Archive for 2012

Weekly Market Commentary: Santa Rally Week 4

Courtesy of Declan Fallon

It was a relatively good week for bulls, with breadth continuing to improve for technology indices. The indices did close near the week lows, but losses may be overstated.

The Percentage of Nasdaq Stocks above the 50-day MA fell just shy of the 50% mark, but still managed to add a few points from last week.

The Nasdaq Bullish Percents did scrape over the 50% mark, but it has been a very modest advance in this particular breadth index since the start of the Santa Rally. It would be good to get a but more ‘oomph’, but the spring/summer rally started under similar conditions, and it lasted a number of months.

However, the Nasdaq Summation Index made good ground. There is little to suggest the rally is about to end anytime soon.

The Nasdaq finished near the lows, but remains effectively range bound; 2,800 is support and 3,200 is resistance (with 3,100 minor resistance). On-Balance-Volume switched to a ‘sell’ trigger.

The Russell 2000 held its breakout, but looks like its ready to enter a couple of weeks of weakness.  It will be important breakout support holds,with 775 the last stand for bulls.

The S&P also looks ready for a period of weakness, but is at least in the upper range for a possible challenge of 1,474.  Key support looks to be around 1,350.

Despite modest point losses, it was a good week for bulls.  This week may see some additional downside, but the broader picture remains bullish.

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Depardieu ‘Shrugged’

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Via Emmanuel Martin, Executive Director of
the Institute for Economic Studies-Europe (www.ies-europe.org) and editor of www.LibreAfrique.org.,

Last week the big story in French headlines has been the tax exile of Gerard Depardieu in Nechin, Belgium, half a mile from the French border. French PM Jean-Marc Ayrault called the French movie star’s behavior “minable” (pathetic). A socialist MP, Yann Galut, even suggested that M. Depardieu loses his French nationality. In an open letter in the Journal Du Dimanche on December 16, Depardieu, who famously starred as Obélix, the big Gallic fellow of Astérix, carrying menhirs on his back – and sometimes throwing them at the Romans, replies. With a taste of Ayn Rand’s famous character John Galt. Gerard shrugged.

Depardieu begins by saying that what is pathetic is to call his behavior pathetic. Although he does not want to justify the many reasons of his choice, he makes it clear that he leaves after paying 85% of taxes on his income this year and € 145 million through his entire life; He leaves because the French PM thinks that “success, creation and talent, in fact difference, must be punished”. He then reminds Jean-Marc Ayrault that he set up companies that employ 80 people. Depardieu says he is ready to give up his French passport and his “Social Security” (the French public health care system, which he claims he never used).

This letter is important.

First because thanks to a top actor, the categories of incentives and unintended (though highly expectable) consequences will probably enter the “consciousness area” of a statist French political class (right and left alike). Imposing a 75% income tax above €1 million does have consequences on the incentives of the rich and creative people. Mr Hollande and his team might call it “just” because, as the French President once famously said, he doesn’t “like the rich”, the fact is that one does not promote economic progress by hitting the creative and successful minds. Those are obsolete collectivist policies based on envy and scapegoating: they are only effective at creating division and killing the goose with the golden egg, that is, generate more poverty. Not exactly “just” in the end.

Second because Depardieu stresses the fact that he is a European, a “citizen of the World”, and remains a “free…
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JP Morgan Admits That “QE Will Offset Almost All Of Next Year’s Government Deficit”

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

There was a time when it was nothing short of economic blasphemy and statist apostasy to suggest three things: i) that the Fed’s canonic approach to monetary policy, in which Stock not Flow was dominant, is wrong (as we alleged, among many other places, here); ii) that the Fed is monetizing the deficit, thus enabling politicians to conceive any idiotic fiscal policy: the Fed will always fund it no matter how ludicrous, converting the Fed effectively into a political power and destroying any myth of its “independence” (as we alleged, among many other places, most recently here in direct refutation of Bernanke’s sworn testimony); and iii) that by overfunding bank reserves, the same banks are left with one simple trade – to frontrum the Fed in its monetization of the long-end, in the process destroying the bond curve’s relevance as an inflationary discounting signal, with more QE, leading to tighter 10s, flatter 10s30s, even as the propensity for runaway inflation down the road soars, in the process eliminating any need for the massively overhyped, and much needed to rekindle animal spirits “rotation out of bonds and into stocks” trade (as we explained, first, here). Well, that time is now officially over, with that stalwart of statist thinking, JPMorgan, adopting all of the above contrarian views as its own, and admitting that once again, the Fed and conventional wisdom was wrong, and fringe bloggers were right all along.

And while we recreate the piece in its entirety below, here is the punchline:

Since the Lehman crisis, the Fed has been purchasing Treasuries and Agencies at a $500bn per year pace. This flow, which is equivalent to around 3.5% of US GDP, has offset more than a third of the government deficit since the end of 2008. In other words, QE purchases meant that the QE-adjusted government deficit has averaged 5.8% of GDP since the end of 2008 instead of 9.3% for the actual government deficit. This week’s Fed announcement means that this QE flow will double from a $500bn pace currently to $1tr. Coupled with a projection of a lower government deficit next year, to around 6% of GDP, this means that QE will offset almost all of next year’s government deficit.


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Mainstream Media Finally Awakens to the Fact that Big Banks Are Criminal Enterprises

Courtesy of ZeroHedge. View original post here.

Submitted by George Washington.

7534252614 dc24534f4a b Even the Mainstream Media Finally Awakens to the Fact that Big Banks Are Criminal Enterprises

Image by William Banzai

Alternative financial media have noted for years that:

  • As Nobel prize winning economist Joseph Stiglitz noted years ago:

“The system is set so that even if you’re caught, the penalty is just a small number relative to what you walk home with.

 

The fine is just a cost of doing business. It’s like a parking fine. Sometimes you make a decision to park knowing that you might get a fine because going around the corner to the parking lot takes you too much time.”

Now – with the slap on the wrist of giant HSBC for laundering huge sums of drug money (the Guardian points out that “the sum represents about four weeks’ earnings given the bank’s pre-tax profits of $21.9bn last year”) – even the mainstream press is starting to catch on.

The New York Times notes:

Congressional hearings exposed weaknesses at the Office of the Comptroller of the Currency, the national bank regulator. In 2010, the regulator found


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Is The US Killing The Global Economy?

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Originally posted at Armstrong Economics,

The United States is the ONLY country that taxes American citizens even if they have never lived in the United States at any time. Once born American, you owe taxes as an economic slave even when you receive nothing and have never lived in the USA. This law passed last December that authorizes the confiscation of any firm’s assets if they do not report what an American citizen does overseas has been devastating. Americans have been thrown out of banks everywhere. In Switzerland, you have to fill out papers to open and account swearing you are not an American citizen even if you are Swiss. Americans are being thrown out of public funds and just about everything anywhere right down to safety deposit boxes. The balance of trade will continue to collapse as foreign goods can be sold to Americans but Americans cannot open businesses overseas unless you are part of the big multinational corporations. This alone has sent the velocity of money spiraling downward. However, what is going on now is just off the wall.

The US government is now hunting down people who may have had one parent as an American yet they have lived outside the USA all their lives. The IRS has been hunting lineage of Canadians who had one American parent and are sending them letters informing them that by US law they should have been paying taxes their whole life to America in addition to Canada. This is sending countless Canadians running for lawyers all because the USA is broke.

http://www.theglobeandmail.com/globe-investor/personal-finance/us-tax-crackdown-hits-canadian-residents/article584297/

How Americans are being treated by their own country is not as a free individual, but as economic property to pay revenue to the government regardless of where they live. NO OTHER NATION DOES THIS BUT THE USA. We are in such serious trouble with this Sovereign Debt Crisis that all liberty is being lost. Virtually every other major nation does not tax worldwide income if earned outside the country under the simple theory you pay taxes to use state services. If you are not there, you do not pay. American are owned by the government no different than the days of slavery. If your parents were slaves, you were the moment you were born. We perhaps ended private ownership of people,…
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The Sandy Hook?

Might Obama take the hook and stand up for something?  

Guns, Parents and Sandy Hook: Time to Take The Bullet

By Andrew Cohen at The Atlantic

On Saturday afternoon, a grim state official, Connecticut Chief Medical Examiner Wayne Carver revealed to the world that the primary weapon used on the Sandy Hook school victims was not a handgun but rather a long gun, a Bushmaster .223 assault rifle, a formidable killing machine eschewed by most hunters, unwieldy for self-defense, similar to weapons used by our soldiers in Afghanistan and the weapon of choice of the Beltway snipers. The 26 victims inside the school, Carver announced, were dead from three to eleven wounds each….

The most famous and powerful parent of them all, President Barack Obama, understood immediately what the Connecticut school shooting meant. Somehow more symbolically than the Aurora shooting or the Wisconsin shooting or the other Wisconsin shooting. Somehow more politically than the Tucson shooting or any of the other acts of gun violence which have unfolded upon this president's watch. No one who watched his remarks Friday, watched him wipe away the tears, heard the choke in his voice, can plausibly contend otherwise.

The president teared up when he talked about the lives the young victims would never get to live. No doubt he reflected, too, upon the pain and anger he would feel if his own girls never came home from school one day. I suspect that every parent in America teared up Friday with the same thought. What if it had been my kid? What would that frantic drive to school be like? What words would the police officer use to tell me my child was dead? What would life be like on the day after I sent my child to school and had to pick up that child at the county morgue?

These are emotions, raw and powerful, and if the president can ever harness them, can ever direct the shock and outrage that tens of millions parents felt this weekend, then what Obama called "meaningful" gun reform wouldn't just be possible — it would be inevitable. The NRA is a mighty thing. But as mighty as it is, it is no match for the political power of the "parent lobby" in this country. If we parents ever decided to take a stand between our children and the gun lobby, we would perhaps be


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European Risk Catalysts For The Next Six Months

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

The following is a list of key events to watch over the next several weeks and months – events that could have bearing on how the euro sovereign debt crisis evolves.

As a reminder – the trajectory of Europe is NOT up…

 

December:

  • 18 December: Spain auction. Bills.
  • 27 December: Italy auction. Bills.
  • 28 December: Italy auction. Bonds.

January:

  • January: Greek disbursement. Ireland takes over
  • 1 January: Ireland assumes rotating presidency of the EU. Ireland takes over from Cyprus.
  • 8 January: Greece auction. Bills.
  • 10 January: ECB Governing Council meeting, followed by the interest rate announcement and press conference.
  • 10 January: Spain auction. Bonds.
  • 15 January: Spain auction. Bills.
  • 17 January: Spain auction. Bonds.
  • 21-22 January: Eurogroup/ECOFIN meetings. Latest meetings of the 17 euro area and 27 EU finance ministers. On the agenda: the sixth review of the Portuguese loan programme; Stability and Growth Pact implementation for euro area countries; and the follow-up on ‘Four Presidents’ roadmap to closer integration.
  • 22 January: Spain auction. Bills.
  • 30 January: World Economic Forum, Davos, Switzerland (to 1 January).

February:

  • 7 February: ECB Governing Council meeting, followed by the interest rate announcement and press conference. The latest bank lending survey will be available to the ECB. This will be published in late January or early February.
  • 7-8 February: EU leaders’ summit.
  • 11-12 February: Eurogroup/ECOFIN meetings. Latest meetings of the 17 euro area and 27 EU finance ministers. On the agenda will be the Annual Growth Survey conclusions. This is the exercise in which the Commission sets out the priorities for member states to follow in order to achieve growth. The AGS is part of the new ‘European Semester’, the integrated policy coordination framework. The AGS priorities for 2013 are: reducing national debts without harming growth; restoring normal lending to the economy; promoting growth and competitiveness; tackling unemployment and the social consequences of the crisis; modernising public administration;

March:

  • 4-5 March: Eurogroup/ECOFIN meetings. The agenda is expected to include: the second review of the Greek loan programme; the second review of the Spanish bank recapitalisation programme; and the implications of the Commission’s winter forecast revisions for the excessive deficit procedures.
  • 7 March: ECB Governing Council meeting, followed by the interest rate announcement and press conference. The new


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Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.

To learn more, sign up for David’s free newsletter and receive the free report from All About Trends – “How To Outperform 90% Of Wall Street With Just $500 A Week.” Tell David PSW sent you. – Ilene





Japanese Yen Celebrates The Arrival Of Abenomics 2.0, Opens At 20 Month Low

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

FX markets just opened and the market’s reaction to the in-the-bag election of Shinzo Abe is ‘expectedly’ negative for the JPY. Trading up towards 84.50, JPY is back at 20-month lows against the USD with 85.50 the next target. With JPY weakness and the long-end of the Japanese sovereign bond curve at its steepest on record, it seems Abenomics 2.0 may be about to prove out the Keynesian Endgame. As Kyle Bass noted in the past, from the mouth of a Japanese finance minister “It’s only money printing when the market says it is” – well, we suspect the market is getting the joke, finally.

USDJPY (higher = weaker JPY)

 

as the skew in USDJPY FX options (3m R/R on the chart below) moves to record highs biased to expectations of further JPY weakness. Notice the correlation between the underlying and the risk-reversal has been high this year as options price in further weakening – very different regime from the 2009-2011 period…another relationship snapping back to reality…(the red oval shows a period where USDJPY was strengthening but options traders were increasingly betting against that strengthening trend)

 

JGB Yield Curve slope (30Y – 10Y) – higher = steeper

 

It seems the two are recoupling…





Is Boehner Capitulating on Tax Hike Boost? Blame Game Posturing

Courtesy of Mish.

House speaker John Boehner made an incremental move in Obama’s direction in regards to tax hikes.

Specifically, Boehner offered to raise income tax rates on households earning more than $1 million a year in exchange for containing the cost of federal entitlement programs.

Discussion are private, and president Obama rejected the offer. Specifically, the president wants hikes on those making more than $250,000. Obama also wants to avoid making significant reductions in entitlement programs such as Social Security and Medicare.

Blame Game Posturing

On the surface, this appears to be a major change in attitude by Boehner. Previously, Boehner wanted to avoid all tax hikes, instead offering the closing of loopholes to raise revenue.

Is this move a sign of capitulation or blame game posturing?

I suggest the latter. Public opinion polls show a majority of people behind some tax hikes on the wealthy. Boehner now has an offer on the table.

There may be one more move in Obama’s direction to something like tax hikes on those making $500,000 or more. However, each move Boehner makes in the president’s direction will likely require (and should require), a move by Obama in Boehner’s direction.

It would be easy enough for Boehner to demand so much reduction in entitlement programs that the president will not go along.

Indeed, if  Boehner makes incremental steps from no tax hikes to tax hikes on $1,000,000 or more, to tax hikes on $750,000 or more to tax hikes on $500,000 or more … then if Obama rejects the offer, Republicans can rightfully pin this on the president.

That is the game in play at the moment. If Boehner plays the game properly, Republicans can either get a reasonable deal, or avoid the blame if the whole thing collapses.



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Zero Hedge

For The First Time Since The Crisis, Companies Spent More On Buybacks And Dividends Than They Earned...

Courtesy of ZeroHedge View original post here.

It will hardly come as a surprise to many, but according to the latest cash flow analysis from Goldman Sachs, 2018 was a record year for S&P 500 cash spending: not only did aggregate spending on capex, R&D, cash acquisitions, dividends, and share repurchases rose by 25% to $2.8 trillion, "the fastest year/year growth in 30 years"...

...



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Phil's Favorites

Fed's Balance Sheet Spikes by $253 Billion, Now Topping $4 Trillion

Courtesy of Pam Martens

By Pam Martens and Russ Martens: October 18, 2019 ~

Shhh! Don’t tell Congress that the Federal Reserve is back to electronically creating money out of thin air to throw at a liquidity problem (of an, as yet, undetermined origin) on Wall Street. And be sure not to mention that the Fed’s balance sheet has shot up in a period of just 42 days by $253 billion. And, of course, don’t remind Congress that before the last Wall Street crisis was over the Fed had secretly, with no oversight from Congress, piled up ...



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Insider Scoop

48 Biggest Movers From Yesterday

Courtesy of Benzinga

Gainers
  • Hepion Pharmaceuticals, Inc. (NASDAQ: HEPA) shares climbed 43.2% to close at $3.58 on Thursday after the company announced the publication of a research article, "A Pan-Cyclophilin Inhibitor, CRV431, Decreases Fibrosis and Tumor Development in Chronic Liver Disease Models," in the peer-reviewed Journal of Pharmacology and Experimental Therapeutics.
  • Synthesis Energy Systems, Inc. (NASDAQ: SES) rose 26.9% to close at $9.20 after surging 12.24% on Wednesday.
  • Assembly Biosciences, Inc...


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Kimble Charting Solutions

Bank Index Breakout? Stock Market Bulls Sure Hope So

Courtesy of Chris Kimble

One of the most important sectors of the stock market is the banking industry and bank stocks.

When the banks are healthy, the economy is likely doing well. And when bank stocks are participating in a market rally, then it bodes well for the broader stock market.

In today’s chart, we look at the Bank Index (BKX).

As you can see, the banks have been in a falling channel for the past 20 months. As well, the banks have been lagging the broader market during this time as well – see the Ratio in the bottom half of the chart above.

That said, th...



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The Technical Traders

Currencies Show A Shift to Safety And Maturity - What Does It Mean?

Courtesy of Technical Traders

Recent rotation in multiple foreign currencies hints at the fact that a new stage of the “Capital Shift” process is taking place and that skilled technical investors need to pay very close attention to how these currencies continue to react over the next 3 to 6+ months.  In the recent past, most of the world’s foreign currencies were declining in value while the US Dollar continued to strengthen.  In fact, we authored many research articles about these trends and how weakness in foreign currencies will drive new foreign investment into the US stock markets for two simple reasons; strength and security. 

Now that a few of the world’s most ...



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Chart School

Review of Andrew CardWell RSI with Wyckoff price waves

Courtesy of Read the Ticker

RSI measures relative strength of price action of a set period versus prior set periods. It helps review the price swings or waves, the power of each price thrust into new ground, or lack of it. Price thrust like many things relies on energy, and energy is not a constant, it has a birth, a life and a death and relative strength helps us see that cycle. 

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Digital Currencies

Zuck Delays Libra Launch Date Due To Issues "Sensitive To Society"

Courtesy of ZeroHedge View original post here.

Authored by William Suberg via CoinTelegraph.com,

Facebook is taking a much more careful approach to Libra than its previous projects, CEO Mark Zuckerberg has confirmed. 

“Obviously we want to move forward at some point soon [and] not have this take many years to roll out,” he said. “But ...



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Lee's Free Thinking

Look Out Bears! Fed New QE Now Up to $165 Billion

Courtesy of Lee Adler

I have been warning for months that the Fed would need new QE to counter the impact of massive waves of Treasury supply. I thought that that would come later, rather than sooner. Sorry folks, wrong about that. The NY Fed announced another round of new TOMO (Temporary Open Market Operations) today.

In addition to the $75 billion in overnight repos that the Fed issued and has been rolling over since Tuesday, next week the Fed will issue another $90 billion. They’ll come in the form of three $30 billion, 14 day repos to be offered next week.

That brings the new Fed QE to a total of $165 billion. Even in the worst days of the financial crisis, I can’t remember the Fed ballooning its balance sheet by $165 bi...



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Biotech

The Big Pharma Takeover of Medical Cannabis

Reminder: We are available to chat with Members, comments are found below each post.

 

The Big Pharma Takeover of Medical Cannabis

Courtesy of  , Visual Capitalist

The Big Pharma Takeover of Medical Cannabis

As evidence of cannabis’ many benefits mounts, so does the interest from the global pharmaceutical industry, known as Big Pharma. The entrance of such behemoths will radically transform the cannabis industry—once heavily stigmatized, it is now a potentially game-changing source of growth for countless co...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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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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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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