Archive for 2013

Swing trading portfolio – week of May 6th, 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

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Swing trading virtual portfolio

 

One trade virtual portfolio

 

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





Visualizing The Triumph Of Hope Over Reality

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

The Federal Reserve’s extreme monetary policy has done nothing but repress ‘safe’ assets to the point of making ‘risky’ assets relatively cheap. This is of course not the case were you to isolate each risky or safe asset and consider its value standalone. Choosing stocks over bonds because “well, what is the alternative?” is akin to the red-pill/blue-pill choice from The Matrix and the reflationary ‘normal’ that we are supposed to believe in is what ‘apparently’ justifies a 1.7x rise (12%!) in multiples since QE4EVA was announced. During that same period, consensus earnings expectations have plunged (merely pushed out one more year for the renaissance) and global trade and growth has collapsed. However, while we have shown many divergences from reality in the past, it is the manic/depressive difference between inflation expectations and stock valuations (implicitly supported by reflation) that is the clearest example of the short-term triumph of hope over reality.

 

The plunge in consensus 2013 earnings since August is stunning (as is the resplendent rise in 2014 expectations)… just one more year….

 

but that didn’t matter as P/E ratios surged… on the back of QE4EVA – though ‘cyclically’ we appear to be nearing the Central Banker limit for short-term impacts…

 

But this time, the inflationary pull of rising P/E ratios simply does not fit with the deflationary ‘pricing’ the market assigns to forward inflation expectations…

 

In fact, inflation expectations have now faded all the way back to QE3 levels – which can mean only one thing (for fear of the dreaded deflation)… moar QE…

 

Charts: Barclays, Bloomberg





German Finance Minister Who Launched Euro, Calls For Euro’s Breakup

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Back in December we pointed out the patently obvious: in the absence of an external rebalancing mechanism, i.e., a free-floating currency, the only option for the bulk of the periphery to regain competitiveness was through ongoing wage collapse and persistent localized depression. Five months later, just as predicted, Europe is in a worse shape than ever before, not only in those non-core countries where wage deflation is accelerating, but the weakness has fully spilled over to the core. Of course, none of this is rocket science, and has been quite obvious to anyone who thought for more than 15 seconds about the “future” of the Eurozone. What is surprising, however, is that with every passing day even the most staunchest supporters of the euro, in this case Oskar Lafontaine, German finance minister in 1998-1999, under whose supervision the euro was launched, are becoming the most vocal Euro-skeptics an unsound, political (capital) currency can no longer buy. Here is the Telegraph’s Ambrose Evans-Prithard dissecting the conversion of the latest europhile turned euroskeptic.

From The Telegraph

Oskar Lafontaine, the German finance minister who launched the euro, has called for a break-up of the single currency to let southern Europe recover, warning that the current course is “leading to disaster”. 

 

“The economic situation is worsening from month to month, and unemployment has reached a level that puts democratic structures ever more in doubt,” he said.

 

The Germans have not yet realised that southern Europe, including France, will be forced by their current misery to fight back against German hegemony sooner or later,” he said, blaming much of the crisis on Germany’s wage squeeze to gain export share.

 

Mr Lafontaine said on the parliamentary website of Germany’s Left Party that Chancellor Angela Merkel will “awake from her self-righteous slumber” once the countries in trouble unite to force a change in crisis policy at Germany’s expense.

 

His prediction appeared confirmed as French finance minister Pierre Moscovici yesterday proclaimed the end of austerity and a triumph of French policy, risking further damage to the tattered relations between Paris and Berlin.

 

“Austerity is finished. This is a decisive turn in the history of the EU project since the euro,” he told French TV. “We’re


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Turning A Donkey Into A Butterfly

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

The clear message from the doctors this week is that they plan to keep administering the pills, in larger quantities if necessary, until the donkey turns into a butterfly. Citi’s Matt King reminds us though that they failed to mention the associated risk that the donkey dies of the side effects first (apart, that is, from Dr Osborne, who urged the other doctors to ignore any such possibility entirely). For investors, King notes the immediate implication is that the central banks would like the party in any and all risk assets to carry on. This raises the spectre of a rally back to 2007 valuations, made all the more dizzying this time by the lack of any accompanying justification in the state of the economy…

Via Citi’s Matt King,

Party Like It’s 2006

…[ interest rates] are the one asset class which is at least following fundamentals. Both extra central bank liquidity and poor economic data contrive to send yields lower.

 

It feels a lot like the environment last year. In theory, lower yields and the threat of negative deposit rates are supposed to spur lending. In practice, they aggravate the hole in pensions, and exacerbate an already self-reinforcing cycle in which the premium on ‘safe’ assets merely serves to highlight the riskiness of the overall macro picture.

 

The only difference between now and then is the way in which the ECB has succeeded in getting peripheral govies reclassified from ‘risky’ to ‘safe’, regardless of their fundamentals. The effect has been strongest among peripheral banks, who have clearly decided that the best way to make use of abundant liquidity is through large increases in their government bond holdings. Other investors have consequently been forced to follow suit.

 

Credit, sadly, is just a passenger in this story. One reason the rally has proved so painful for many investors is that it has been so exclusively concentrated [in the most obviously risky instruments and entities]. And yet if those [positions] continue to rally, it remains easier even now to squeeze the remaining shorts than it is to force any reduction in the real risk positions out there.

 

Had all this been accompanied by any substantive improvement in economic prospects and underlying sovereign and corporate


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Ron Paul: “This Is A House Of Cards”

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Authored by Ron Paul, via The Free Foundation,

Federal Reserve Blows More Bubbles

Last week at its regular policy-setting meeting, the Federal Reserve announced it would double down on the policies that have failed to produce anything but a stagnant economy. It was a disappointing, but not surprising, move.

The Fed affirmed that it is prepared to increase its monthly purchases of Treasuries and mortgage-backed securities if things don’t start looking up. But actually the Fed has already been buying more than the announced $85 billion per month. Between February and March, the Fed’s securities holdings increased $95 billion. From March to April, they increased $100 billion. In all, the Fed has pumped more than a half trillion dollars into the economy since announcing its latest round of “quantitative easing” (QE3) in September 2012.

Although many were up in arms when the Fed said it would buy $600 billion in government debt outright for the previous round, QE2, all seems quiet about the magnitude of QE3 because it doesn’t come with huge up-front total price tag. But by year’s end the Fed’s balance sheet could hit $4 trillion.

With no recovery in sight, where’s all this money going? It is creating bubbles. Bubbles in the housing sector, the stock market, and government debt. The national debt is fast approaching $17 trillion, with the Fed monetizing most of the newly issued debt. The stock market has been hitting record highs for the past two months as investors seek to capitalize on the Fed’s easy money. After all, as long as the Fed keeps the spigot open, nominal profits are there for the taking. But this is a house of cards. Eventually, just like in 2008-2009, the market will discipline the bad actions of the Fed and seek to find the real normal.

In the meantime, real families are suffering. While Wall Street and the government take advantage of access to the Fed’s new “free” money, the Fed claims there is no inflation. But who hasn’t paid higher prices at the grocery store, the gas pump, for tuition, for insurance? It’s bad enough that household incomes have stagnated, but real purchasing power has declined so much that one in seven Americans, 47.3 million people, are on food stamps. Five million are collecting unemployment insurance with 21.5…
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Guest Post: What Is Obvious About This Market?

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

What is "obvious" to those embedded in the conventional, MSM/state-manufactured worldview is not the same as what is obvious to those outside the asylum.

 
Longtime readers know my analytic perspective is based on what psychiatrist/author R.D. Laing called the Politics of Experience.
 
 
In his prescient 1972 lecture, The Obvious, Laing explained the inherent difficulty of understanding "the obvious" when a systemic madness is taken as "normal":

To a considerable extent what follows is an essay in stating what I take to be obvious. It is obvious that the social world situation is endangering the future of all life on this planet. To state the obvious is to share with you what (in your view) my misconceptions might be. The obvious can be dangerous. The deluded man frequently finds his delusions so obvious that he can hardly credit the good faith of those who do not share them.

We can summarize one aspect of this analysis by asking: what is "obvious" to those inside a system and what is "obvious" to those outside the system? Our experience of what is "obvious" says a lot about our cultural context and assumptions: the manufacture of our "news" and consensus, the mystification of our experience via propaganda and simulacra, what we perceive as "normal" relationships, work, goals, etc.
 
What is "obvious" to most participants is that the stock rally is fueled by central bank liquidity and quantitative easing, and since there is no limit in sight to these policies, there is also no limit to the stock market running higher.
 


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Weekly Market Commentary: Rally Expands

Courtesy of Declan Fallon

Market Breadth accelerated higher, firming up the swing low and supporting the current leg of the rally. The swing low emerged from relative strength – not from an oversold state – as is typical at major lows. So while the Percentage of Nasdaq Stocks above the 50-day MA has room to run before it becomes overbought, the Nasdaq Bullish Percents and Nasdaq Summation Index will be soon be in overbought territory once more.


The number of New Highs – New Lows continues to map a top, although for the parent index this is more likely to be associated with a sideways market, rather than a hard sell off as occurred in 2008.

The daily chart for the Russell 2000 displays vulnerabilities, although the weekly chart remains bullish, with a few opportunities for buyers to step in on future price declines.

Although the Nasdaq offers the better opportunity on the daily time interval, with the weekly chart offering good support for a rally too.

Until there is a significant break of support, or all market breadth indicators become overbought, the rally should continue for a little while longer.  However, for those tracking my investment strategy, Friday qualified as a day to take profit / sell covered call day: the S&P has extended itself by more than 10% from its 200-day MA.  The last time this signal was given was March-April of last year; two months later the S&P was down nearly 9%.

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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com. You can read what others are saying about Zignals on Investimonials.com.

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Chinese Growth – Real Or Imagined?

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

We toyed with titling this post “Lies, Damned Lies, And Chinese Statistics” but perhaps that is a little harsh, though one glance at the chart below and one instantly comprehends the efforts that are being undertaken to ‘show’ the world that China’s transition is on target (and crumbling into collapse). As we recently noted, it is actually unlikely that China can complete this transition to organic (as opposed to investment-led) growth (with moderate growth the exception not the rule), and China’s recent trade data does not pass the smell test. As GREED & Fear’s Chris Wood notes, with the Hong Kong trade data being released last week, it is worth noting a growing discrepancy between the data on China’s exports to Hong Kong reported by mainland’s customs department and the corresponding data on Hong Kong’s imports from China reported by Hong Kong’s Census and Statistics Department in March. Such inconsistency in China’s export numbers relative to the imports data from its trading partners has generated growing speculation about the credibility of China’s trade figures. Various explanations have been put forward (below) but the divergence would seem far too large to be simply explained by “different statistical methods” as the Chinese government’s official line notes.

Via GREED & Fear,

Hong Kong’s reported imports from China rose by “only” 13.8%YoY to US$20.6bn in March and were up 10%YoY to US$56bn in 1Q13. By contrast, China reported that exports to Hong Kong surged by 93%YoY to US$48.4bn in March and were up 74%YoY to US$106bn in 1Q13. As a result, the ratio between China’s reported exports to Hong Kong and Hong Kong’s reported imports from China has surged to 2.35 times in March, up from 1.36x in 2012 and an average of 1.11x during the previous five years between 2007 and 2011.

 

 

Such inconsistency in China’s export numbers relative to the imports data from its trading partners has generated growing speculation about the credibility of China’s trade figures.

 

One suggestion, as noted by CLSA’s head of economic research Eric Fishwick, is that Chinese companies have been inflating their shipment data to take advantage of the government’s export tax rebates.

 

Another explanation GREED & fear has heard recently is that Chinese companies are over-invoicing their exports


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An Unqualified Apology

Niall Ferguson apologizes for his deeply insensitive and politically incorrect comments about John Maynard Keynes. For those, read this: Harvard's Niall Ferguson Blamed Keynes' Economic Philosophy On His Being Childless And Gay.

An Unqualified Apology

During a recent question-and-answer session at a conference in California, I made comments about John Maynard Keynes that were as stupid as they were insensitive.

I had been asked to comment on Keynes’s famous observation “In the long run we are all dead.” The point I had made in my presentation was that in the long run our children, grandchildren and great-grandchildren are alive, and will have to deal with the consequences of our economic actions.

But I should not have suggested – in an off-the-cuff response that was not part of my presentation – that Keynes was indifferent to the long run because he had no children, nor that he had no children because he was gay. This was doubly stupid. First, it is obvious that people who do not have children also care about future generations. Second, I had forgotten that Keynes’s wife Lydia miscarried.

My disagreements with Keynes’s economic philosophy have never had anything to do with his sexual orientation. It is simply false to suggest, as I did, that his approach to economic policy was inspired by any aspect of his personal life. As those who know me and my work are well aware, I detest all prejudice, sexual or otherwise.

My colleagues, students, and friends – straight and gay – have every right to be disappointed in me, as I am in myself. To them, and to everyone who heard my remarks at the conference or has read them since, I deeply and unreservedly apologize.

Niall Ferguson.





Guest Post: A Short History Of Currency Swaps (And Why Asset Confiscation Is Inevitable)

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Martin Sibileau of A View From The Trenches blog,

I want to offer today an historical perspective on the favorite liquidity injection tool: Currency swaps. These coordinated interventions are not a solution to the crashes, but their cause, within a game of chicken and egg. But I’ve just given you the conclusion. I need to back it now…

To read this article in pdf format, click here: May 5 2013

With equity valuations no longer levitating but in a different, 4th dimension altogether, and credit spreads compressing… Which fiduciary portfolio manager can still afford to hedge? Any price to hedge seems expensive and with no demand, the price of protection falls almost daily. The CDX NA IG20 index (i.e. the investment grade credit default swap index series 20, tracking the credit risk of 125 North American investment grade companies in the credit default swap market) closed the week at 70-71bps. The index was at this level back in the spring of 2005. By the summer of 2007, any credit portfolio manager that would have wanted to cautiously hedge with this index would have seen a further compression of 75% in spreads, completely wiping him/her out.

It is in situations like these, when the crash comes, that the proverbial run for liquidity forces central banks to coordinate liquidity injections. However, something tells me that this time, the trick won’t work. In anticipation to the next and perhaps final attempt, I want to offer today an historical perspective on the favorite liquidity injection tool:  Currency swaps. These coordinated interventions are not a solution to the crashes, but their cause, within a game of chicken and egg. But I’ve just given you the conclusion. I need to back it now…

How it all began

Let me clarify: By currency swaps, I refer to a transaction carried out between two central banks. This means that currency swaps cannot be older than the central banks that extend them. On the other hand, foreign exchange swaps between corporations may date back to the late Middle Ages, when trade began to resurface in the Italian cities and the Hansastädte. Having said this, I believe that currency swaps were…
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Phil's Favorites

Brexit: how the end of Britain's empire led to rising inequality that helped Leave to victory

 

Brexit: how the end of Britain's empire led to rising inequality that helped Leave to victory

AC Arts Photography via Shutterstock

Courtesy of Danny Dorling, University of Oxford and Sal...



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Zero Hedge

World Trade War I: US Asks South Korea To Join Anti-Huawei Campaign

Courtesy of ZeroHedge. View original post here.

The bilateral trade war between the US and China is gradually becoming a global trade war of global geopolitical and commercial dominance between the US and Chinese spheres of influence.

Shortly after the two largest mobile phone companies in the UK decided against launching Huawei-built 5G phones this morning, and roughly around the time a bevy of Japanese tech and telecom companies including ARM Holdings, Panasonic and SoftBank all imposed a boycott on supplying Huawei with mission critical components joining Australia, and New Zealand as major US allies to end commercial relat...



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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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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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