Archive for April, 2016

News You Can Use From Phil’s Stock World

 

Financial Markets and Economy

Buffett Says Bonds Unattractive, If Not Terrible for Reinsurers (Bloomberg)

Warren Buffett, who built Berkshire Hathaway Inc. by reinvesting premiums from insurance units, said low bond yields have hurt the prospects of that strategy.

A Leak Wounded This Company. Fighting the Feds Finished It Off (Bloomberg)

The first phone call that changed Michael Daugherty’s life came in May 2008. Daugherty was a happy man, running a good business in a nice place. That’s how he talks about it, like the opening five minutes of a movie, setting up how great everything is before disaster strikes. His Atlanta-based company, LabMD, tested blood, urine, and tissue samples for urologists, and had about 30 employees and $4 million in annual sales.

The market's most crowded trades could be causing dangerous bubbles (Business Insider)

The market may be blowing up some bubbles through excessive crowding.

Screen Shot 2016 04 29 at 3.35.09 PM

In an Age of Privilege, Not Everyone Is in the Same Boat (NY Times)

Behind a locked door aboard Norwegian Cruise Line’s newest ship is a world most of the vessel’s 4,200 passengers will never see. And that is exactly the point.

In the Haven, as this ship within a ship is called, about 275 elite guests enjoy not only a concierge and 24-hour butler service, but also a private pool, sun deck and restaurant, creating an oasis free from the crowds elsewhere on the Norwegian Escape.

Wall Street not rewarding low-expectation earnings beats (Market Watch)

Earnings beats this season have been cheapened, with lower-than-usual expectations making for little fanfare with investors when companies top the Wall Street consensus.

IBM is jumping in on the hottest trend in enterprise tech—blockchain.IBM is betting big on blockchain (Quartz)

Large businesses (especially those in financial services) have been trying to figure out how they can tap into the blockchain, the technology underpinning the bitcoin cryptocurrency. They’re intrigued by the possibilities of a transparent and cheap ledger system capable of creating an immutable record of transactions


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ZeroHedge – What Was Bloomberg Thinking?

By Jacob Wolinsky. Originally published at ValueWalk.

I was away on a rare vacation over the past two weeks in Orlando and am just catching up on hundreds of emails, and hours and hours of work. While I was gone there was a lot of news but one item caught my attention – it was the Bloomberg News profile of ZeroHedge.  I am up late, and rarely write pieces these days but wanted to address this article since I think the topic is important.

Our editor wrote a piece on the topic (which I had no involvement with) last week but I feel I need to delve further into this. I hope this makes sense as I am multitasking, and up late while writing this. For the record, I know both Colin Lokey and ZeroHedge but I do not plan to get into specifics (although there are very few facts in the article – the ones which are true- with which I am not familiar with already), but I wrote this piece without speaking to them. Additionally, I am familiar with both Luke Kawa and Tracy Alloway of Bloomberg News and although I do not know them personally I think highly of their work.

I want to ignore the content of the debate, and mostly address the question – although Josh Brown of The Reformed Broker has an excellent piece on that topic which I completely agree with – what was Bloomberg News thinking? Specifically, why did Bloomberg run this piece?

Zerohedge

Zerohedge

I do not understand the goal, but I assume because it is an interesting topic, and they want traffic.

More importantly, was this good journalism?

Bloomberg News is my favorite site for financial news, and I think highly of both journalists but think this piece should never have been published. Basing an article on a single self-admitted disgruntled source who has psychological issues is a no-no even for ValueWalk and I expect far more from Bloomberg News with much more resources, time, and money.

I will give one example – once an ex-employee involved in a multi-million lawsuit with a large hedge fund was passing us info on the fund. One day he gave us an exclusive the hedge fund was about to announce big news. We asked for proof and he provided that proof in the…
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MaY DaY MaY DaY MaY DaY…2016

Courtesy of ZeroHedge. View original post here.

Submitted by williambanzai7.




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PUTTNIK





State-Sanctioned Theft – The Failed War On Drugs And Cops’ Abuse Of Civil Forfeiture

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Lorelei McFly via CopBlock.org,

One of the biggest lies our government tells us is that it wages the War on Drugs to keep us safe. More than 40 years after it was started, we know that it has been a colossally-expensive epic failure on its stated goals, was intentionally designed to further disenfranchise marginalized groups, and has become a full-fledged assault on our civil liberties.

Even with all the billions of tax dollars it spends each year, and all the flashy photo ops of seized drugs stacked on tables, the Drug Enforcement Agency only stops 1% of the illegal drug supply from being distributed in America, according to the video below. Not only is law enforcement pathetically inept at stemming the flow of drugs, they are active participants in the illicit drug trade at both the federal and local level:

That drug prohibition causes far more harm than it supposedly prevents would not even be a question of debate were it not for the fact that so many people’s livelihoods now depend on waging it. The ugly unspoken truth is that the War on Drugs is a massive jobs and funding program for law enforcement that is operated under the guise of saving people from the evils of substance abuse.

State-Sanctioned Theft

Everything we do is suspect, and everything we own is subject to seizure— take cash for an example. The saying used to be that “cash is king,’ however these days it’s “cash is criminal” since cash transactions and even withdrawing or carrying “large amounts,” basically more than a few dollars, of your own money is now considered an indication of criminal activity (see here).  Section 31 U.S.C. 5103
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First Majastic Silver Wyckoff Friendly

Courtesy of Read the Ticker.

first-majastic-silver-wyckoff-friendlySometimes is just works! Wyckoff logic is excellent when all the evidence supports your view.



The traditional Wyckoff logic traders will see the Wyckoff accumulation in this stock. Notice the NetVolume divergence with price, very telling. Point and Figure chart showing off an excellent ‘CAUSE’, that exploded into a fantastic ‘EFFECT’. Some times winning is just too easy!





Click for popup. Clear your browser cache if image is not showing.

AG Monthly




PnF Chart, love the ‘CAUSE’ that was the base for the ‘EFFECT’



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AG  PNF




NOTE: readtheticker.com does allow users to load objects and text on charts, however some annotations are by a free third party image tool named Paint.net



Investing Quote…



..”Don’t take action with a trade until the market, itself, confirms your opinion. Being a little late in a trade is insurance that your opinion is correct. In other words, don’t be an impatient trader”…



Jesse Livermore





..”It’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much you lose when you’re wrong”..



George Soros







Unless you can watch your stock holding decline by 50 per cent without becoming panic stricken, you should not be in the stock market.



Warren Buffett





..”Wall Street is the only place that people ride to in a Rolls Royce to get advice from those who take the subway”..



Warren Buffett





..“Investing should be like watching paint dry or watching grass grow. If you want excitement…go to Las Vegas.”…



Paul Samuelson











Visualizing The Market Cycle

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Is it possible to time the market cycle to capture big gains?

Like many controversial topics in investing, there is no real professional consensus on market timing. Academics claim that it’s not possible, while traders and chartists swear by the idea.

That said, as VisualCapitalist’s Jeff Desjardins notes, one thing that everyone can probably agree on is that markets are cyclical and that securities do have recurring chart patterns. They aren’t predictable all of the time, but learning the fundamentals around market cycles can only help an investor in furthering their understanding of how things work.

The following infographic explains the four important phases of market trends, based on the methodology of the famous stock market authority Richard Wyckoff. The theory is: the better an investor can identify these phases of the market cycle, the more profits can be made on the ride upwards of a buying opportunity.

Courtesy of: Visual Capitalist

Here are the descriptions of each major phase of the market cycle:

Accumulation: Occurs after a drop in prices. Process of buyers gaining control from sellers which leads to markup.

Markup: Bullish phase of a stock’s life is defined by higher highs and higher lows. This is where you want to get long on breakouts and after short-term pullbacks. Rallies are “innocent until proven guilty”.

Distribution: Occurs after a prolonged price advance. Sellers gain control of prices, which leads to decline.

Decline: Bearish phase of a stock’s life. This is where you want to be short, so look to sell short fresh breakdowns after minor rallies have exhausted themselves. Rally attempts are “guilty until proven innocent”.

The basic strategy is to pay close attention during the accumulation and distribution phases as the market shifts from buyers to sellers, or vice versa. Then, by recognizing the markup and decline phases, an investor can be appropriately long or short to make solid returns.

Original graphic by: AlphaTrends





Indiana Hail Mary Pass Coming Up

Courtesy of Mish.

The last possible chance for Ted Cruz to stop Donald Trump is the May 3 primary in Indiana.

Cruz is pulling out all the stops, but even if Cruz wins Indiana, he may still be too late.

The Wall Street Journal reports Ted Cruz Makes His Last Stand in Indiana.

Sen. Ted Cruz, in a last-ditch effort to derail Republican presidential front-runner Donald Trump, is trying to marshal support from governors, former rivals and other anti-Trump Republicans in advance of the make-or-break primary in Indiana Tuesday.

With polls showing him lagging behind the New York businessman in the Hoosier state, the Texas senator talked up the somewhat equivocal support he received from Indiana Gov. Mike Pence on Friday.

Mr. Pence said on an Indianapolis talk-radio show that he would vote for Mr. Cruz because he is “a principled conservative who has dedicated his career to advocating the Reagan agenda.” But then, Mr. Pence added, “I particularly want to commend Donald Trump, who I think has given voice to the frustration of millions of working Americans.”

Earlier this week, Mr. Cruz tried to coordinate strategy with his other remaining GOP presidential rival, Ohio Gov. John Kasich, and took the extraordinary step of naming Carly Fiorina as his running mate a day after he lost to Mr. Trump by a landslide in primaries in five Northeastern states on Tuesday.

Meanwhile, Mr. Cruz’s onetime rival, former Florida Gov. Jeb Bush, this week repeated his call for Republicans to vote for Mr. Cruz.

To some Republicans, it was a week that amounted to a series of Hail Mary passes by a candidate running out of time. “Cruz is so desperate that he is throwing everything—including the kitchen sink and the Indiana Old Oaken Bucket—at Trump,” said Rick Hohlt, a GOP fundraiser who is moving toward supporting Mr. Trump, referring to a college football trophy.

Indiana Polls

Indiana polls 2016-04-30

Only the earliest poll that Has Cruz winning, and by an amazing percentage. It’s safe to discard that poll as complete nonsense.

Nate Silver did essentially that as noted by the weighting at 0.15.

The most recent poll has Trump as a 9 point favorite. Curiously, Nate Silver reduced Trump’s odds of winning following that poll.


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Deutsche Bank Unveils The Next Step: “QE Has Run Its Course, It’s Time To Tax Wealth”

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Helicopter money may be on the horizon, but if Deutsche Bank has its way, there is at least one intermediate step.

According to DB’s Dominic Konstam, now that the benefits QE “have run their course”, it is time for the next, and far more drastic step: “the ECB and BoJ should move more strongly toward penalizing savings via negative retail deposit rates or perhaps wealth taxes. With this stick would also come a carrot – for example, negative mortgage rates.”

Here is the big picture unveiling of what is coming next from Deutsche Bank’s Dominic Konstam, who is also buying the Treasury long end hand over fist:

  • The G3 central banks all stood pat, continuing the move away from the beggar-thy-neighbor paradigm. However, the adverse market reaction to the BoJ’s inaction suggests that the benefits of QE (or QQE) in its present form might have run their course.
  • It is becoming increasingly clear to us that the level of yields at which credit expansion in Europe and Japan will pick up in earnest is probably negative, and substantially so. Therefore, the ECB and BoJ should move more strongly toward penalizing savings via negative retail deposit rates or perhaps wealth taxes. With this stick would also come a carrot – for example, negative mortgage rates.
  • Until then, bank NIM compression will continue to drive elevated demand for dollar-denominated assets, which manifests itself in suppressed UST term premia and wide cross-currency bases.
  • What this means for the US is that policy rates and longer bond yields are unlikely to go up until global growth accelerates materially. Until such time, it is critical for the Fed to continue to relent, allowing real yields to keep falling while breakevens rise and nominal yields remain roughly static.
  • If the Fed were to turn hawkish, there is perhaps even less scope for long-end yields to rise as breakevens would likely collapse on policy error fears.

Some of the troubling detail:

QE as implemented in major economies since the crisis has operated through two shocks: a demand shock whereby real yields are forced lower through lower nominal yields and static – or even falling – breakevens, and a shock to inflation expectations, whereby real yields ultimately continue to fall but due to rising BEI and


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Young Bulls And Old Bears

 

Young Bulls And Old Bears

Courtesy of , The Irrelevant Investor

“Two things have always been true about human beings. One, the world is always getting better. Two, the people living at that time think it’s getting worse” – Penn Jillette

What do Bill Gross, Sam Zell, Jeremy Grantham and Carl Icahn have in common? They’re all old, they’ve all had brilliant careers, and they’re all bearish on the stock market.

Whether it be in music or in stocks, the prior generation never thinks “kids” will ever measure up. Even Benjamin Graham- the man who basically invented value investing- fell victim to the “get off my lawn syndrome.”

From Roger Lowenstein’s Buffett: The Making of an American Capitalist. 

I am no longer an advocate of elaborate techniques of security analysis in order to find superior value opportunities. This was a rewarding activity, say, 40 years ago, when our textbook “Graham & Dodd” was first published; but the situation has changed.

Young bulls and old bears is as old as the hills. In Ten Years In Wall Street, which was published in 1870, William Worthington Fowler wrote “Wall Street operators commence their career as bulls, and finish it as bears.”

It’s tough to pin down the root cause of this metamorphosis, but get used to it. The old man screaming “the world is going to end” has always been here and he always will be.

Via Pixabay.





China Takes Drastic Measures To Save The Regime

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by George Friedman via MauldinEconomics.com,

Chinese President Xi Jinping recently announced that he would take command of all of China’s armed forces, including the People’s Liberation Army (PLA).

Xi is already chairman of the Central Military Commission that oversees the army. He is now taking a more direct role as head of the new Joint Operations Command Center, which puts him in operational command of the PLA in times of war.

The new title in all likelihood means little in terms of actual command, but it has tremendous political significance. Officially, the Chinese are reforming their military, which is logical (read why here). The roots of this change, however, lie in China’s economic crisis and the need to preserve the regime.

The regime no longer delivers on its promises

Mao Zedong founded China as a moral project: to create a country ruled by communism. After Mao’s death, the project was replaced by another: to modernize the Chinese economy and create prosperity. 

The leadership in the new regime rotated in an orderly fashion, and government after government oversaw the generation of increasing wealth.
Mao justified the regime as a dream (or nightmare, depending on how you view Maoism), while his successors promised prosperity, and they delivered. 

Until now…

There is occasional talk that China will somehow return to a period of rapid growth and increasing wealth. But the vast outflow of money (some in the hands of private individuals, some taken from government coffers and informally privatized) is the short explanation for why China has reached a new normal

If the rule is “follow the insiders,” the insiders are saying that getting money out of China is a priority. The story is more complex, of course. If a regime justifies itself by delivering prosperity, and it stops delivering, the regime is in trouble.

China’s problem can no longer be considered primarily economic. That train has left. The economic reality is locked in and will remain in place for a long time. 

China is now in the throes of a political challenge

The coastal region will grow at a much slower rate than before, if at all. People who came from the interior for jobs will have to return to the interior. 

The interior—a vast and impoverished…
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Zero Hedge

Explosion Hits Russia's Largest Virus Lab Which Houses Plague, Smallpox, Ebola And Other Deadly Viruses

Courtesy of ZeroHedge View original post here.

A sudden explosion at a Siberian virus research center on Monday reportedly left the facility engulfed in flames, according to several Russian news outlets. 

Firefighters and other emergency personnel were dispatched to the "Vector Institute" located several miles from Novosibirsk - an emergency which was upgraded "from an ordinary emergency to a major incident," a...



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Phil's Favorites

The future of work will still include plenty of jobs

 

The future of work will still include plenty of jobs

Even though the future is unknown, Canada’s employment rate has risen steadily from 53 per cent in 1946 to more than 61 per cent today. (Shutterstock)

Courtesy of Wayne Simpson, University of Manitoba

There is now widespread anxiety over the future of work, often accompanied by calls for a basic income to protect those displaced by automation and other technological changes.

As a labour economis...



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Lee's Free Thinking

Is The Drone Strike a Black Swan?

Courtesy of Lee Adler

Pundits are calling yesterday’s drone strke a “black swan.” Can a drone strike on a Saudi oil facility, be a “black swan.”

According to Investopedia:

A black swan is an unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences. Black swan events are characterized by their extreme rarity, their severe impact, and the practice of explaining widespread failure to predict them as simple folly in hindsight.

I seriously doubt that no one expected or could have predicted a drone strike on a Saudi oil facility.

Call Me A B...

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Insider Scoop

New Relic Cuts 2020 Sales Guidance, Announces Changes In Management

Courtesy of Benzinga

New Relic (NYSE: NEWR) has reaffirmed its second-quarter guidance and cut its sales guidance for fiscal year 2020 from $600 million-$607 million to $586 million-$593 million.

The company’s chief technology officer, Jim Gochee, and chief revenue officer, Erica Schultz, have resigned. New Relic also named board member Michael Christenson as its chief operating officer. Christenson joins from his ...



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The Technical Traders

Metals are following downside sell off prediction before the next rally

Courtesy of Technical Traders

It is absolutely amazing how the precious metals markets have followed our October 2018 predictions almost like clockwork.  Our call for an April 21~24 momentum base below $1300 followed by an extensive rally to levels above $1550 has been playing out almost like we scripted these future price moves.

Now that the $1550 level has been reached, we are expecting a rotation to levels that may reach just below the $1490~1500 level before attempting to set up another momentum base/bottom formation.  And just like clockwork, Gold has followed our predictions and price is falling as we expected. Just look at our October 2018 chart where we forecasted the price of gold...



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Chart School

Crude Oil Cycle Bottom aligns with Saudi Oil Attack

Courtesy of Read the Ticker

Do the cycles know? Funny how cycle lows attract the need for higher prices, no matter what the news is!

These are the questions before markets on on Monday 16th Aug 2019:

1) A much higher oil price in quick time can not be tolerated by the consumer, as it gives birth to much higher inflation and a tax on the average Joe disposable income. This is recessionary pressure.

2) With (1) above the real issue will be the higher interest rate and US dollar effect on the SP500 near all time highs.

3) A moderately higher oil price is likely to be absorbed and be bullish as it creates income for struggling energy companies and the inflation shock may be muted. 

We shall see. 

...

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Kimble Charting Solutions

Bond Yields Due For Rally After Declining More Than 1987 Stock Crash

Courtesy of Chris Kimble

U.S. Treasury Bond Yields – 2, 5, 10, 30 Year Durations

The past year has seen treasury bond yields decline sharply, yet in an orderly fashion.

This has spurred recession concerns for much of 2019. Needless to say, it’s a confusing time for investors.

In today’s chart of the day, we look at a longer-term view of the 2, 5, 10, and 30-year treasury bond yields.

Short to long term bond yields are all testing 7 to 10-year support levels as momentum is at the lowest levels in a decade.

A yield rally is likely due across the board after a recent decline that was bigger than the stock crash in 1987!

If yields fail to ral...



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Digital Currencies

China Crypto Miners Wiped Out By Flood; Bitcoin Hash Rate Hits ATHs

Courtesy of ZeroHedge View original post here.

Last week, a devastating rainstorm in China's Sichuan province triggered mudslides, forcing local hydropower plants and cryptocurrency miners to halt operations, reported CoinDesk.

Torrential rains flooded some parts of Sichuan's mountainous Aba prefecture last Monday, with mudslides seen across 17 counties in the area, according to local government posts on Weibo. 

One of the worst-hit areas was Wenchuan county, ...



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Biotech

The Big Pharma Takeover of Medical Cannabis

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

 

The Big Pharma Takeover of Medical Cannabis

Courtesy of  , Visual Capitalist

The Big Pharma Takeover of Medical Cannabis

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



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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Members' Corner

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

Are you ready to retire?  

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

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

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



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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:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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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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