Archive for 2017

Why Did Silver Fall, Report 12 Mar, 2017

Courtesy of ZeroHedge. View original post here.

By Monetary Metals

The question on the lips of everyone who plans to exchange his metal for dollars—widely thought to be money—is why did silver go down? The price of silver in dollar terms dropped from about 18 bucks to about 17, or about 5 percent.

The facile answer is manipulation. With no need of evidence—indeed with no evidence—one can assert this and not be questioned in the gold and silver communities. We have recently come across a term normally used to describe Leftists and Social Justice Warriors, virtue signaling. One piously declares that one supports the cause, one speaks truth to power, one sticks it to The Man, well you get the idea. The concept of virtue signaling seems equally appropriate to those who sing the chorus on every price drop, “manipulation.”

Besides, we have peeps in high places in London and New York and Beijing, and they tell us silver is manipulated…

Actually, we rather prefer to look at data than listen to whispers. What would the data show if demand for physical silver metal was robust and rising while someone sold so many futures contracts that the price of the metal was forced down just about a dollar?

The basis and cobasis are spreads between physical silver metal and futures. The scenario we just described would collapse the basis and skyrocket the cobasis.

Is that what happened this week?

Before we get that, we want to note that crude oil fell from $53.33 last week to $48.49, or -9%. Copper fell from $2.70 to $2.60, or -3.7%. Wheat fell from $4.53 to $4.40, or -2.9%. People miscall this deflation.

We don’t know whether this will affect the Fed’s seeming commitment to damn the economy, full rate hikes ahead. However, we do know that sentiment bleeds from one speculative asset to another (and in a near-zero interest rate environment, all assets are used by speculators). “If energy, industrial metal, and food are going down, then surely silver should go down too,” seems to be the logic.

At least this week.

We are much more interested in the supply and demand fundamentals. We acknowledge that speculators can temporarily move prices—sometimes a lot—but


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Oil Tumbles Below $48 As JPM Warns Of Possible Commodity Liquidations

Courtesy of ZeroHedge. View original post here.

Any hopes for an early rebound in oil following last week's torrid plunge in WTI and Brent appear to be dashed, at least at the open, when WTI promptly tumbled below $48/barrel.

While there have been no materal adverse catalysts over the weekend, three factors are being mentioned by Sunday night trading desks as drivers behind the latest seloff.

First: price momentum has simply persisted from the Friday US selloff, as Asian funds catch up to the US action. 

Second, some have pointed to a report by JPM's Nikolaos Panigirtzoglou from Friday evening, which warns of "commodity downside" as a result of persistent near-record net long futures positioning, and warns that "a pending normalization/mean-reversion of spec positions in commodity futures has begun." Here are some of the reports highlights:

  • Spec positions stood at pretty elevated levels as of last Tuesday March 7th, the latest available snapshot, suggesting that this normalization is at its beginning rather than its end phase.

  • Even if we assume that the change in the open interest since last Tuesday reflects entirely a build up of short spec positions or a reduction of long spec positions, the commodity position overhang would remain.
  • This pending mean reversion in commodity spec positions is unlikely to be prevented by the growth of commodity index products.
  • In our opinion, the demand for long positions in commodity futures contracts created by passive commodity index products acts merely as a background force.
  • Mean reversion is primarily driven by active investors such as hedge funds and in particular CTAs.
  • Simple return momentum trading models suggest that CTAs are turning incrementally more negative across most commodities.
  • We get a similar overbought picture in commodity equities, by looking at the short interest of the biggest commodity stocks in world equity markets.
  • Therefore any further unwinding of commodity futures positions is likely to be accompanied by an increase in the short interest of commodity stocks.

A third possible catalyst for the drop is the yet another prominent voice in the oil industry has slammed the OPEC gambit, this


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Mysterious US billionaire played crucial role in Trump, Brexit victories

By Guest Post. Originally published at ValueWalk.

jensjunge / Pixabay

 

The secretive US billionaire Robert Mercer played a crucial role in the United Kingdom’s campaign to leave the European Union, as well as US President Donald Trump’s election victory, according to a recent media report.

Mercer gave the UK’s Leave.eu campaign a boost by directing his data analytics company, Cambridge Analytica, to offer its services free of charge via his close friend Nigel Farage, a prominent Brexit supporter and former leader of the far-right UKIP party, British newspaper The Guardian reported earlier this week.

Until recently, the 70-year-old hedge fund manager was best known for keeping out of the public eye. With an income of $150 million in 2016, Mercer came in at number 18 on Forbes list of 25 Highest-Earning Hedge Fund Managers and Traders last year.

A pioneer of artificial intelligence

Mercer launched his career at IBM during the early 1970s. While there, he earned a reputation as a talented computer programmer, making a number of advances in language processing – an area of research that has since played an important role in the development of artificial intelligence (AI).

In 1993, he joined Renaissance Technologies, which specialised in using so-called “big data” to identify investment strategies. After eight years at the hedge fund, he was named co-CEO in 2011.

Known for his extreme discretion, Mercer made news headlines during the 2016 US presidential election as one of the biggest Republican donors. After initially supporting Senator Ted Cruz of Texas during the primaries, Mercer spent more than $11 million to help get Trump elected.

He has also invested millions of dollars into the far-right website Breitbart News Network, which was once run by Trump’s chief strategist and former campaign manager, Stephen Bannon. Last week, Breitbart President and CEO Larry Solov confirmed that the Mercer family was a partial owner of the organisation.

Cruz, Trump and Leave.eu

But it now appears Mercer’s support extended far beyond financial contributions. According to The Guardian, he directed Cambridge Analytica, of which he


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Crude Dips Below $48.00 First Time Since November 29: CPI Where to From Here?

Courtesy of Mish.

Passthrough price pressures due to rising oil are rapidly abating. A trio of charts on a daily, weekly, and monthly basis provide a good picture.

Crude Daily Chart

Crude Weekly Chart

Crude Monthly Chart

Inflation Hawks Worried

Crude closed at $39.44 for the week ending March 12, 2016.


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Caught On Video: “Environmental Activists” Deface Trump’s Palos Verdes Golf Course

Courtesy of ZeroHedge. View original post here.

A group of environmental activists defaced one of President Trump’s premier golf courses early on Sunday morning. The group, which calls itself an “anonymous environmental activist collective” snuck into Trump National Golf Club in Rancho Palos Verdes, California and using six-foot-tall letters carved a message into the green that said: “NO MORE TIGERS. NO MORE WOODS.” The “activists” also released a 1 minute video documenting the trespassing in all its glory, a recording which also spliced footage made from a drone at the time of the event.

The 7,300-yard course, located in a peninsula just south of Los Angeles, was recently ranked the 43rd best course in California by Golf Digest.

In a statement sent to The Washington Post, the group said the vandalism was carried out in response to the Trump administration’s “blatant disregard” for the environment. “In response to the president’s recent decision to gut our existing protection policies, direct action was conceived and executed on the green of his California golf course in the form of a simple message: NO MORE TIGERS. NO MORE WOODS,” the statement said.

The message was carved into the green using gardening tools and took less than one hour to accomplish, according to a member of the group who discussed the project with The Washington Post on the condition of anonymity.

The group consisted of four people, who accessed the course by scaling a fence and “walking down a steep hill laced with cacti,” the group member told The Post. “Tearing up the golf course felt justified in many ways,” the member said.

“Repurposing what was once a beautiful stretch of land into a playground for the privileged is an environmental crime in its own right.” According to the law, it’s also criminal trespassing and explains why the “activists” were all shrouded head and toe to avoid being recognized in the video.

Neither the golf course, nor the Trump Organization’s NYC HQ respond to requests for comment.  A spokesman for the Los Angeles County Sheriff’s Department confirmed that the department received a call for service Sunday morning about grass being dug up around hole five at the golf club. The spokesman said the department sent a deputy to the scene to determine whether the damage constituted an act of vandalism or whether


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Undervalued Vectrus Inc, FCF/Price Yield 15%, Solid Backlog and Prospective Pipeline

By The Acquirer’s Multiple. Originally published at ValueWalk.

One of the cheapest stocks in our All Investable – Stock Screener is Vectrus Inc (NYSE:VEC).

With a market cap of $240 million, this micro-cap remains undiscovered by a lot of investors and too small for investment by large institutions.

Freeimages9 / Pixabay

Vectrus provides infrastructure asset management, information technology and network communication services, and logistics and supply chain management services to the U.S. government worldwide. Its main business is providing base operations, logistics, information and communications services to the military.

A quick look at the company’s share price (below) over the past twelve months shows that the price is up 12% to $22.36 from $20.53 in March 2016. That is 36% off its 52 week high of $34.98.

(Source, Google Finance)

Vectrus had two major setbacks in 2016 which were reflected in the significant share price drops in September. The first was the Army’s non-renewal of the company’s (APS-5 Kuwait) contract to provide services in Qatar and Kuwait, and the second was the loss of its Kuwait Base Operations & Security Support Services (K-BOSSS) contract, which was the largest contract in the Vectrus portfolio. Vectrus subsequently re-competed on both contracts (see below).

Latest Earnings Release

Vectrus recently released its Q4 2016 and FY2016 results. FY2016 revenue was up 1% to $1.19 Billion compared to $1.18 Billion for the previous corresponding period (pcp). The increase was due mainly to a $130.9 million increase in revenue from the company’s Middle East programs. Operating income was also up 3.6% to $42.8 million from $40 million compared to the pcp, and EBITDA improved by 5% to $45 million from $43 million for the pcp. The net result was that Vectrus reported a 22% drop in net income of $24 million compared to $31 million for the pcp.

K-BOSSS Update

Just this month Vectrus was informed that the U.S. Government has cancelled the solicitation for the K-BOSSS re-compete. According to the notification received by Vectrus, the U.S. Government determined the requirements under the solicitation have changed substantially because of change in mission requirements. The U.S. Government anticipates soliciting the new K-BOSSS requirements as soon as practicable.

“We recognize the Government’s concerns and look forward to a new solicitation,” said CEO Chuck Prow. “Meanwhile, we will continue to deliver the excellent performance our client has consistently received on this contract.”

In 2016, the K-BOSSS…
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Trump’s War on the Truth Tellers

 

Trump’s War on the Truth Tellers

Courtesy of Robert Reich

Trump and his White House don’t argue on the merits. They attack the credibility of the institutions that come up with facts and arguments they don’t like. 

They even do it preemptively. Last week, White House press secretary Sean Spicer warned that the nonpartisan Congressional Budget Office couldn’t be trusted to come up with accurate numbers about the costs and coverage of the Republican’s replacement for the Affordable Care Act.

“If you’re looking at the CBO for accuracy, you’re looking in the wrong place,” he said.

So what’s the right place? The Oval Office? 

Bear in mind the director of the CBO is a Republican economist and former George W. Bush administration official who was chosen for his position by the Republican Congress in 2015. 

No matter. The White House is worried about what the CBO will say about Trumpcare, so it throws the CBO under the bus before the bus arrives. 

Trump couldn’t care less about the long-term consequences, but the rest of us should. For more than four decades the U.S. budget process has depended on the CBO’s analyses and forecasts. The office has gained a reputation for honesty and reliability under both Republican and Democratic appointees. Now, it’s tainted. 

This has been Trump’s MO since he first met a fact he didn’t like. 

When candidate Trump didn’t like the positive employment numbers from the Bureau of Labor Statistics showing the economy improving under the Obama administration, what did he do? He called the official unemployment rate “such a phony number,” “one of the biggest hoaxes in American modern politics” and “the biggest joke there is.”

It’s possible to take issue with the ways the Bureau of Labor Statistics measures unemployment, but why undermine public trust in the Bureau itself?

Of course, when February’s job numbers turned out rosy, Trump’s White House embraced the monthly employment report. But the damage has been done. The BLS looks political.  

Spicer tries to wrap Trump’s institutional attacks in populist mumbo-jumbo: “I think [Trump] addressed that in his inaugural speech when he talked about shifting power outside of Washington D.C. back to the


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The Paradox Of Our Times: Record Assets, Record Debt, & Record Depression

Courtesy of Jeffrey Snider, Alhambra Investment Partners

It is surely one of the primary reasons why many if not most people have so much trouble accepting the trouble the economy is in. With record high stock prices leading to record levels of household net worth, it seems utterly inconsistent to claim those facts against a US economic depression. Weakness might be more easily believed as some overseas problem, leading to only ideas of decoupling or the US as the “cleanest dirty shirt” – the US economy has problems, but how bad can they be? Yet, despite asset price levels and even record debt, all those prove is just how disconnected those places have become from what used to be an efficient way to redistribute financial resources.

According to the Fed’s Z1 report, Household net worth climbed by $2 trillion in Q4 alone to $92.8 trillion.

That is a 69% increase from the low in Q1 2009, even though Final Sales to Domestic Purchasers have grown by just 30% in that same time.

The wealth effect is dead, or, more specifically, it never was.

From the view of net worth, the increase to record debt levels seems manageable. From the more appropriate view of income and economy, it does not, even though US debt levels have grown more slowly post-crisis. That would mean debt is partway between assets and economy, sort of splitting the difference of what monetary policy believes and what it, at best, “achieved.”

Total debt (Total Lending plus Total Securities) rose just 0.8% in Q4 2016, the slowest growth rate since Q3 2015. That deceleration was shared equally by loans as well as securities, both registering record highs but also remaining hugely inefficient toward real economic growth and therefore capacity (what is all this debt financing?).

The minimal amount of overall deleveraging after the Great “Recession” has achieved a similarly minimal amount of financial rebalancing debt to economy. Total credit levels have remained historically out of bounds with the capacity to support them. The chart above may provide a clue as to why that has been, especially in contrast to the Great Inflation. The


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Gary Cohn: “The Fed Is Doing A Good Job”; Trump “Respects The Powers Of The Fed”

Courtesy of ZeroHedge. View original post here.

Former Goldman president, and current White House chief economic advisor – as well as the person who supposedly is engaged in a bitter fued with Peter Navarro over the shape of future US trade policy – Gary Cohn appeared on Fox News Sunday, and spoke at length to Chris Wallace about some of the key economic policy changes to be implemented.

First, he touched on Obamacare repeal, saying that the administration will do “whatever it takes” to get the bill passed, setting a high bar for expectations from Trump who is still expected to meet significant challenges from House and Senate republicans.

Cohn then touched on Trump’s vision to protect the country, saying the Obama administration under-invested in the military the past eight years. “Unfortunately, we have no alternative but to reinvest in our military and make ourselves a military power once again,” Cohn said. Cohn said Trump met over the last several weeks with generals from the Army, Navy, Air Force and Marines to talk about the military’s preparedness. He said it has been disappointing to hear what these generals have had to say. Cohn conceded that if funds are used to reinvest in the military, cuts need to be made elsewhere in order ensure a balanced budget without creating a further deficit.

“It’s no different than every other family in America that has to make the tough decision,” Cohn said. “When they need to spend money somewhere, they have to cut it from somewhere else. These are tough decisions, but the president has shown he is ready, willing and able to make these tough decisions.”

Finally, touching on a topic that until recently at least appeared to be dear to Trump’s, Cohn – speaking in his best former Goldman COO voice – said that the Federal Reserve “has been doing a good job” and the Trump administration respects its independence, even if the U.S. central bank raises interest rates this week.

He said that Trump administration will keep working to reduce barriers to job creation no matter what the Fed does on interest rates.

“The Federal Reserve is an independent agency and they operate as such. They have their economic data, which they look at and they are trying to always modulate economic growth with inflation, with the


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Consuming Our Future: Das Warns “The Model Was Always Doomed To Fail”

Courtesy of ZeroHedge. View original post here.

Only lowering our living standards will achieve sustainable growth. That’s the message from Satyajit Das, a former financier who anticipated the GFC. Debt, energy consumption, housing affordability or superannuation – it’s all based on a financial system that’s in fact a completely fictional model. This model was always doomed to fail – eventually.

Beyond growth as we know it – How can we stop consuming our future?

Full Interview below

As Das concluded previously, nothing has really changed since the 2008-09 crisis. Low interest rates encourage borrowing. Artificially low capital costs have allowed unsustainable businesses to continue, generating sub-standard returns. Companies seek glib solutions to the complex problem of earning adequate returns by re-engineering their finances, rather than improve their operations.

Governments also are increasingly borrowing and adopting private-sector financial engineering techniques to deal with economic problems. Governments have increased their debt levels, in some cases resorting to forcing purchases of bonds by central banks, domestic banks, and captive institutions such as state pension funds.

Conventional and innovative monetary policies have supported aggregate demand and helped maintain economic activity to prevent prevented even deeper recessions. Policies that have sent both real and nominal interest rates to ultra-low levels have resulted in re-distribution of income and wealth.

According to a 2013 report from the McKinsey Global Institute, between 2007 and 2012, governments in the U.S., Europe and the U.K. collectively benefited by $1.6 trillion, primarily through reduced debt-service costs and increased profits remitted from central banks. Most of this wealth transfer came from households, pension plans, insurers, and foreign investors, mainly through lower interest earnings on savings.

It is time that businesses and governments focus on helping the real economy to solve large problems including debt, lack of growth, industrial stagnation, slowing innovation and productivity, aging demographics, income inequality, resource scarcity, and environmental threats.

Financial engineering masks the true performance and health of companies and nations. But the damage goes much deeper, deluding decision-makers into thinking that things are better than they are, and that solutions to problems can be deferred.

And worse still, the mispricing of assets across world markets has reached epidemic proportions.

Stock prices


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Phil's Favorites

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

 

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

rblfmr / Shutterstock.com

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

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



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Zero Hedge

Futures Slides As Trade Tensions Escalate

Courtesy of ZeroHedge. View original post here.

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

...



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Kimble Charting Solutions

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

Courtesy of Chris Kimble.

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

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

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



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Insider Scoop

Amgen To Buy Danish Collaborator Nuevolution For $167M

Courtesy of Benzinga.

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

What Happened

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

Th...



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Chart School

Weekly Market Recap May 18, 2019

Courtesy of Blain.

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

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

Then on Wednesday:

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

...

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Digital Currencies

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

 

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

The high seas are getting lower. dianemeise

Courtesy of Iwa Salami, University of East London

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



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Biotech

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

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

 

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

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

Courtesy of David M. Gilbert, Florida State University

...



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ValueWalk

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

By Jacob Wolinsky. Originally published at ValueWalk.

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

rawpixel / Pixabay

Friends and Fellow Investors:

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



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Members' Corner

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

Are you ready to retire?  

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

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

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



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Mapping The Market

It's Not Capitalism, it's Crony Capitalism

A good start from :

It's Not Capitalism, it's Crony Capitalism

Excerpt:

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

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



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OpTrader

Swing trading portfolio - week of September 11th, 2017

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

 

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

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

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

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



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

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

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       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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