Archive for 2012

Swing trading portfolio – week of November 26th, 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

 





Constitutional Crisis in Spain; Pro-Referendum Parties Win 87 of 135 Seats

Courtesy of Mish.

Spain takes a giant step towards a full-blown constitutional crisis as Catalans overwhelmingly elect candidates promising a break-up vote.

Catalonia has delivered a sweeping mandate to political parties pledging to hold a referendum on independence in elections that place the northern Spanish region on a collision course with Madrid.

In a vote billed as “the most decisive elections in the history of Catalonia” by Artur Mas, the region’s president, pro-referendum parties won 87 of the Catalan parliament’s 135 seats.

Following weeks of intense debate about Catalonia’s future relationship with Spain, turnout was 69.5 per cent, the highest for a Catalan regional election in nearly 30 years.

The vote comes amid pressure from various regions around Europe for more independence, including proposals for a referendum on the issue in Scotland in 2014.

Spain’s central government has said any move to push ahead with a referendum on independence for Catalonia, which has an economy the size of Portugal’s and makes up about a fifth of Spanish output, would be illegal and against the Spanish constitution.

Catalonia has built up a debt pile of €42bn, the largest of all of Spain’s 17 regions, and is currently locked out of international capital markets. Earlier this year the region was forced to request an emergency €5bn credit line from Spain’s central government to avoid defaulting on payments.

Messy Politics

The ruling (Center-Right) Convergència i Unió party which favors a referenced actually lost 12 seats in the election, from 62 to 50. However, it lost those seats to more radical pro-independence groups.

Artur Mas, leader of Convergència promised a referendum but will have to align with even more radical groups to produce one according to CNN.

Artur Mas, president of the region’s parliament, promised a referendum on independence for one of Spain’s most important regions if he won re-election.

But after the election, Mas has a more difficult task because his center-right Convergence and Union coalition lost 12 of its 62 seats, a strong setback for a party that was hoping to gain a simple majority in the 135-seat legislative body.

The Catalan Republican Left party was the big winner in the elections, winning 21 seats, according to the Catalonia elections web site, which reported 98% of the votes had been counted.

The


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On Artificial Interest Rates And The Forfeiture Of Growth For Dividends

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Diapason Commodities’ Sean Corrigan provides an insightful introduction to the critical importance of a market-set rate of interest and central banks’ manipulated effect on the factors of production.

“Fixated with using their illusory ‘wealth effect’ to avoid a full realization of the losses we have all suffered in a boom very much of those same central bankers’ creation – or else cynically trying to achieve the same denial of reality by driving the income-poor into accepting utterly inappropriate levels of financial risk – they are destroying both the integrity and the signalling ability of those same capital markets which are the sine qua non of a free society.”

As Ron Paul also confirms in the clip below “with artificial interest rates, we get an artificial economy driven by mal-investment leading to the inevitable bubbles” and while central banks hope for this ‘created credit/money’ to flow into productive means (Capex), instead it has (in today’s case where QE is no longer working) created an investor-class demand for yield – implicitly driving management to forfeit growth-and-investment for buybacks-and-dividends.

 

Ron Paul’s interview with Laisses Faire outlines the impact an artificial interest rate has on the economy…

and Sean Corrigan of Diapason Commodities provides a more in-depth look at the process by which a manipulated interest rate impacts the factors-of-production (or the risks and rewards of the real business cycle)…

What is not to be overlooked is that the applicable rate of interest is not some abstract entity, utterly variable according to the whim of the banking system, but rather is one of the fundamental ratios prevailing in the vast, interconnected topology of exchange – in this case, between the value put on goods available at once and on those only accessible at some future date…

 

Take the act of deciding upon the launch of a new or expanded line of business. Obviously the entrepreneur will make his best guess as to the stream of revenues he may gather and will set these off against his estimates of what it will cost him to achieve them. Thus it is, of course, that a lowering of the rate of generally accepted rate of interest makes his challenge seem a less


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How to Rendition An Inconvenient Economist

Courtesy of The Automatic Earth.

Science? Or Religion?

I’ve said this before, but just in case: I have very little appreciation and/or patience for the field of economics and its practitioners. Labeling it "the dismal science" does it far too much honor in my view, since it's not a science at all. No more than psychology is, or anthropology, or beer brewing. Nothing that can't stand the falsifiability test Karl Popper left us is a science. Falsifiability is the dividing line between the real thing and a whole wide range of mere pretenders.

That said, if there's one economist today (OK, maybe a few more) who I would be tempted to make an exception for, simply because he's made it his goal to at least approach economics from a solid Popper-like viewpoint, it's Steve Keen and his rigorous math. It's therefore no coincidence that Steve is both a good friend of The Automatic Earth, and controversial.

Since about WWII at the latest, a certain group of economists, think Chicago, have tried their stinking best to best recognized as scientists, an attitude that culminated in the launch of the faux Nobel Prize in 1968. They produce serious looking formulas and graphs up the wazoo, which the media reproduce alongside interviews replete with lofty terminology, and the general public has fallen for the trick: ridiculous though it may be, the field has acquired a scientific aura.

Why did and do they want this? Because trillions of dollars worth of policies based on their ideas gain critical respectability if they can make themselves look credible and in control. So it's no surprise that the entire effort has been carried by the support of virtually unlimited amounts of money from the finance industry, as well as 99% of the ruling political classes.

That's how Milton Friedman and his Chicago School became so prominent. Nothing to do with science, let alone falsifiability. Just money. Credibility for sale. If you're a politician, and you manage to get make people, your voters, believe that there's a scientific underpinning to whatever it is you want to do economically, you got it made. And there are plenty of rich people and institutions willing to finance that fake science, since it serves their purposes.

This is to a large extent


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Welcome to the Currency War, Part 5: The Dollar Gets Serious Competition

Courtesy of John Rubino.

Not so long ago the dollar was the world’s only reserve currency. Everything else was one (or several) steps down in terms of safety and liquidity, and major financial institutions acted accordingly, accumulating dollars for the risk-free parts of their portfolios. Global demand for dollars was, as a result, effectively infinite, which meant the US could borrow whatever it wanted, secure in the knowledge that the Treasury bonds it created would find willing buyers.

But quietly, over the past couple of decades, the dollar has been joined at the top by the euro, yen, pound sterling and Swiss franc. And now the list of legitimate reserve currencies has expanded to include Canadian and Australian dollars:

Aussie, Canada dollars termed reserve currencies

LONDON (MarketWatch) — The Australian and Canadian dollars, the world’s leading commodity-rich currencies, are being formally classified as official reserve assets by the International Monetary Fund, marking the onset of a multi-currency reserve system and a new era in world money.

In a seemingly innocuous yet highly portentous move, the IMF is asking member countries from next year to include the Australian and Canadian dollars in statistics supplied by reserve-holding nations on the make-up of their central banks’ foreign exchange reserves. The technical-sounding measure, reflecting growing diversification of the world’s $10.5 trillion of reserves, is likely over time to exert wide-ranging impact on world bond and equity markets.

Expanding by two the list of officially recognized reserve assets from the present five — the dollar, euro, sterling, yen and Swiss franc — signals a new phase in the development of reserve money. For most of the past 150 years, the world has had just two reserve currencies, with sterling in the lead until the First World War, and the dollar taking over as the prime asset during the past 100 years.

Sterling — although still the world’s third reserve currency on IMF figures, just ahead of the yen — has been in relative decline since the Second World War. The birth of the euro in 1999 has turned the European single currency into the world’s No. 2 reserve unit, but it is now officially accepted that the dollar and the euro share their role with smaller currencies.

Enshrining in official thinking a development already evident among reserve managers and on private markets, in a sense, does no more than catch up with reality.


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What A Difference A Year Makes

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

As we approached the debt-ceiling debacle last year, there was much wailing and gnashing of teeth among talking heads and portfolio managers and indeed the latter actually started to put their money where there mouth was – i.e. they sold/reduced exposure to US equities. A year or so later and the fiscal cliff and debt-ceiling SNAFU is once again upon us but this time, while sentiment is just as negative, real speculative positioning is at multi-year record high longs. It would seem to us that all those holding out for a hero in Congress and some compromise to provide a liftathon in stocks are already all-in (as the two charts below indicate oh so clearly). One can only hope they are not disappointed as the ‘money on the sidelines’ appears to be more exposed than ever and unlike last year’s massive net short positioning, there is no more squeeze ammunition left for the next leg.

 

Last Fall’s debt-ceiling-inspired sell-off and massive short-biased position (lower pane) provided just the ammunition to squeeze a huge (central-bank-inspired) rally for the first quarter of the year and claim victory for the bulls from the jaws of defeat… this time the situation is very different…

 

and as the longer-term chart of relative positioning shows – speculative positioning is as long as it has ever been heading into this extreme binary uncertainty…

 

The last time we were this net long, the S&P 500 dropped over 20% in the next two months… and the S&P 500 has averaged a -3.3% performance over the following six-months from a 2-sigma net speculative long position such as this – and a 63% hit rate since record began.

It would appear that any sustained rally from here will need to come from fresh and excited money as opposed to the short-squeeze of last year.

We humbly suggest that the next mouth-breather that mentions markets are set for a huge rally if fiscal cliff resolution occurs OR opines of the money that is so desperate to chase into stocks when Boehner and Obama speak next – tell them to kindly look at these two charts and explain how traders have never been so net long stocks…

Surveys Do Not Matter! Real Money Positioing Matters!

Charts: Morgan Stanley and Bloomberg





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The Four Debt Ceiling Possibilities For 2013

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

An extended excerpt from Bill Buckler of The Privateer

The Four Major Possibilities For 2013

There are four likely “scenarios” for what will happen when the US Congress – and the president – come up against the limit to the Treasury’s credit card sometime in the first quarter of 2013. The first one is the most obvious. They could simply abolish or “repeal” or draw a line through the legislation which set up the debt limit in 1917. There is no shortage of eminent US historians, economists, captains of industry, politicians, legal scholars, bankers, investors and others from all walks of life advocating this procedure.

If the US Dollar was not the world’s reserve currency and US Treasury IOUs were not the world’s preferred holding of reserves behind their own currencies and financial systems, the Treasury’s debt limit would have been done away with a long time ago. But the US Dollar IS the world’s reserve currency so the debt of the US government IS the underpinnings of the global financial system. That being the case, the system stands or falls on the continuing perception that Treasury debt paper is a viable form of “reserve” and that the debt of the US government will NEVER become “unsustainable”. An announcement by the US government that it was getting rid of any “limits” to its debt-generating capacity would put that perception at risk – quite possibly at grave risk. That is the reason why the debt limit remains – even though it has not been an impediment to ever increasing Treasury indebtedness for well over half a century. It is easy to laugh at the seeming absurdity of a Treasury “debt limit” and many people do. Take it away, however, and the fiction that sovereign debt is “sustainable” – let alone any “confidence” in its eventual repayment – would be MUCH harder to maintain. Absurdities abound in history, and the more abject the absurdity, the more tenacious it tends to be. Today, a US Treasury debt “limit” is a very necessary absurdity.

This does not mean that the debt limit will NOT be abolished. But it does mean that the new Congress convening early next year will be very reluctant to take such a step.

The second possibility is that the US government will follow the…
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S&P 500 and Gold Rallied; News was Negative

S&P 500 and Gold Rallied; News was Negative

Courtesy of JW Jones of TRADERS VIDEO PLAYBOOK

The amount of negative news that we have seen recently has been mind-blowing. Europe is going into recession, Greece and several other countries are on the verge of bankruptcy, the Middle East is a powder-keg, and the U.S. is facing a fiscal cliff. Shockingly for most retail traders, the past week has produced a very strong return for U.S. equity indexes as well as risk assets in general.

Retail investors often times lose money because they focus on the financial media and all of the negative news that is out there. However, there is never an absence of negative news or potentially poor economic possibilities. Markets certainly can decline, but news is overrated as a driver. The markets are cyclical in nature and never move in a straight line.

Based on what I was reading from most of the financial blogosphere recently, you would think that the entire world was about to end. A few blogs were calling for an all out collapse late last week or a possible crash this past Monday, November 19. As is typically the case, the market prognosticators were wrong with the calls for a crash in financial markets.

At TradersVideoPlaybook, we were expecting higher prices. At our service, we lay out regular videos covering a variety of underlying assets from the S&P 500 Index and oil futures, to gold and treasury futures. The focus is purely on analysis of various underlying assets across multiple time frames. We cover intraday time frames as well as daily and weekly swing time frames throughout the week with videos and written updates.

To put into perspective what we were seeing in the marketplace on Monday November 19, the following chart was sent out to our members during intraday trading that day.

 

ES Mini - emini SPX Trading Chart

 

The target we were expecting was at the top of the recent channel. As shown directly on the chart above was my…
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Skills Don’t Pay the Bills

In "Skills Don’t Pay the Bills," Adam Davidson delves into many aspects of employment in the US. 

Excerpt:

Nearly six million factory jobs, almost a third of the entire manufacturing industry, have disappeared since 2000. And while many of these jobs were lost to competition with low-wage countries, even more vanished because of computer-driven machinery that can do the work of 10, or in some cases, 100 workers. Those jobs are not coming back, but many believe that the industry’s future (and, to some extent, the future of the American economy) lies in training a new generation for highly skilled manufacturing jobs — the ones that require people who know how to run the computer that runs the machine.

This is partly because advanced manufacturing is really complicated. Running these machines requires a basic understanding of metallurgy, physics, chemistry, pneumatics, electrical wiring and computer code. It also requires a worker with the ability to figure out what’s going on when the machine isn’t working properly. And aspiring workers often need to spend a considerable amount of time and money taking classes like Goldenberg’s to even be considered. Every one of Goldenberg’s students, he says, will probably have a job for as long as he or she wants one.

Full article: Skills Don’t Pay the Bills – NYTimes.com.

Some points and comments:

1. Manufacturing has become reliant on computers.  Today’s skilled factory worker is a "hybrid of an old-school machinist and a computer programmer." Students need to learn how to write computer code to program machines to do the manufacturing work faster. Classes in advanced manufacturing are filled to capacity.

2. Hundreds of thousands of U.S. factories need skilled workers. It's estimated that roughly 600,000 jobs are available for people with the right skills.

3. High skill jobs in advanced manufacturing are low-paying jobs. Getting the education to do the work is expensive, but the jobs do not pay much more than working at McDonald's. 

4. The problem is not a "skills gap."  Factory managers are having a hard time finding workers for $10/hr jobs.  A skill shortage without concurrent pressure to raise wages is odd; supply-demand theory would predict otherwise. This is a puzzling disconnect. 

Excerpt:

'Trying to hire high-skilled workers at rock-bottom rates,' the Boston Group study asserted, 'is not a skills gap.' The study’s conclusion, however, was scarier. Many skilled workers have simply


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Zero Hedge

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

Courtesy of ZeroHedge. View original post here.

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

Several doctors from Hopkins an...



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Phil's Favorites

This Is The One Chart Every Trader Should Have "Taped To Their Screen"

Courtesy of Zero Hedge

After a year of tapering, the Fed’s balance sheet finally captured the market’s attention during the last three months of 2018.

By the start of the fourth quarter, the Fed had finished raising the caps on monthly roll-off of its balance sheet to the full $50bn per month (peaking at $30bn USTs, $20bn MBS, although on many months the (balance sheet) B/S does not actually shrink by this full amount which depends on the redemption schedule) and by end-Q4 markets also experienced some of the largest volatility and drawdowns in nearly a decade.

As Nomura&...



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ValueWalk

The Competition For Capital Has Made Stocks Cheap

By Michelle Jones. Originally published at ValueWalk.

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

StockSnap / PixabayVolatility carries into the new year

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



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Kimble Charting Solutions

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

Courtesy of Chris Kimble.

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

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

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

If you find long-term perspectives helpf...



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Digital Currencies

Transparency and privacy: Empowering people through blockchain

 

Transparency and privacy: Empowering people through blockchain

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

Courtesy of Ajay Kumar Shrestha, University of Saskatchewan

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

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



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Insider Scoop

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

Courtesy of Benzinga.

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

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

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Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

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

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

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About Phil:

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

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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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