be little more than securitized promises with low probability of ever delivering payment in full. Around the globe, from Japan to the US, a policy of never-ending monetary stimulus consisting of zero interest rates and recurring rounds of ‘quantitative easing’ has been established aimed at numbing the market’s growing urge to liquidate. Via the printing press, the central banks, the lenders-of last resort, prop up banks and financial assets and simultaneously fatten the state, the borrower of last resort, which, despite excited editorials against the savage policy of ‘austerity,’ keeps going further into debt almost everywhere.

‘Muddling through’ is the name of the game today but in the end authorities will have two choices: stop printing money and allow the market to cleanse the system of its dislocations. This would involve defaults (including those of sovereigns) and some pretty nasty asset price corrections. Or, keep printing money and risk complete currency collapse. I think they should go for option one but I fear they will go for option two.

In this environment, how can people protect themselves and their property?

Disclaimer

Before I start sharing some of my own personal thoughts on this topic with you I should repeat my usual disclaimer: I provide economic analysis and opinion, food for thought. But I do not intend to give investment advice and certainly not any specific trade ideas. I provide a worldview, and an unconventional one at that. You alone remain responsible for your actions, and whatever you do, you do it at your own risk.

My three favourite assets

My three favourite assets are, in no particular order, gold, gold and gold. After that, there may be silver, and after a long gap of nothing there could be – if one really stretches the imagination – certain equities or commercial real estate.

Why gold?

We are,
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Key Global Event Risks For The Next Five Years (The Known Unknowns)

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

The world is awash with liquidity and yet, despite (or perhaps because of) this, the greatest potential impacts lie from downside risks. The combination of macro growth risks, major economy elections (2013 looks busy), and the plethora of central bank policy meetings over the next year (heavy December) leave a path ahead of forlorn hope – or exuberant anticipation – for many. Summary below…

Growth risks…

 

Election Events…

 

and the next 12 months of hope…

 

Source: SocGen





The Three “Financial Structure” Paradigms Of Modern Finance

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

In a prior post, we discussed the implications of the global shadow banking system having risen to the unprecedented level of roughly 100% of global GDP. By now it should be quite obvious to even the most jaded optimists, that the reason why traditional leverage conduits are no longer applicable (and the only real source of bank credit creation is the Fed via the hopeless blocked up excess reserve pathway), and why credit money (and hence in a Keynesian world “growth“) has to come via deposit-free, unregulated “shadow” venues, is that there are no longer enough good money good assets for conventional secured credit creation, and viable levered projected cash flows for conventional unsecured credit creation. Yet not the entire world has gone all in on this gambit, which together with the Fed’s money printing, is truly the last bastion of “money’ creation. In fact, as the FRB demonstrated, there are three distinct paradigms when it comes to source of credit creation or as it puts it, “financial structure“: the US “massive shadow banking system” way, the German “conventional bank deposits funds loan creation” way, and the Saudi Arabian, and soon everyone else, “central planning to the max” way. In a nutshell, these are the three credit system structure extremes, with everything else currently inbetween. These can be visualized as follows:

Follows the FRB’s commentary on these three financial system “paradigms”

Three main groups of jurisdictions emerge when analysing the structure of financial systems based on the share of banks, insurance companies and pension funds, other NBFIs/OFIs, public financial institutions and central banks in the total (see Annex 2 and Exhibit 3-1):

  • A first group includes advanced economies characterised by a dominant share of banks combined with a limited share of OFIs that does not exceed 20%. Jurisdictions such as Australia, Canada, France, Germany, Japan, Spain fall in this category.
  • A second group includes economies where the share of OFIs is above 20% of the total financial system and relatively similar, or higher, to that of banks. For instance, the Netherlands, the UK, the US, fall in this category.
  • A third group includes emerging market and developing economies where the share of public financial institutions or the central bank is significant, often on account


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Chris Christie Provides Perfect Setup for Saturday Night Live

Courtesy of Mish.

Those looking for late Sunday evening humor can find in in this short YouTube clip of New Jersey governor Chris Christie.

Link if video does not play: Chris Christie on Twinkies
At a recent news conference, Christie was asked a question about Twinkies. He responded …

Really, seriously, you’re not asking me about Hostess Twinkies are ya? What’s the next question? I’m on Saturday Night Live enough. You think you’re getting me behind this microphone having me talk about Twinkies? This is a setup man, I know it. You people are the worst. This is a setup. I am not answering questions on Twinkies. No, no, no, no, no, no. It’s bad that I even said the work Twinkie from behind this microphone. You are not getting me to do that, no way.

That is so obvious, it almost appears as if Christie was trying to make the opening skit of Saturday Night Live.

In case you are not familiar with the Twinkies story, please consider Hostess to Liquidate if Bakers’ Strike Continues Through Thursday; End of Twinkies Hours Away?

The bottom line is the union would not give into demands and  the company filed a motion last Friday to liquidate. Shutting down the company will mean the loss of 18,500 jobs (less any jobs picked up by buyers of brands Twinkies, Ding-Dongs, Wonder Bread, Ho-Ho’s etc.)

There is plenty of blame to go around, including untenable wages and benefits, leveraged debt, untenable management salaries etc.

However, the enabling factor behind the debt is loose monetary policy by the Fed coupled with fractional reserve lending. Factor in unions and corrupt management and there is no way  the company could make it without huge concessions from the union.

Still, it is difficult to have much sympathy for those who vote to have no job in these trying times.

The union will likely see pension benefits slashed by 50% or more when handed over to the Pension Benefit Guarantee Corporation….



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Global Shadow Banking System Rises To $67 Trillion, Just Shy Of 100% Of Global GDP

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Earlier today, the Financial Stability Board (FSB), one of the few transnational financial “supervisors” which is about as relevant in the grand scheme of things as the BIS, whose Basel III capitalization requirements will never be adopted for the simple reason that banks can not afford, now or ever, to delever and dispose of assets to the degree required for them to regain “stability” (nearly $4 trillion in Europe alone as we explained months ago), issued a report on Shadow Banking. The report is about 3 years late (Zero Hedge has been following this topic since 2010), and is largely meaningless, coming to the same conclusion as all other historical regulatory observations into shadow banking have done in the recent past, namely that it is too big, too unwieldy, and too risky, but that little if anything can be done about it.

Specifically, the FSB finds that the size of the US shadow banking system is estimated to amount to $23 trillion (higher than our internal estimate of about $15 trillion due to the inclusion of various equity-linked products such as ETFs, which hardly fit the narrow definition of a “bank” with its three compulsory transformation vectors), is the largest in the world, followed by the Euro area with a $22 trillion shadow bank system (or 111% of total Euro GDP in 2011, down from 128% at its peak in 2007), and the UK in third, with $9 trillion. Combined total shadow banking, not to be confused with derivatives, which at least from a theoretical level can be said to offset each other (good luck with that when there is even one counterparty failure), is now $67 trillion, $6 trillion higher than previously thought, and virtually the same as global GDP of $70 trillion at the end of 2011.

Of note is that while the US shadow banking system has been shrinking (something our readers are aware of, and a fact which in our opinion implies there is nearly $4 trillion more in Fed monetization still to come, as Bernanke has no choice but to offset the credit destruction within shadow conduits, which in turn are deleveraging to the tune of nearly $150 billion per quarter), that of Europe has been increasing.

The result:


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Weighing the Week Ahead: Can You Find Opportunity this Thanksgiving?

Courtesy of Doug Short.

We have a very interesting week ahead. Despite the gravity of the issues, not much will be happening. Congress, after convening for a few days, will be back on vacation recess. There is not much news coming on the economic front. Equity markets will be closed on Thursday and open only for the morning on Friday.

In many shops, the “A” team will be off all week, so initiating new positions will be limited.

Alert: The prices and trades still count. If you can find a bargain, you get it.

The non-stop fiscal cliff coverage remains intense. There is a lot of buzz right now about “protecting your portfolio.” This is amazing, since the underlying framework of these issues has been known for at least 1 1/2 years, and widely publicized (at this site and elsewhere) for months. By definition, anyone who is only now getting interested does not understand the fundamental issues.

For the average investor there is danger in these messages. Successful traders (like our Felix model) make relatively fast moves, responding to trends and rule-based systems. Unsuccessful traders learn that their system was flawed. None of the systems considers market fundamentals directly, expecting instead that anything relevant is part of the message of the market.

Successful investors do the opposite. They determine the value of a business and then see if they can invest at an attractive price. Think of it this way. Everyone ridicules the “greater fool” theory — buying an overvalued stock because you hope someone else will soon pay an even higher price for it. Selling an undervalued stock is no different. You are no longer investing, but instead guessing that the market will allow you a better future price.

No one explains this better than Warren Buffett, commenting on the “portfolio insurance” method of deciding when to sell:

If you’ve thought that investment advisors were hired to invest, you may be bewildered by this technique. After buying a farm, would a rational owner next order his real estate agent to start selling off pieces of it whenever a neighboring property was sold at a lower price? Or would you sell your house to whatever bidder was available at 9:31 on some morning merely because at 9:30 a similar house sold for less than it


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Adult Conversation About Income Tax Policy

Adult Conversation About Income Tax Policy

By The Banker

With the Fiscal Cliff[1] looming, kids, it’s time for “The Talk.”

By ‘The Talk,’ I mean yank our minds into the grown-up world.  We have been innocent about how money really gets made, and kept, and taxed.  The ‘adults’ know, but they haven’t felt comfortable sharing the real truth.  We didn’t know, and we didn’t think we could talk about it.  It seems embarrassing for some reason.  Almost dirty.  Maybe it’s the way we were brought up.  Nevertheless, now’s the time for ‘The Talk.’

Here it is in a nutshell: The way the ‘grown-ups’ – our elected officials – set tax policy tells us how they value different ways of making money.  They see three different ways to make money, and they clearly favor the first two.

Inherited Money

According to our tax code it turns out the very best way to make money is the old-fashioned way:  Inherit it.

As of this writing, the first $5 million from a deceased individual can pass to you tax free.  Our elected leaders want you to know that the best way to get rich is to be born into a rich family and have the right people die at the right time.[2]

Stated that way, it seems a bit un-American, no?  A bit, well, aristocratic.  Nevertheless, that’s far and away the best way to earn your first $5 million.  Our leaders want you, Richie Rich, to have your first $5 million tax free.[3]  Mwah!

Make money with your money

The second best way to get wealthy, according to the tax code, is to already have a lot of money, and then earn money on your money.

If you already have a lot of money, then a significant proportion, probably a majority of your income, will come from three sources: Tax Free Bonds, long-term capital gains on your investments, or corporate stock dividends.[4]

The best of these investment, tax wise, is Triple Tax Free municipal bonds, which are exempt from local, state and federal income taxes.  You earn just about 0.5% interest[5] these days, but if you’ve got $100 million in triple tax free muni bonds then you’ve got yourself $500,000 a year, tax free!  That pays for quite a few golf outings a year, with money left over for the lobster roll at


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Here Come The ‘Stock Market Vigilantes’

Here Come The 'Stock Market Vigilantes'

Courtesy of Joe Weisenthal at Business Insider

When you hear the word "vigilantes" in financial markets, it's usually referring to "bond vigilantes" the quasi-mythical creatures that drive interest rates up, and force governments and their central banks to either cut spending or tighten monetary policy.

The debate about the existence of vigilantes is tired, but it's a useful term in the sense that some market movements do inspire policy responses.

In Europe, high rates for government borrowing have prompted all kinds of action on the part of official figures.

In the US it's been ages since anyone cared about high interest rates, or saw them as a threat.

But the stock market is a different story, and there's this belief that if the Fiscal Cliff situation got too bad, then the market would tank, and that would force a resolution.

Says BofA's Ethan Harris:

Historically the bond market has been a disciplining force for policymakers. When the Fed was too soft on inflation or the fiscal deficit was out of control, interest rates spiked higher. In our view, this has changed and today the stock market is the disciplining force for Washington. Stocks have generally endorsed Fed policy. We estimate that stock prices rose a cumulative 15% in the past three years in response to Fed announcements or actions. While some investors have misgivings about what the Fed is doing, the overall market likes it. By contrast, the stock market is giving a clear no-confidence vote to fiscal policymakers. This was particularly clear when the TARP bailout plan failed to pass and at the end of the debt ceiling debate.

Today, the stock market “vigilantes” are gathering again. In early September we argued that “there is a high risk of a risk-off trade in the markets after [the Fed meeting on] September 13.” We argued that market focus would shift from Fed and ECB easing to fiscal policy risks. In the event the Fed meeting did mark a turning point in the markets, and with the election over and the fiscal cliff taking center stage, the downward pressure has accelerated. This weakness has occurred despite better news on the economy and an unremarkable earnings season.

It's possible that the latest market selloff is being over-fitted to the Fiscal Cliff negotiations, and that the relationship is weaker than assumed.

For one thing, there really…
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Zero Hedge

Auto Shares Surge As Fiat, Renault Confirm Merger Talks

Courtesy of ZeroHedge. View original post here.

With President Trump in Japan for a state visit and most of Europe headed to the polls to vote in the quinquennial EU Parliamentary elections, there was enough news to keep market watchers occupied during what was supposed to be a quiet holiday weekend in the US. 

But on top of these political headlines, on Saturday afternoon, the news broke that Italian-American carmaker Fiat Chrysler had approached France's Renault with a merger proposal that would leave the shareholders of each carmaker with half of the combined company, in a tie-up that would create the world's third-largest au...



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Phil's Favorites

Trump and the problem with pardons

 

Trump and the problem with pardons

Courtesy of Andrew Bell, Indiana University

As a veteran, I was astonished by the recent news that President Trump may be considering pardons for U.S. military members accused or convicted of war crimes. But as a scholar who studies the U.S. military and combat ethics, I understand even more clearly the harmful long-term impact such pardons can have on the military.

My researc...



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Insider Scoop

Jefferies Sees 60-Percent Upside In Aphria Shares, Says Buy The Dip

Courtesy of Benzinga.

After a red-hot start to 2019, Canadian cannabis producer Aphria Inc (NYSE: APHA) has run out of steam, tumbling more than 31 percent in the past three months.

Despite the recent weakness, one Wall Street analyst said Friday that the stock has 30-percent upside potential. 

The Analyst

Jefferies analyst ...



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Kimble Charting Solutions

DAX (Germany) About To Send A Bearish Message To The S&P 500?

Courtesy of Chris Kimble.

Is the DAX index from Germany about to send a bearish message to stocks in Europe and the States? Sure could!

This chart looks at the DAX over the past 9-years. It’s spent the majority of the past 8-years inside of rising channel (1), creating a series of higher lows and higher highs.

It looks to have created a “Double Top” as it was kissing the underside of the rising channel last year at (2).

After creating the potential double top, the DAX index has continued to create a series of lower highs, while experiencing a bearish divergence with the S...



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Chart School

Brexit Joke - Cant be serious all the time

Courtesy of Read the Ticker.

Alistair Williams comedian nails it, thank god for good humour! Prime Minister May the negotiator. Not!


Alistair Williams Comedian youtube

This is a classic! ha!







Fundamentals are important, and so is market timing, here at readtheticker.com we believe a combination of Gann Angles, ...

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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:

 

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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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