Archive for 2013

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) continued to move higher this past week as traders tweeted about putting on more long positions and their belief that the market should continue to rally. Early in the week market participants were looking for lower prices that they could buy. On Wednesday their tweets became more positive as many felt the small correction was merely profit taking and most likely over. Many were encouraged by SPX holding above 1450. As SPX moved back up into the 1465 to 1475 range traders became more cautious, creating a negative divergence with price on the daily indicator.

In our previous update we noted that smoothed sentiment was diverging from price, which led us to conclude that the most likely near term direction was down, but any consolidation shouldn’t do much damage in price. The market performed as expected, and now a week later smoothed sentiment continues its negative divergence from price; however, it is also moving higher. This suggests that the market should grind slowly higher or may need just a bit more consolidation before SPX can break above 1475.

Twitter support levels rose this week with the majority of tweets clustered in the 1440 to 1450 area, making it major support and a level the bulls need to see hold. Another small layer of support still exists at 1420, but below that it’s all white space. This suggests that traders aren’t even considering a trip back to the 1400 level.

Above the market there is still strong resistance right at 1475 on SPX, and another cluster is building in the 1490 to 1500 area. There were a large number of tweets for 1490 and 1492 which referenced a major top call from Tom DeMark of Market Studies. For more on that call, see this Bloomberg video clip.

The large volume of tweets tells us that a lot of market participants will sell that level, making it major resistance. How the market reacts to SPX 1492 will give us a strong indication of its next intermediate term move.

Our conclusion is that the market will most likely continue to…
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WeaLTHY INDiaN PHD MiNTS GoLD SHiRT To MaKe A PoiNT…

Courtesy of ZeroHedge. View original post here.

Submitted by williambanzai7.

INDIAN CLAIMS GOLD IS CLOTHING NOT MONEY

BANZAI7 NEWS--A wealthy Indian PhD has had a gold shirt minted in order to prove a point : Gold is clothing, not money.





Guest Post: On The Economic Calculation Of “Fair Share”

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Via Dusan Petrovski of the Ludwig von Mises Institute of Canada,

When one speaks of a concept it is important that it is properly qualified so as to be correctly understood. Failure to accomplish that makes impossible for either the problem to be identified or a desired solution to be found. Perhaps this is why politicians have a tendency to speak of ill-defined and oft muddled concepts, like “social justice,” “a living wage” or “fair share.” These concepts are impossible to define in a way consistent with how they are represented, since their proponents represent them as definite, rather than abstract matters. In our time the demand for “the rich” to pay their “fair share” through higher taxes has become a standard war cry broadcast from every public and crony source of media. Yet, there is no objective means of defining either what constitutes “the rich” or “fair share.” Politicians and demagogues alike may debate these issues for as long or as short as they may desire, but whatever level they agree on is sure to be arbitrary, save for the only objective conclusion that such concepts are impossible to quantify.

Given a communistic ownership of schools, roads, streets, parks, healthcare institutions, libraries, schools and universities, how is one to be able to calculate each person’s use – “fair share” – of each? What share of a road belongs to a particular taxpayer? What usage is “fair share”? How many books in any given library belong to a specific person and which specific books? Who owns the walls and who owns the library’s carpets? Does the person paying more in taxes own more of the roads, libraries or schools than the person who pays less? What of the person who pays no tax at all? What of the person who desires to use his claim on a gymnasium, and of nothing else? Does the state university graduate owe a particular service to the taxpayer that subsidized or paid for the operation of the university? A typical example of who “fair share” proponents see the world is given to us by US Sen. Elizabeth Warren:

There is nobody in this country who got rich on his own. Nobody. You built a factory out there? Good for you.


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Obama’s Chance to Do Something Right: Nominate Hagel for Secretary of Defense; Why the War Party Fears Hagel

Courtesy of Mish.

The Financial Time reports Hagel nomination expected this week.

US President Barack Obama is poised to nominate Chuck Hagel as secretary of defence, setting the stage for a tough nomination fight focusing on the former Republican senator’s views on Israel and Iran.

The announcement by Mr Obama of a new Pentagon chief to replace Leon Panetta could come as early as Monday, administration officials indicated. Mr Obama returned from a holiday in Hawaii on Sunday.

Mr Hagel’s possible nomination has caused an uproar among neoconservatives over his questioning of sanctions and military action against Iran and his statement that a “Jewish lobby” intimidates Congress.

Many Democrats have been unenthusiastic as well, because he is a Republican and over a past statement criticising a Clinton-era diplomatic appointment as “openly, aggressively gay”.

But the criticism has been especially virulent from the right, with Israel conservatives labelling him borderline anti-Semitic and suggesting he was intent in making dangerously deep cuts to the defence budget.

Lindsey Graham, a Republican senator from South Carolina and a prominent defence hawk, said on Sunday he was inclined not to support his former Senate colleague because of his “antagonistic” attitude to Israel.

“This is an in-your-face nomination by the president for all those who are supportive of Israel,” Mr Graham told CNN.

Got That?

Democrats don’t want Hagel simply because Hagel is a Republican. The Republicans do not want him because he is not a war-monger.

That’s what this whole thing boils down to.

Why the War Party Fears Hagel

Let’s fill in the details with a look at Why the War Party Fears Hagel

Who is Chuck Hagel?



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U.S. Government Using Terrorism Against the American People

Courtesy of ZeroHedge. View original post here.

Submitted by George Washington.

Year of the Snake(s) by Anthony Freda

We've documented that America is the largest sponsor of terrorism in the world.

But remember, terrorism is defined as:

The use of violence and threats to intimidate or coerce, especially for political purposes.

The American government has also been using violence and threats to intimidate and coerce the American public for political purposes.

For example, the U.S. government is doing the following things to terrorize the American public into docility and compliance:

U.S. constitutional law has taught for hundreds of years that chilling the exercise of our liberties is as dangerous to freedom than directly suppressing them.

For example, as we've previously noted, reporters censor themselves:

Initially, there is tremendous self-censorship by journalists.

 

For example, several months after 9/11, famed news anchor Dan Rather told the BBC that American reporters were practicing “a form of self-censorship”:

There was a time in South Africa that people would put flaming tires around peoples’ necks if they dissented. And in some ways the fear is that you will be necklaced here, you will have a flaming tire of lack of patriotism put around your neck. Now it is that fear that keeps journalists from asking the toughest of the tough questions…. And again, I am humbled to say, I do not except myself from this criticism.

 

What we are talking about here – whether one wants to recognise it or not, or call it by its proper name or not – is a form of self-censorship.

Keith Olbermann agreed that there is self-censorship in the American media, and that:

You can


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Year–End Investors were Penalized for Holding (Cash)

Courtesy of Dr. Paul Price

Year–End Investors were Penalized for Holding (Cash)

As congressional meetings on taxes and spending extended close to the end of 2012 I heard many comments from investment experts. Almost nobody was willing to tell people to buy stocks. Six of the seven trading days from December 18th through December 30th were down days.

The prevailing wisdom was that waiting for a political resolution was more prudent than risking a big sell-off if America ‘went over the cliff’.  There were many great stocks being offered at terrific valuations.

Instead of recommending their favorites, most pundits were telling people it was better to miss an opportunity than to lose money if the market collapsed.

They said, wait to put your money to work, till after you knew what was coming out of Washington. Many told the public to spend money buying protection (puts), if you were foolhardy enough to hold while our bickering leaders deliberated.

They couldn’t have been more wrong.

New Year Eve trading posted a nice gain. The post-holiday session gapped up huge and never looked back.  The trading gods offered no solace, or entry points to anyone who’d waited to see how congress acted before acting themselves. The full week, encompassing December 31 through January 4th was one of the best in years.

There is almost nothing as frustrating as being out of the market when it spikes higher. It’s doubly painful if you wasted  significant money on insurance you didn’t need. The horror tripled if you were caught short when the surge occurred.

If you missed the move… do you buy now at much higher prices and with more downside risk? Can you afford to stay in cash if 2013 is a replay of 2012? Last year was a rare one. There was not one day all year that the S&P 500 closed below where it finished on Dec. 31, 2011.

Nobody will always be right in calling short-term index action. The lesson to be learned is to stop trying. Buy good stocks when they are attractively priced. Hold them until company-specific fundamentals change your mind.

You’ll trade less and likely make more.

Perhaps that should be your New Year’s resolution.





“The Magic Of Compounding” – The Impact Of 1% Change In Rates On Total 2022 US Debt

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

They say “be careful what you wish for”, and they are right. Because, in the neverending story of the American “recovery” which, sadly, never comes (although in its place we keep getting now semiannual iterations of Quantitative Easing), the one recurring theme we hear over and over and over is to wait for the great rotation out of bonds and into stocks. Well, fine. Let it come. The question is what then and what happens to the US economy when rates do, finally and so overdue (for all those sellside analysts and media who have been a broken record on the topic for the past 3 years), go up. To answer just that question, which in a country that is currently at 103% debt/GDP and which will be at 109% by the end of 2013, we have decided to ignore the CBO’s farcical models and come up with our own. Our model is painfully simple, and just to give our readers a hands on feel, we have opened up the excel file for everyone to tinker with (however, unlike the CBO, we do realize that when calculating average interest, one needs to have circular references enabled so please do that before you open the model).

Our assumptions are also painfully simple:

i) grow 2012 year end GDP of ~$16 trillion at what is now widely accepted as the ‘New Normal’ 1.5% growth rate (this can be easily adjusted in the model);

ii) assume the primary deficit is a conservative and generous 6% of GDP because America will never, repeat never, address the true cause of soaring deficits: i.e., spending, which will only grow in direct proportion with demographics but as we said, we are being generous (also adjustable), and

iii) sensitize for 3 interest rate scenarios: 2% blended cash interest; 3% blended cash interest and 5% blended cash interest.

And it is here that we get a reminder of a very key lesson, one that even the CBO admitted on Friday they had forgotten about, in what compounding truly looks like in a country that is far beyond the Reinhart-Rogoff critical threshold of 80% sovereign debt/GDP.

The bottom line: going from just 2% to 3% interest, will result in total…
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Swing trading portfolio – week of January 7th, 2013

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

 





Platinum Coin: Crossing the Monetary Rubicon

Platinum Coin: Crossing the Monetary Rubicon

Courtesy of Jesse's Cafe Americain

 

You may be reading more and more commentary about the platinum coin solution, and arguments why it doesn't really matter if the US does it or not.

To summarize the concept, the Treasury creates one special platinum coin, with a stated face value of $500 billion or so. 

They trot down to the Fed and deposit the special coin(s), redeeming that amount of US notes and voila. It is a genteel form of de facto monetization, but the platinum coin adds a novel touch, and a bit of shiny misdirection. 

Some mainstream economists seem to be toying with the idea of climbing aboard the train with the Modern Monetary Theorists. Paul Krugman has a typically obtuse take on this in a recent column titled Monetary Rage.

I am not going to argue the pros and cons of this approach at this time. I have said quite a bit about this, and MMT, before.

But I do want to firmly draw your attention as to why this particular solution and approach to the debt is important, and why it raises concern among many, even though that concern is often scorned and ridiculed by the economic savants. And by the way, this is very reminiscent of the same reactions to Alan Greenspan's policies, TARP, and the housing bubble with many of the same players in similar roles.

From a Bloomberg story entitled: Why We Must Go Off the Platinum Cliff.

"In case you're not familiar with this idea: In general, the Treasury Department is not allowed to just print money if it feels like it. It must defer to the Federal Reserve's control of the money supply. But there is an exception: Platinum coins may be struck with whatever specifications the Treasury secretary sees fit, including denomination.

This law was intended to allow the production of commemorative coins for collectors. But it can also be used to create large-denomination coins that Treasury can deposit with the Fed to finance payment of the government's bills, in lieu of issuing debt."

Currently it is against the laws of the land for the Treasury to issue debt, and for the Fed to buy it directly, as opposed to running that debt through the test and discipline of the markets. I researched this a number of years ago, and do not recall the…
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What Happened The Last Four Times That US Macroeconomic ‘Surprises’ Hit A Three-Month Low?

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

The last week or two has seen Citi’s economic ‘surprise’ indicator (ECO) take a decided turn for the worse. At Friday’s close, the index that tracks not just absolute performance of the major macro prints but their relative performance to expectations, had hit a three-month low. Since the top in the S&P 500 in late 2007, the 3-month rate-of-change has shifted significantly negative four times – and each of these times has been followed by a significant downturn (or change of trend) in the S&P 500. As of Friday’s close, the ECO index’s rate-of-change shifted negative (its most negative in 5 months) and has signaled a quite intriguingly divergent lower high (from Q4 2011′ previous peak) compared to the S&P 500′s higher high. Is the short-term drop in ECO due to ‘cliff’ indecision? Or will earnings season be the market’s catalyst to realize the changing macro landscape?

 

Late 2009 saw a period of very unusual absolute stagnation in macro data (while QE1′s liquidty lifted stocks) but once the rate-of-change pushed consistently negative, the top was in for stocks in mid 2010.

The blue dotted-line indicates the lower high that macro data has shown during this latest cycle (as opposed to higher high in equities)

 

Chart: Bloomberg





 
 
 

Phil's Favorites

Overpriced tech IPOs sell grand visions but aren't worth their valuations

 

Overpriced tech IPOs sell grand visions but aren't worth their valuations

rblfmr / Shutterstock.com

Courtesy of John Colley, Warwick Business School, University of Warwick

The year of the tech IPO is 2019. Uber went public on May 10 with a US$82.4 billion valuation. Fellow ride-sharing app Lyft floated in March with a U$24 billion valuation and Pinterest had a US$10 billion IPO in April...



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Zero Hedge

Futures Slides As Trade Tensions Escalate

Courtesy of ZeroHedge. View original post here.

S&P futures were lower on Wednesday as investors sought safety in bonds, the Japanese yen and Swiss franc in muted trade amid renewed worries over the U.S.-China spat after reports Washington is considering cutting off the flow of American technology to as many as five Chinese companies including Hangzhou Hikvision Digital Technology, the world's largest supplier of video surveillance products, expanding the US crackdown on China beyond Huawei to include world leaders in video surveillance. The dollar and 10Y yield were unchanged ahead of today's FOMC Minutes.

...



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Kimble Charting Solutions

Emerging Markets About To Submerge If 3-Year Support Breaks?

Courtesy of Chris Kimble.

Are Emerging Markets about to “Submerge” and head a good deal lower? What they do at (3) will go a long way in answering this question!

Emerging Markets ETF (EEM) has been lagging the broad market for the past 15-months. They hit their 50% retracement level of the last year’s highs and lows and falling resistance at (2) recently. The weakness of last has EEM trading below its 200-MA line.

EEM has spent the majority of the past 3-years inside of rising channel (1), which reflects that this trend remains up. The weakness of late has it testing the bo...



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Insider Scoop

Amgen To Buy Danish Collaborator Nuevolution For $167M

Courtesy of Benzinga.

Amgen, Inc. (NASDAQ: AMGN) took a logical step forward in buying a preclinical biotech it has been collaborating with since 2016. 

What Happened

Amgen announced Wednesday an agreement to buy Copenhagen-based Nuevolution for $167 million.

Th...



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Chart School

Weekly Market Recap May 18, 2019

Courtesy of Blain.

China – U.S. trade talk continued to dominate the week.   A heavy selloff Monday was followed by 3 up days, with Friday moderately down.

On Monday, Chinese officials announced retaliatory tariffs against the U.S., hitting $60 billion in annual exports to China with new or expanded duties that could reach 25%.

Then on Wednesday:

The Trump administration plans to delay a decision on instituting new tariffs on car and auto part imports for up to six months, according to media reports.

...

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Digital Currencies

Cryptocurrencies are finally going mainstream - the battle is on to bring them under global control

 

Cryptocurrencies are finally going mainstream – the battle is on to bring them under global control

The high seas are getting lower. dianemeise

Courtesy of Iwa Salami, University of East London

The 21st-century revolutionaries who have dominated cryptocurrencies are having to move over. Mainstream financial institutions are adopting these assets and the blockchain technology that enables them, in what ...



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Biotech

DNA as you've never seen it before, thanks to a new nanotechnology imaging method

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

 

DNA as you've never seen it before, thanks to a new nanotechnology imaging method

A map of DNA with the double helix colored blue, the landmarks in green, and the start points for copying the molecule in red. David Gilbert/Kyle Klein, CC BY-ND

Courtesy of David M. Gilbert, Florida State University

...



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ValueWalk

More Examples Of "Typical Tesla "wise-guy scamminess"

By Jacob Wolinsky. Originally published at ValueWalk.

Stanphyl Capital’s letter to investors for the month of March 2019.

rawpixel / Pixabay

Friends and Fellow Investors:

For March 2019 the fund was up approximately 5.5% net of all fees and expenses. By way of comparison, the S&P 500 was up approximately 1.9% while the Russell 2000 was down approximately 2.1%. Year-to-date 2019 the fund is up approximately 12.8% while the S&P 500 is up approximately 13.6% and the ...



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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Mapping The Market

It's Not Capitalism, it's Crony Capitalism

A good start from :

It's Not Capitalism, it's Crony Capitalism

Excerpt:

The threat to America is this: we have abandoned our core philosophy. Our first principle of this nation as a meritocracy, a free-market economy, where competition drives economic decision-making. In its place, we have allowed a malignancy to fester, a virulent pus-filled bastardized form of economics so corrosive in nature, so dangerously pestilent, that it presents an extinction-level threat to America – both the actual nation and the “idea” of America.

This all-encompassing mutant corruption saps men’s souls, crushes opportunities, and destroys economic mobility. Its a Smash & Grab system of ill-gotten re...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

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

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Promotions

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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