Archive for 2015

Swing trading portfolio – week of August 17th 2015

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

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Travails Of Empire – Oil, Debt, Gold & The Imperial Dollar

Courtesy of Jesse's Cafe Americain

"We are imperial, and we are in decline… People are losing confidence in the Empire."

This is the key theme of Larry Wilkerson's presentation.  He never really questions whether empire is good or bad, sustainable or not, and at what costs.  At least he does not so in the same manner as that great analyst of empire Chalmers Johnson.

It is important to understand what people who are in and near positions of power are thinking if you wish to understand what they are doing, and what they are likely to do.  What ought to be done is another matter.

Wilkerson is a Republican establishment insider who has served for many years in the military and the State Department. Here he is giving about a 40 minute presentation to the Centre For International Governance in Canada in 2014.

I find his point of view of things interesting and revealing, even on those points where I may not agree with his perspective.  There also seem to be some internal inconsistencies in this thinking.

But what makes his perspective important is that it represents a mainstream view of many professional politicians and 'the Establishment' in America. Not the hard right of the Republican party, but much of what constitutes the recurring political establishment of the US.

As I have discussed here before, I do not particularly care so much if a trading indicator has a fundamental basis in reality, as long as enough people believe in and act on it. Then it is worth watching as self-fulfilling prophecy.  And the same can be said of political and economic memes.

At minute 48:00 Wilkerson gives a response to a question about the growing US debt and of the role of the petrodollar in the Empire, and the efforts by others to 'undermine it' by replacing it. This is his 'greatest fear.'

He speaks about 'a principal advisor to the CIA Futures project' and the National Intelligence Council (NIC), whose views and veracity of claims are being examined closely by sophisticated assets. He believes that both Beijing and Moscow are complicit in an attempt to weaken the dollar.

This includes the observation that "gold is being moved in…
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Asian Currency Crisis Continues As China Holds, Malaysia Folds, & Japan Heads For Quintuple Dip Recession

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Asia got off to an inauspicious start this evening with Japan printing a disappointing 1.6% drop in GDP – heading for its fifth recession in 6 years… so much for Abenomics, but, of course, Amari spewed forth some standard propaganda that he expects Japan to recover moderately (and Japanese stocks popped modestly assuming moar QQE). Then Malaysia continued its collapse with the Ringgit down another 1% hitting fresh 17-year lows and stocks dropping further, as the Asian Currency crisis continues. Heading into the China open, offshore Yuan signaled further devaluation but the CNY Fix printed very modestly stronger at 6.3969; and following last week's best gains in 2 months, Chinese stocks are plunging at the open after Chinese farmers extend their streak of margin debt increases. Finally, WTI Crude drifted back to a $41 handle in early futures trading.

Asian Contagion…

Japan heads for Quintuple Dip recession…

The Asian currency crisis continues (led by Malaysia)

  • *MALAYSIAN RINGGIT DROPS 0.9% TO 4.1155 PER DOLLAR
  • *MALAYSIA'S KEY STOCK INDEX OPENS DOWN 0.4% AT 1,590.81

But broad-based USD strength against Asian FX continues…

Then China opened..

Great news – Chinese farmers and grandmas are releveraging!!

  • *SHANGHAI MARGIN DEBT HAS LONGEST STREAK OF RISE IN TWO MONTHS

Seriously!

And Chinese futures appeared to mini-flash-crash…

As China revalues modestly..

  • *CHINA SETS YUAN REFERENCE RATE AT 6.3969 AGAINST U.S. DOLLAR (against 6.3975 fix Friday)
  • *PBOC'S YUAN REFERENCE RATE SET WITHIN 0.1% OF FRIDAY'S CLOSE

Offshore Yuan leaking weaker…

And finally WTI Crude continues to drift lower… once again trading with a $41 handle…

So while China may have succeeded in jawboning/intervening the yuan back to some semblance of (temporary) stability, the global reverberations look to have just begun.

Charts: Bloomberg





Goldman Weighs In On America’s Pension Ponzi: Contributions Must Rise $100 Billion Per Year

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Over the past several months, we’ve taken a keen interest in the deteriorating condition of state and local government finances in America. 

Moody’s move to downgrade the city of Chicago to junk in May put fiscal mismanagement in the national spotlight and indeed, the Illinois Supreme Court ruling that triggered the downgrade (in combination with a subsequent ruling by a Cook County court which struck down a bid to reform the city’s pensions), effectively set a precedent for other states and localities, meaning that now, solving the growing underfunded pension liability problem will be that much more difficult. 

Just how big of a problem is this you ask? Well, pretty big, according to Moody’s which, as we noted last month, contends that the largest 25 public pensions are underfunded by some $2 trillion

It’s against that backdrop that we present the following graphic and color from Goldman which together demonstrate the amount by which state and local governments would need to raise contributions to “bring plans into balance over time.”

From Goldman:

Unfunded pension liabilities have grown substantially. There are several factors behind this, led by lower than expected investment returns and insufficient contributions from state and local governments to the plans. The two issues are related. The assumed investment return is used as a discount rate to determine the present value of liabilities. The higher the discount rate, the lower the estimated liability, and the lower the periodic payment into the fund a state or local employer is expected to make. There is, of course, no clear answer about what the discount rate ought to be, though the fact that the average assumption used by private plans has continuously declined for more than a decade suggests that the rates have probably been too high and that the current average assumption of 7.7% may come down further.

Contributions have also generally been lower than necessary to stabilize or reduce unfunded liabilities because of the rules around how those unfunded liabilities are amortized. Payments into pension plans are generally meant to account for the future cost of benefits accrued during the current year, as well as catch-up payments equal to some fraction of the unfunded liability left from prior years. Many plans target payment amounts that would work off this underfunding over


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How Humans Cause Mass Extinctions

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Authored by Paul and Anne Ehrlich, originally posted at Project Syndicate,

There is no doubt that Earth is undergoing the sixth mass extinction in its history – the first since the cataclysm that wiped out the dinosaurs some 65 million years ago. According to one recent study, species are going extinct between ten and several thousand times faster than they did during stable periods in the planet’s history, and populations within species are vanishing hundreds or thousands of times faster than that. By one estimate, Earth has lost half of its wildlife during the past 40 years. There is also no doubt about the cause: We are it.

We are in the process of killing off our only known companions in the universe, many of them beautiful and all of them intricate and interesting. This is a tragedy, even for those who may not care about the loss of wildlife. The species that are so rapidly disappearing provide human beings with indispensable ecosystem services: regulating the climate, maintaining soil fertility, pollinating crops and defending them from pests, filtering fresh water, and supplying food.

The cause of this great acceleration in the loss of the planet’s biodiversity is clear: rapidly expanding human activity, driven by worsening overpopulation and increasing per capita consumption. We are destroying habitats to make way for farms, pastures, roads, and cities. Our pollution is disrupting the climate and poisoning the land, water, and air. We are transporting invasive organisms around the globe and overharvesting commercially or nutritionally valuable plants and animals.

The more people there are, the more of Earth’s productive resources must be mobilized to support them. More people means more wild land must be put under the plow or converted to urban infrastructure to support sprawling cities like Manila, Chengdu, New Delhi, and San Jose. More people means greater demand for fossil fuels, which means more greenhouse gases flowing into the atmosphere, perhaps the single greatest extinction threat of all. Meanwhile, more of Canada needs to be destroyed to extract low-grade petroleum from oil sands and more of the United States needs to be fracked.

More people also means the production of more computers and more mobile phones, along with more mining operations for the rare earths needed to make them. It means more pesticides, detergents, antibiotics, glues, lubricants, preservatives,…
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The Dumb Money Is Doing Something Smart

Courtesy of John Rubino.

At the peak of bull markets, when stock prices have been rising long enough for people who just recently started paying attention to conclude that they always go up — that’s when retail investors traditionally go all-in to snag some of that apparently easy Dow Jones money. That’s also when markets tend to peak and then roll over, once again transferring a sizable chunk of societal wealth from late-to-the-party “dumb money” investors to the pros who have been here before and recognize a peak when they see one.

So it’s interesting to hear that retail investors are departing from the script in 2015. Instead of piling in at the very top, they’ve greeted year six of this steady, robust bull market with a financial slap in the face, withdrawing near-record amounts of money from US equity funds:

Money flees US stocks at highest level since 1993

(CNBC) – The flight of investor money from U.S. stocks has turned into a stampede.

In fact, the $78.7 billion leaving domestic equity-focused funds has been worse in 2015 than it was even during the financial crisis years, when the S&P 500 tumbled some 60 percent, according to data released Friday by Morningstar. The total is the highest since 1993.

Domestic equity funds surrendered $20.4 billion in July alone and have seen $158.6 billion in redemptions over the past 12 months. Even a strong flow of money into passively managed exchange-traded funds has been unable to offset the stream to the exit among retail investors, who generally focus more on mutual funds than ETFs.

The move is all the more unusual considering that it hasn’t been a bad year for the market. The S&P 500 has gained about 1.5 percent year to date and 3.4 percent in total return, though it’s lagged other indexes, particularly those that focus on international stocks. The MSCI-EAFE international benchmark, for instance, is up 4 percent in price and nearly 7 percent in total return.

“Apart from flows following performance, this pattern also hints at investors’ expectations for the future,” Morningstar senior analyst Alina Lamy said in a report. “The consensus is that the United States is in the late stages of its bull market.


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Bouts Of Extreme Volatility Have “Little Obvious Explanation,” Citi Warns

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Don’t get us wrong, we’re happy that the entire world has finally woken up to the fact that liquidity is rapidly disappearing from every corner of global capital markets. Indeed, the wholesale adoption of the illiquidity meme serves as a ringing endorsement of the arguments we’ve been making in these very pages for years. 

And while we’ve grown accustomed to seeing tin foil hat conspiracy theories gradually metamorphose into undeniable conspiracy facts (much to the chagrin of the begrudging pundit echo chamber), the degree to which everyone from the mainstream financial news media to the C-suite is suddenly screaming about illiquid credit markets has surprised even us.

And while it’s not always clear that everyone talking about illiquid markets completely understands what it is they’re saying, they’ve undeniably picked up on the fact that somewhere deep inside the secondary market for govies and corporate credit, something sinister is amiss and they can’t afford to be the only ones not talking about it.  

Having said all of that, one of the few people who, like us, began documenting the disappearance of liquidity long ago and who is generally quite adept when it comes to illustrating the problem is Citi’s Matt King, and for anyone still confused as to what exactly we mean when we discuss the admittedly amorphous concept of “liquidity”, we present the following graphics from King’s latest missive by way of explanation.

And here is what it looks like when liquidity dries up…





Goldman’s 4 Reasons Why The S&P Will Remain Unchanged For The Rest Of 2015

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Anyone expecting a surge in market volatility as Mario Draghi recently warned, will be disappointed to read Goldman’s latest forecast which not only does not budge on its year end S&P forecast of 2100, but predicts that the market will be flat as a pancake for the balance of the year.

Here is Goldman’s assessment of why one may as well take the rest of the year off:

The most likely path of the US stock market during the next six months is sideways. We forecast the S&P 500 index will end 2015 at 2100, roughly unchanged from the current level. S&P 500 delivered a compound annual price return of 18% during the past three years and 13% during the past five years, both well above the long-term average annual return of 5%. Mean reversion is a powerful force. Put simply, “flat is the new up” when it comes to the future path of the US stock market.

And here are Goldman’s four reasons why the bank expects the S&P 500 will end 2015 unchanged from the current level: High starting valuation, negligible earnings growth, outflow from domestic equity mutual funds and ETFs, and modest economic growth. Offsetting these headwinds to a higher market, buybacks remain robust and serve as a pillar of support in the current environment.

Finally, Goldman adds that its “sentiment indicator stands at 0, implying a tactical rally is likely during the next month.” So… expect a plunge?

Here are the four reasons with more detail:

1. At 2100, S&P 500 currently trades around fair value based on a range of financial metrics (P/E, EV/sales, EV/EBITDA, and P/B). During prior periods when real interest rates were 0%-1%, the forward P/E multiple averaged 11.2x, 33% below the current P/E of 16.7x. The Fed Model implies a year-end fair value of 2100 assuming the 10-year US Treasury yield climbs to 2.8% and the earnings yield gap narrows/equity risk premium falls and P/E remains at 16.7x. Note that our target would remain 2100 if interest rates remain unchanged from today’s level and the yield gap also remained constant. In prior tightening episodes, the P/E multiple has contracted by an average of 8% during the first three months following an initial Fed hike.

2. S&P 500 earnings will be essentially flat


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“Deal Or War”: Is Doomed Dollar Really Behind Obama’s Iran Warning?

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Authored Op-Ed by Finian Cunningham via RT.com,

US President Barack Obama has given an extraordinary ultimatum to the Republican-controlled Congress, arguing that they must not block the nuclear accord with Iran. It’s either “deal or war,” he says.

In a televised nationwide address on August 5, Obama said: “Congressional rejection of this deal leaves any US administration that is absolutely committed to preventing Iran from getting a nuclear weapon with one option: another war in the Middle East. I say this not to be provocative. I am stating a fact.”

The American Congress is due to vote on whether to accept the Joint Comprehensive Plan of Action signed July 14 between Iran and the P5+1 group of world powers – the US, Britain, France, Germany, Russia and China. Republicans are openly vowing to reject the JCPOA, along with hawkish Democrats such as Senator Chuck Schumer. Opposition within the Congress may even be enough to override a presidential veto to push through the nuclear accord.

In his drastic prediction of war, one might assume that Obama is referring to Israel launching a preemptive military strike on Iran with the backing of US Republicans. Or that he is insinuating that Iran will walk from self-imposed restraints on its nuclear program to build a bomb, thus triggering a war.

But what could really be behind Obama’s dire warning of “deal or war” is another scenario – the collapse of the US dollar, and with that the implosion of the US economy.

That scenario was hinted at this week by US Secretary of State John Kerry. Speaking in New York on August 11, Kerry made the candid admission that failure to seal the nuclear deal could result in the US dollar losing its status as the top international reserve currency.

“If we turn around and nix the deal and then tell [US allies], ‘You're going to have to obey our rules and sanctions anyway,’ that is a recipe, very quickly for the American dollar to cease to be the reserve currency of the world.”

In other words, what really concerns the Obama administration is that the sanctions regime it has crafted on Iran – and has compelled other nations to abide by over the past decade – will be finished. And Iran will be open for business with the European Union,…
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Hillary’s ‘Big Crowds’

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Maybe not all publicity is good publicity….

Source: Cagle.com





 
 
 

ValueWalk

#1 Performing Global Macro Hedge Fund Sees More Shorts Opportunities Ahead As China Bursts

By Jacob Wolinsky. Originally published at ValueWalk.

Crescat Global Macro Fund update to investors on 1/19/2019

Crescat Global Macro Fund and Crescat Long/Short fund delivered strong returns for both December and full year 2018 in a difficult market. Based on ...



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Zero Hedge

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

Courtesy of ZeroHedge. View original post here.

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

Several doctors from Hopkins an...



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Phil's Favorites

Divisive economics

 

Guest author David Brin — scientist, technology consultant, best-selling author and futurist — explores the records of Democrats and Republicans on the US economy in the following post. For David's latest posts, visit the CONTRARY BRIN blog. For his books and short stories, visit his web...



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Kimble Charting Solutions

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

Courtesy of Chris Kimble.

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

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

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

If you find long-term perspectives helpf...



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Digital Currencies

Transparency and privacy: Empowering people through blockchain

 

Transparency and privacy: Empowering people through blockchain

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

Courtesy of Ajay Kumar Shrestha, University of Saskatchewan

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

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



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Insider Scoop

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

Courtesy of Benzinga.

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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 chaotic presidency based on his high-conflict personality, which was evident years ago. This post, written in 2017, references a prescient article Bill wrote before Trump even became president, 5 Reasons Trump Can’t Learn. ~ Ilene 

Why Trump Can’t Learn

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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

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OpTrader

Swing trading portfolio - week of September 11th, 2017

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

 

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

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

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

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



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Promotions

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

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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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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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