Archive for 2013

Global PC Shipments Decline 6.4%; Best Buy Sales Flat; Toys R Us Sales Decline 4.5%; 4th Quarter GDP Estimate Reduced to .8% from 1.5%

Courtesy of Mish.

Holiday sales of electronics and toys plunged this past Christmas season. Also of note, JPMorgan lowered its annualized 4th quarter GDP estimates down to .8% from 1.5%. Nonetheless, analysts see a silver lining to the data. They always do.

Toys R Us Sales Decline 4.5%

MSN Money reports Gloomy Holiday Sales at Toys R Us

Toys R Us reported a key sales figure declined in November and December, hurt by weak demand for videogames, electronics and toys and shoppers who pulled back because of Superstorm Sandy.

“We believe our December sales were impacted by softness in the overall markets for videogames, electronics and toys, and by the uncertain economic environment in the U.S. and abroad,” said CEO Jerry Storch.

The privately held toy store owner said revenue from domestic stores open at least one year fell 4.5 percent in the U.S. in November and December combined. In December alone, that figure fell 1.8 percent. The company operates more than 800 namesake and Babies R Us stores in the U.S. and another 600-plus stores overseas.

Best Buy Sales Flat to Down

USA Today reports Best Buy sales flat or down during holidays

Struggling consumer electronics chain Best Buy said Friday that a key revenue metric declined during the critical holiday season.

But its flat performance in the U.S. was better than the past several quarters, and online revenue showed strong growth.

The chain said revenue at stores open at least a year fell 1.4% for the nine weeks ended Jan. 5. This figure is a key gauge of a retailer’s health because it excludes results from stores recently opened or closed.

The company’s U.S. performance was flat. While this was a hair below the 0.3% increase Best Buy reported in the prior-year period, President and CEO Hubert Joly said in a statement that it was an improvement over the past several quarters.

Revenue at stores open at least a year declined 6.4% internationally, stung by softness in China and Canada….



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Drones Over New York City?

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

In a world in which the NSA has access to everything, including – soon – one’s bank accounts, because “the government is there to protect you“, it was only a matter of time before the logical extension of abdicating all privacy was enforced in the city that never sleeps, and which ended up with 24/7 vigilant “alarm clocks” in the form of unmanned aerial vehicles, aka drones, “for the sake of security.” From RT: “The head of the New York City Police Department announced this week that the largest local law enforcement agency in the United States might soon rely on spy drones for conducting surveillance. During an open conversation held Thursday between Reuters editor-in-chief Stephen Adler and NYPD Commissioner Ray Kelly, the chief of police confirmed that New York’s boys in blue aren’t entirely opposed to acquiring an unmanned aerial vehicle for the sake of security. “We’re looking into it,” Kelly reportedly told an audience at the 92nd Street Y Thursday evening. “Anything that helps us.”

More:

Jill Colvin, a producer for the website DNAinfo, says Kelly told his crowd that adding an UAV to their arsenal of surveillance tools could come in handy during future mass protests in the Big Apple. For starters, she reports, Kelly said cops could begin with using basic civilian models that are available for purchase online and in stores.

 

“You can go to Brookstone and buy a drone,” Kelly told the crowd.

 

“The only thing we would do is maybe use the cheap $250 ones to take a look and see the size of the demonstration or something along those lines,” Colvin quotes him as saying.

Should New York City secure a drone of their own, there is little one could do that isn’t already possible in NYC. As of last year, the NYPD had access to around 2,000 surveillance cameras on just the island of Manhattan.

And maybe attach a few missiles (not sold at Brookstone just yet) to said drone, just in case a little additional militarized firepower was necessary in addition to looking and “seeing the size or something.”And why not: it’s not like there is a law in the US preventing the government for going all Ezekiel 25:17 on any…
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Guest Post: What Happens When China Goes “Gray”?

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by The Diplomat’s  Mark W. Frazier, Professor of Politics and Co-Academic Director of the India-China Institute at the New School

What Happens When China Goes “Gray”?

Developed economies are beginning to struggle with aging populations and more retirees. China may soon join them.

As China’s major trading partners try to control rising public pension and health care costs, they may not realize they also have an important stake in China’s ongoing struggle to fashion a safety net for its own rapidly aging population. Many observers assume China has no pensions or healthcare insurance for the 185 million people over the age of 60 (13.7% of population), the highest official retirement age for most workers. They may well believe this explains why Chinese families save so much–more than 30% of household income–and therefore spend less on consumer goods, including imports from trading partners.

But this line of reasoning is faulty because China already has large and rapidly growing public pension and health insurance programs in the cities, and is in the process of extending them to rural areas. It’s time that China’s trading partners, especially the United States, understand what this means for China’s economic future and, by extension, their own.

For all the criticism of outgoing President Hu Jintao for presiding over a “do-nothing” administration, he did manage to oversee a substantial increase spending on China’s public support systems.As a result, pensions have now become the most expensive function of the Chinese government—which already spends a lot on infrastructure, housing and defense. In 2011, pension expenditures rose to 1.28 trillion renminbi (RMB, U.S.$205 billion), up from only 489 billion RMB in 2006. These and civil service pensions cover only about half of those over age 60, but at current rates of growth universal coverage—and vastly higher expenditures—are not far off. The number of urban workers (including migrants from rural areas who in theory are in the cities temporarily) contributing to the public pension system now exceeds 290 million, while rural pensions are also growing rapidly. With so many new people paying in, the government’s future pension obligations are rising quickly. A recent report issued by the Bank of China and Deutsche Bank estimated that China’s pension system will have a U.S.$2.9 trillion gap between assets and liabilities by the…
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CEO of German Multinational: “The Costs Of The Monetary Are Union Too High”

Courtesy of ZeroHedge. View original post here.

Submitted by testosteronepit.

Wolf Richter   www.testosteronepit.com   www.amazon.com/author/wolfrichter

Bernd Scheifele, CEO of HeidelbergCement—one of the world’s largest producers of construction materials with nearly 55,000 employees at 2,500 locations in over 40 countries—lashed out against European politicians and their inability to bring budgets under control. But he reserved the most devastating judgment for the euro itself.

HeidelbergCement’s long history—it was founded in 1873—almost ended during the financial crisis. For more than 100 years, the company had expanded in Germany. But in 1977, it began to branch out internationally by acquiring Vicat in France and Lehigh Cement in the US. At the end of the 1980s, it invested heavily in Central and Eastern Europe, then moved via acquisitions into Northern Europe, Africa, and Asia—piling on debt as it went. The acquisition spree culminated in 2007, when it paid GBP 9.5 billion for Hansen plc., a British company with 26,000 employees. HeidelbergCement had become one of the world’s largest producers of cements and aggregates, the two key raw materials for concrete.

Then the financial crisis unfolded. Worldwide revenues dropped from €14.2 billion in 2008 to €11.1 billion in 2009, and net profits from €1.92 billion to €168 million. Staggering under nearly €12 billion in net debt, the company laid off 15,000 people. Shares plunged from €120 in May 2007 to €20 in early 2009. Credit became scarce. On the verge of bankruptcy, the company underwent some financial re-engineering that included a capital increase and the issuance of 62.5 million new shares.

It survived. By December 2011, revenues had recovered to €12.9 billion. Net profit approached €1 billion. Net debt had been reduced to €7.8 billion. And shares have more than doubled since their 2009 lows.

“The result of hard work, hard efforts to save money,” Scheifele told the FAZ. The crisis, “an absolutely exceptional situation,” had surprised him. Until then, he said, it was “hard to imagine” that sales would plunge “in almost all countries simultaneously.” But they did.

The entire industry had believed in the guiding principle that declines in one region of the world would be balanced out by growth in other regions. “That was suddenly obsolete,” he said. They’d done stress tests to determine how to react to revenue declines of 20%, but in the US, for example, “sales of cement collapsed within a few…
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Citi: “It Is Possible That We Will Get A Technical Default For A Few Days”

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

From Citi’s head of FX strategy, Steven Englander

No coin + temporary debt ceiling extension + sequester = USD negative

There was a an out-of-left-field idea that you could mint such a coin deposit it at the Fed and have a trillion dollars to spend. It was based on a very strained reading of some old legislation.  The Washington Post link shows just how strained the reading is

It really was a non-starter because it would have been risky from a legal viewpoint and financial markets would have priced in the risk that courts would have rejected it and the US would be close to default, not to mention the Fed looking rather Weimarian had they signed up for it.

The rejection of the trillion dollar coin should not put any pressure on financial markets or risk-correlated currencies on Monday

It may be viewed as political hardball by the White House, as there statement implies that they will not negotiate. WP quotes Press Secretary Carney  “there are only two options to deal with the debt limit: Congress can pay its bills or they can fail to act and put the nation into default.” This is a new reading since in 2011, they were busily negotiating with Congress (which is how the sequesters and temporary debt ceiling increase came into being.)

So it is possible that we will get a technical default for a few days, but more likely that Congress will give in, vote the debt ceiling up temporarily, and let the automatic sequesters kick in.

Mounting risk of a technical default was USD positive in 2011 because it led to cutting of long-risk positions and the USD/Treasury market remained safe havens.  However, it also occurred in an environemtn of slowing EM growth and intensifying euro zone soveregin risk pressure, so the USD support came from external forces as well. Given that investors are now somewhat long risk again, the position cutting is again likely to be USD positive, however, unattractive US assets were. As was the case in 2011, it is very unlikely that the Treasury will not pay its bills, although even a technical default could have very unforeseen consequences, given the multiple functions that Treasuries play in global financial markets.

The more likely scenario of sequester plus grudging debt ceiling
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The Real Interest Rate Risk: Annual US Debt Creation Now Amounts To 25% Of GDP Compared To 8.7% Pre-Crisis

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

By now most are aware of the various metrics exposing the unsustainability of US debt (which at 103% of GDP, it is well above the Reinhart-Rogoff “viability” threshold of 80%; and where a return to just 5% in blended interest means total debt/GDP would double in under a decade all else equal simply thanks to the “magic” of compounding), although there is one that captures perhaps best of all the sad predicament the US self-funding state (where debt is used to fund nearly half of total US spending) finds itself in. It comes from Zhang Monan, researcher at the China Macroeconomic Research Platform: “The US government is now trying to repay old debt by borrowing more; in 2010, average annual debt creation (including debt refinance) moved above $4 trillion, or almost one-quarter of GDP, compared to the pre-crisis average of 8.7% of GDP.

This is a key statistic most forget when they discuss the stock and flow of US debt: because whereas the total US deficit, and thus net debt issuance, is about $1 trillion per year, one has to factor that there is between $3 and $4 trillion in maturities each year, which have to be offset by a matched amount of gross issuance just to keep the stock of debt flat (pre deficit funding). The assumption is that demand for this gross issuance will always exist as old maturities are rolled into new debt, however, this assumption is contingent on one very key variable: interest rates not rising.

It is the question of what happens to this ~$4 trillion in annual debt creation by the US, as well as other key ones, that Monan attempts to answer in the following paper on what happens to the world if and when the moment when rates truly start rising, instead of just undergo another theatrical 2-4 week push higher only to plunge over fears the Fed may soon pull the punchbowl.

By Zhang Monan, published first in Project Syndicate

The Real Interest-Rate Risk

Since 2007, the financial crisis has pushed the world into an era of low, if not near-zero, interest rates and quantitative easing, as most developed countries seek to reduce debt pressure and perpetuate fragile payment cycles. But, despite talk of easy money as the “new normal,” there is…
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Goldman’s Hatzius: 10 Questions for 2013

Via Calculated Risk:

Some short excerpts from a research note by Goldman Sachs chief economist Jan Hatzius:

1.Will the 2013 tax hike tip the economy back into recession?

No. To be sure, it will likely deal a heavy blow to household finances, and we therefore expect consumer spending to be weak this year. …

2.Will growth pick up in the second half?

Yes. This forecast is based on the assumption that the drag from fiscal retrenchment—i.e., the ex ante reduction in the government deficit—diminishes in the second half of 2013 but the boost from the ex ante reduction in the private sector financialbalance remains large. In our forecast, this causes a pickup in real GDP growth to a 2½% annualized rate in 2013H2, and further to around 3% in 2014.

3.Will capital spending growth accelerate?

Yes. We expect a pickup from around zero in the second half of 2012 to about 6% in 2013 on a Q4/Q4 basis. This would contribute 0.6 percentage points to real GDP growth and offset most of the likely slowdown in consumer spending growth.

4.Will the housing market continue to recover?

Yes. The fundamentals for housing activity point to further large gains in the next couple of years.

Keep reading: Calculated Risk: Goldman's Hatzius: 10 Questions for 2013.





World Markets Weekend Review: A Mixed Bag

Courtesy of Doug Short.

The second weekly close for the eight world markets in my focus group was a mixed bag, with the average of the eight in the red (a modest -0.23%) for the first time since mid-November. This was a major deceleration from the previous Friday’s average gain of 2.75%. Japan’s Nikkei took the top spot with a 1.06% gain for the week, over double the gain of the second place spot, nabbed by the UK’s FTSE 100. The third-place S&P 500 was the only other index to finish with a gain. At the bottom of the stack was China’s Shanghai Composite, with a loss of 1.49% after five consecutive weekly gains.

And speaking of the Shanghai, even with a 14.5% rally since its interim low in early December, it remains the only index on the watch list in bear territory — the traditional designation for a 20% decline from an interim high. See the table inset (lower right) in the chart below. The index is still down 35.39% from its interim high of August 2009. At the other end of the inset, the FTSE has set an interim high and the S&P 500 is only seven basis points below its interim high set on Thursday.

As for the 2013 performances, here is a table highlighting the year-to-date gains, sorted in that order, and the 2013 interim highs for the eight indexes. As we can readily see, 2013 is off to a great start despite a relatively lackluster performance last week, thanks to a rally on steroids the previous week.

A Closer Look at the Last Four Weeks

The tables below provide a concise overview of performance comparisons over the past four weeks for these eight major indexes. I’ve also included the average for each week so that we can evaluate the performance of a specific index relative to the overall mean and better understand weekly volatility. The colors for each index name help us visualize the comparative performance over time.

The chart below illustrates the comparative performance of World Markets since March 9, 2009. The start date is arbitrary: The S&P 500, CAC 40 and BSE SENSEX hit their lows on March 9th, the Nikkei 225 on March 10th, the DAX on March 6th, the…
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Virtue, Vice and Banks

 

Source: sav3mys0ul.tumblr.com via Teresa on Pinterest

Virtue, Vice and Banks

Courtesy of Richard at Trust Your Instincts
In his Bloomberg editorial, the next Archbishop of Canterbury, Justin Welby, examines the need for recreating the banking system with structures that lean towards virtue rather than vice.

Regular readers know that the foundation for this structure is transparency as sunlight is the best disinfectant for vice and its related bad behaviors.

For banks, transparency takes the form of requiring disclosure on an ongoing basis of their current global asset, liability and off-balance sheet exposure details. 

This degree of disclosure is necessary so bankers cannot engage in bad behavior behind a veil of opacity.

Under pressure, everyone is prone to make bad decisions and that story remains in my mind as I sit on the U.K.’s Parliamentary Commission on Banking Standards, listening to people talk about banks, bankers and their failures. 

It is blindingly obvious that the banking system we had a few years ago has more or less collapsed. … Yet it is clear that responsibility needs to be taken and structures created that lean toward virtue rather than vice.

Our commission was set up in July to review the culture and standards of banking in the U.K. Its creation was a government response to the numerous scandals that had erupted, whether around the London interbank offered rate, money laundering or simply the continuing high remuneration of many people in the banking sector.

Please note


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Obama Furious He Wasted Week Posing for Coin

By Andy Borowitz

WASHINGTON (The Borowitz Report)—President Barack Obama was “totally furious” he spent a week of his time posing for a trillion-dollar platinum coin that would never be minted, a White House source confirmed today.

“The President is a super-busy man, so it’s understandable that he’d be mad,” the source said. “It’s not like he has time to sit still for hours on end for a coin that’s not going to happen.”

Mr. Obama devoted much of last week to posing for the trillion-dollar coin on the assurances of outgoing Treasury Secretary Timothy Geithner, who told Mr. Obama that the coin had “a way better than fifty percent chance” of being minted.

Based on Mr. Geithner’s advice, Mr. Obama carved hours out of his schedule to pose for the ill-fated coin, even cutting short meetings with world leaders such as Afghan President Hamid Karzai.

Keep reading: Obama Furious He Wasted Week Posing for Coin : The New Yorker.





 
 
 

Zero Hedge

Enemy Of The People?

Courtesy of ZeroHedge. View original post here.

Via The Zman blog,

There has never been a time when normal people did not know the media was biased and biased in a predictable direction. For every non-liberal in the media, there were at least ten liberals. The ratio was probably higher, but then, as now, some lefties liked to pretend they were independents or some third option.

The media used to invest a lot of time denying they had a bias and an agenda, but the only people who believed them were on the Left, which had the odd effect of confirming they had a bias and an agenda.

...



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Phil's Favorites

A 2019 Earnings Recession?

 

A 2019 Earnings Recession?

Courtesy of 

Shout to Leigh!

On the new Talk Your Book – Josh Brown is joined by Leigh Drogen of Estimize, one of the leading providers of crowdsourced financial and economic data to talk about the trend in corporate profits that could potentially lead to an earnings recession later this year.

What is the thing that Leigh is seeing in the data that Wall Street isn’t yet picking up on? What segment of the stock market is most at risk? Why is the crowd smarter than the narrow consensus of Wall Street analysts?

Check out Estimize ...



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ValueWalk

D.E. Shaw Investment Calls For Leadership Change At EQT

By ActivistInsight. Originally published at ValueWalk.

Elliott Management has offered to acquire QEP Resources for approximately $2.1 billion, contending the oil and gas explorer’s turnaround efforts have done little to lift the company’s share price. The company responded and said that a thorough review of the proposition is imperative in order to properly act in the best interests of shareholders, “taking into account the company’s other alternatives and current market conditions.” The news came only a month after Travelport Worldwide agreed to sell itself to Siris Capital Group and Elliott’s private equity arm Evergreen Coast Capital for $4.4 billion in cash and two months after Athenahealth was bought by Veritas and Evergreen for $5.7 bi...



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Kimble Charting Solutions

Gold & Silver Testing Important Breakout Levels!

Courtesy of Chris Kimble.

Gold and Silver from a long-term perspective have created a series of lower highs over the past 8-years. Will 2019 bring a change to this trend? A big test is in play!

Gold since the lows in 2016 has created a series of higher lows, while Silver may have created a double bottom.

Gold & Silver are currently facing break attempts a (1) and (2). These falling resistance lines have disappointed metals bulls for the past few years.

The direction of Gold and Silver weeks and months from now should be highly influenced by what each does as they are attempting to break above important resistance levels.

To become a member of Kimbl...



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Insider Scoop

UBS Says Disney's Streaming Ambition Gives It A 'New Hope'

Courtesy of Benzinga.

Related DIS Despite Some Risks, Analysts Still Expecting Double Digit Growth From Communications Services In Q4 ...

http://www.insidercow.com/ more from Insider

Digital Currencies

Russia Prepares To Buy Up To $10 Billion In Bitcoin To Evade US Sanctions

Courtesy of Zero Hedge

While the market has been increasingly focused on the rising headwinds in the global economy in general, and China's economic slowdown in particular, while the media is obsessing over daily revelations that Trump may or may not have colluded with Russia to get elected, a far more critical, if underreported, shift has been taking place over the past year.

As we reported in June, whether due to concerns over draconian western sanctions and asset confiscations following the poisoning of former Russian military officer Sergei Skripal, or simply because it wanted to diversify away from the dollar, Russia liquidated virtually all of its Treasury holdings in the late spri...



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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 failure based on his personality, which was evident years ago. This article, written in 2017, references a prescient article Bill wrote before Trump became president, in July, 2016, 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

Free eBook - "My Top Strategies for 2017"

 

 

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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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