Archive for 2017

Counter-trend

An unlikely analogy: the emboldening of white supremacists and the 10-Year Treasury bond yield. I only wish I could feel as hopeful as Joshua Brown that this new era of hate is a counter-trend and not a new trend.  

Counter-trend

Courtesy of 

Yesterday, thirty people were injured and three killed at a white supremacist demonstration in Charlottesville, Virginia.

Neo-Nazis, far-right militias, the Ku Klux Klan and other hate groups, emboldened by the Presidency that they believe they helped to bring about, are now marching out in the open – no hoods, no masks, no shame.

Just three generations ago, American boys and girls went off to war and died in the hundreds of thousands to defeat these evil ideologies. Fascism is at odds with liberty and freedom. We all agreed on this as a society once upon a time. As descendants of these World War II heroes, we now find ourselves, a scant seven decades later, re-fighting this war – on the streets of our towns, on the internet and, yes, in the halls of government.

On Wall Street, we have a term called trend. It’s a description of the direction a particular stock, bond, index or asset class is headed. An up-trend implies a price that is moving higher. A downtrend is a price that is clearly headed lower. The thing is, powerful trends that last a long time are prone to short periods of time during which they appear to reverse themselves.

We call these counter-trends.

Counter-trends confuse people. They trick us into thinking that the prevailing trend itself has changed. In the chart below, you’ll see the yield on the 10-Year Treasury bond, which has been falling since the middle of 1981 or in a defined trend lower. But it hasn’t all been one smooth ride down. You can see several examples of counter-trends (red arrows) within the larger trend.

Counter-trends will do that. They’ll take us by surprise and shock the people who had grown accustomed to an established, prevailing trend.They call this relentless drop in interest rates “the great moderation.” It’s easy to see how obvious this trend is, but only with the benefit of hindsight. For investors in 1994, watching the counter-trend rally in interest rates,…
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Weekly Market Recap Aug 13, 2017

Courtesy of Blain.

It was looking like YET ANOTHER low volatility week…until Thursday… when finally some fireworks went off.   Many attributed it to sabre rattling between the U.S. and North Korea but eventually the market has to come down, and a convenient reason will be found when the time comes.   For the week the S&P shed 1.4%, its worst week since March, while the NASDAQ dropped 1.5%.   Of note, the Russell 2000 index of small-cap stocks finished out the week 2.7% lower, its biggest one week decline since February 2016.

“From a geopolitical perspective, we understand why the escalation in tensions will have shaken some of the complacency out of investors,” said Eric Wiegand, senior portfolio manager at U.S. Bank Private Client Wealth Management. “And while risks remain elevated from a geopolitical perspective, valuations are not necessarily excessive, though full. But we’re in a low inflationary environment, which can help valuations remain elevated for longer than they would otherwise.”

Even with Thursday’s action we keep seeing stories about “historic” lack of volatility – by this measure the market is the quietest since 1965!!!

The last time Wall Street trading was this quiet, Lyndon Johnson was president, The Sound of Music was the movie to see, and on the radio, the Rolling Stones were searching for satisfaction.  According to an analysis by Michael Batnick, director of research at Ritholtz Wealth Management, volatility in the U.S. equity market hasn’t just been in short supply of late, it’s on track for its lowest level in 52 years.  “For the first half of the year, the average absolute daily price change, meaning all negative signs are removed, is just 0.32%. If the year ended today, this would be the smallest daily price change since 1965,” he wrote in a blog post.  Batnick noted that this kind of environment was unusual, saying it “could change at any time of course, and in fact I would expect it to.”

Until Thursday the S&P 500 had only moved >1% (in either direction) 4 times this year!  Now it’s 5!  Further the S&P 500 has gone 284 trading days without…
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China Macro Data Misses Across The Board In July, Worst Since 2016

Courtesy of ZeroHedge. View original post here.

Confirming the credit impulse peak is passed (June's surprise beats), China's July macro-economic data is ugly. Retail Sales, Industrial Production, and Fixed Asset Investment all fell and missed notably. For now the reaction is absolutely nothing…

National Bureau of Statistics reports some ugly data for July:

  • China July Industrial Output MISS Rises 6.4% Y/y; Est. 7.1% (range 6.5%-8.7%, 37 economists)
  • Fixed-asset investment excluding rural households MISS up 8.3% y/y in Jan.-July; est. 8.6% (range 8.4%-9.3%, 35 economists)
  • July retail sales MISS rose 10.4% y/y; est. 10.8% y/y (range 9.5%-11.5%, 37 economists)

China data is the weakest since 2016…

We wonder just how bad it will get…

For now there is zero reaction anywhere as it appears traders are numb to global nuclear war concerns, epic Japanese growth, and dismal Chinese data.





Just How Scared Are Americans Of North Korea?

Courtesy of ZeroHedge. View original post here.

Growing tensions between Washington and Pyongyang escalated dramatically this week with North Korea laying out plans to target the American island territory of Guam in a missile strike. News reports have shown intercontinental ballistic missiles being tested that have the potential to reach the continental U.S. while intelligence sources believe the regime has now managed to miniaturize a nuclear weapon to fit one of those missiles.

Statista's Nial McCarthy points out that a CNN poll has now revealed that increasing numbers of Americans are becoming concerned by the threat presented by Pyongyang.

Nearly two-thirds of those polled, 62 percent, say North Korea is a very serious threat while 23 percent think the threat is moderate. Only 5 percent of Americans now feel the secretive communist nation poses no threat to their country.

Infographic: Just How Scared Are Americans Of North Korea? | Statista

You will find more statistics at Statista

The poll puts the level of fear into perspective by comparing the threat posed by other states and terrorist groups.

The so-called Islamic State or ISIS is still considered the top threat to the U.S. with 64 percent of those polled saying the threat it poses is very serious. Iran and China are far behind ISIS and North Korea with 33 and 20 percent of Americans considering these nations a serious threat respectively.





Japan GDP Surges 4%, Most In Two Years, On Jump In Government Stimulus Spending

Courtesy of ZeroHedge. View original post here.

Japan's economy grew by 1% sequentially, and 4% on an annualized basis in Q2, smashing expectations of a 2.5% print and well above the upward revised 1.5% in the first quarter; it was also the the highest quarterly growth since a 5% print in Q2 2015, Japan's Cabinet Office reported, and the 6th consecutive quarter of expansion for recently embattled Prime Minister Shinzo Abe, who has plunged in the polls following a series of corruption scandals.

The unexpectedly strong GDP print was driven by a 9.9% jump in private non-residential investment as well as an striking 21.9% annualized surge in public investment as some of the public works spending included in last year’s economic stimulus package starting to emerge; meanwhile exports declined.

On a sequential basis, GDP rose 1.0%, above the 0.6% expected, up from the 0.4% in Q1 and the highest print in just over two years.

Annualized private demand soared by 5.3%, or 1.3% higher compared to the first quarter, an impressive jump from the previous quarter’s rise of 0.2%. Private consumption rose 0.9% in Q2, more than double the 0.4% reported for the first quarter.  Aside from the clearly "one-time" surge in public investment, which in the second quarter exploded by an annualized 21.9% as some of the public works spending included in last year’s economic stimulus package have started to emerge, private non-residential investment climbed 2.4% from 0.9% in Q1, while government consumption grew 0.3%, bouncing from a 0.1% contraction in the prior quarter.

Finally, spoiling the otherwise pristine report was the unexpected drop in exports of goods and services which dropped 0.5% on a quarterly basis and -1.9% annualized, the lowest export number since Q2 of 2016. The plunge in net exports dragged Japan's headline growth figure down 0.3% points.

Ahead of the number, Goldman's Japan analyst Naohiko Baba said that "we estimate Apr-Jun real GDP growth of +2.4% qoq annualized, up from +1.0% in Jan-Mar. While we expect net exports to turn to a negative contributor, we think private-sector demand was strong for personal consumption and capex. We also expect double-digit growth for public capital formation, with some of the public works spending included


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USGS Warns California Needs Close Monitoring Of 8 Active Volcanoes

Courtesy of ZeroHedge. View original post here.

Authored by Mac Slavo via SHTFplan.com,

California could be even closer to a major natural disaster than ever before.  With eight active volcanoes and a high state population, the United States Geological Survey says that the Golden State is in desperate need of very close monitoring.

“I call them the watch-list volcanoes,” said Margaret Mangan, Scientist-in-Charge at the California Volcano Observatory. Scientists know from geophysical and geochemical research that these volcanoes have molten rock and magma, “in their roots,”  and the world’s top volcanologists aren’t taking any chances anymore.

 They are heading to Portland, Oregon on August 14 for the first international volcanology assembly held in the U.S. since 1989. The many famous, prominent, and dangerous volcanoes of the West Coast will be the subject of field trips and much discussion during the assembly.

The volcanoes which will get the most discussion are shown in the image below.

USGS caption: Volcanoes of very high to low threat are scattered throughout California, from the Oregon border (north) to Mexico (south). Other older volcanoes in California are of less concern. California’s volcano watch list is subject to change as new data on past eruptive activity are collected, as volcanic unrest changes, and as populations in threatened areas grow or decline.

Throughout the Cascade Range and into southern California, the West Coast is home to most of the country’s highest-threat volcanoes, as ranked by the United State Geological Survey, making California a ticking time bomb. As if the earthquake threat on the heavily populated West Coast wasn’t enough, scientists are now concerned about the volcanic activity as well. While Mount Shasta unsurprisingly tops USGS’s list of very-high threat volcanoes in California, there are seven other volcanic areas in the state that are also “young, nervy, jacked up on magma, and likely to erupt.”

Back in 2005, a national team led by John Ewert, a volcanologist with the USGS Cascades Volcano Observatory, established a system for other volcanologists, which would help them decide which of the United States’ 169 young volcanoes are the most dangerous and most in need of monitoring. In the


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Stolen Russian S-200 Missile Explodes After Being Sold For Scrap

Courtesy of ZeroHedge. View original post here.

A "stolen" 10 meter-long Soviet-era, anti-aircraft missile has exploded at a recycling centre in eastern Russia, killing two and injuring one, the Telegraph reports. Russian media were reportedly alerted to the explosion of the large-scale missile in the Siberian city of Chita after a YouTube user uploaded a car dashcam video showing the moment of the blast.

According to the Telegraph, a criminal investigation was opened into the "illegal acquisition and storage of explosive device" after two warheads from a S-200 Angara missile were found at the blast site. Local authorities said it appeared that the warhead had detonated while workers were cutting it down for scrap metal.

The exploded missile was an S-200 Angara, also known as the SA-5 "Gammon" in NATO countries, a long rage, medium-to-high altitude surface-to-air missile system. The SAM has been in service since 1967s, but has since been replaced by the S-300 and S-400 surface-to-air models.

It is unknown how the missile came to be at a recycling plant. Local news website by24.org says that the seven tonne missile "had been stolen" from a military base by persons unknown and taken to the facility in exchange for cash. It had likely exploded while recycling workers were trying to dismantle it.

News website The Insider says that emergency response workers later found another intact rocket from the S-200 missile system.

The S-200 SAM has a range of 300 km

According to BBC, the incident has ignited lively discussion on Russian social media, with many asking on popular social network VKontakte how it came to be at a recycling plant in the first place. "What was a missile doing at a non-ferrous scrap metal collection point?" asked Demid Tkachenko.

"We've got so many rusty weapons in Russia that people are selling for scrap," added Mayya Yarovaya, who said that the consequences of this incident "are tragic".

With an extra dose of snark the Telegraph adds that "selling weaponry for scrap is not unusual in remote Russian regions. Last month the National Guard in the Kaliningrad region reported discovering World War II shells at a local scrap yard."





FX Week Ahead: Myopic Markets Hit USD On Inflation Miss

Courtesy of ZeroHedge. View original post here.

Submitted by Shant Movsesian and Rajan Dhall MSTA from fxdaily.co.uk

FX Week Ahead – Myopic markets hit USD on inflation 'miss' – rest of the major economies in focus ahead.

Once again, sluggish inflation takes a hammer to currency and we saw the USD turn back from a tentative recovery, which many still see as corrective against some of its major counterparts.  In comparative terms, we still feel the numbers out on Friday were not as bad as the pundits and markets perceived, but liquidity in the summer is not at its best at short term (reactive) flow gets the 'benefit' to some degree, with the usual suspects winning out – for now. The core rate held 1.7% – so that is 3 months in a row now, but the headline was up from 1.6% to 1.7% instead of 1.8% – small potatoes at the moment, but when looking at this as a global phenomenon, the impact was a little too one dimensional/sided, but next week will naturally tell us more.  

No surprise then to have seen the EUR shooting back into the mid 1.1800's again as the revival in Europe continues to draw in investors.  As we have seen in the sharp upturn in EUR/CHF, dormant cash on the sidelines is now being deployed, but at a pace which may unnerve the ECB who are ever wary of seeing another taper tantrum get out of hand.  Not that they have to worry about the rates market at the present time, with tensions between the US and North Korea driving money back into fixed income and safe haven in general, with the benchmark German 10yr now under 40bps again alongside the T-Notes pulling back further into the low 2.00%'s.  The spread has been widening again, but the near term correlation with EUR/USD has diminished (to put it politely) and after the very brief dip under 1.1700, 1.2000 is back on the radar.  

In the US, retail sales on Tuesday will be the primary data driver from the USD perspective, so price action may be a little more lively through the week rather than having to sit tight until the end of week determinants, with both payrolls and


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Intel Memo: Marco Rubio Targeted For Assassination By Venezuela Lawmaker

Courtesy of ZeroHedge. View original post here.

Senator Marco Rubio may have been targeted for assassination by one of Venezuela's most powerful lawmakers and long time secretive head of the country's security services. According to the Miami Herald, the US Department of Homeland Security disseminated a sensitive memo to federal agencies last month which identified Diosdado Cabello Rondon as behind the "order to have Senator Rubio assassinated," while also noting the intelligence to be unverified as “no specific information regarding an assassination plot against Senator Rubio has been garnered thus far."

Cabello Rondon is widely believed to be Venezuela's second most-powerful man and head of the country's military and security services. US media has referred to him as "the Frank Underwood of Venezuela" (from the TV series House of Cards) for his well-known history of corruption, suspicion of drug trafficking, and Machiavellian plotting against rivals and involvement in pro-Chavez military crackdowns. As a behind the scenes influential military leader he's kept both the late president Hugo Chavez and current socialist strongman Nicolas Maduro in power.

Diosdado Cabello Rondon, currently Vice President of the United Socialist Party of Venezuela, also believed to be powerful leader of the country's security services. Photo Source: Wiki Commons.

Politico has also obtained the memo and reports the following contents of the intelligence report marked "law enforcement sensitive" (the memo's contents are in bold):

“In some unspecified manner, CABELLO RONDON’s problems involved U.S. Senator Marco Rubio,” said the memo, obtained by POLITICO, which is not releasing information that could endanger Rubio, his family or confidential law enforcement methods or sources.

The memo said that Cabello Rondon may even have discussed raising the money to kill Rubio or deal with the “problems” facing Venezuela’s ruling regime.

“CABELLO RONDON did indeed issue an order … to have Senator Rubio assassinated,” the memo said. “Additionally, CABELLO RONDON was communicating with unspecified Mexican nationals in furtherance of the matter.”

Rubio has long been a fierce critic of Cabello with the two having recently engaged in a public war of words. During a July 19 Senate hearing Rubio called Cabello “the Pablo Escobar of Venezuela” as US authorities have an active drug investigation against Cabello and other Venezuelan leaders pending. Rubio


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Futures Up, Gold Down With World “On The Brink”

Courtesy of ZeroHedge. View original post here.

Despite the dramatic action in Bitcoin this weekend, it appears the world's wise capital markets investors know just what to do faced with civil war in America, kinetic war with Venezuela, and nuclear war with North Korea – simple – Buy The Dow and Sell Gold…

Bitcoin suggested some 'angst'…

But the machines wanted to take out The Dow stops from Friday…

Currency markets are dead for now – JPY unch, EUR unch, CNH modestly higher.





 
 
 

Phil's Favorites

Brexit identities: how Leave versus Remain replaced Conservative versus Labour affiliations of British voters

 

Brexit identities: how Leave versus Remain replaced Conservative versus Labour affiliations of British voters

Courtesy of Geoffrey Evans, University of Oxford and Florian Schaffner, University of Oxford

British politics was relatively stable in the post-war decades, and voters’ strong party loyalties were influenced by their place in society. More recently, there has been a marked decline in the number of people identifying with a political party, and in the strength of that attachment.

Now, our new research for a repor...



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Zero Hedge

Stocks Jump On Kudlow Denial: "There Is No Cancellation. None. Zero."

Courtesy of ZeroHedge. View original post here.

"There are no cancellations. None. Zero. Let's put that to rest."

Hours after a headline from the FT about the US cancelling a round of trade talks with two senior Chinese ministers send stocks reeling to their lows of the day, the administration has dispatched Larry Kudlow (who apparently had to wait until 20 mins before the close thanks to CNBC's wall-to-wall Davos coverage) to jawbone the markets back into the green by...



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Kimble Charting Solutions

S&P and Crude both testing key breakout levels!

Courtesy of Chris Kimble.

The correlation between Crude Oil and the S&P 500 has been rather high over the last 100-days, as each looks to have peaked at the same time around the 1st of October at (1).

After peaking together in October, Crude fell over 40% and the S&P nearly declined 20%, with both bottoming on Christmas Eve at each (2).

Both have experienced counter-trend rallies since the lows, as Crude is up 23% and the S&P 13%.

These rallies have both testing dual resist...



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Insider Scoop

Cowen Suits Up With Nike, Looks To Outperform

Courtesy of Benzinga.

Related NKE Consumer Discretionary Q4 Earnings: U.S. Consumer Appears Strong Amid Heightened Global Uncertainty Golf Equipmen...

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Chart School

Weekly Market Recap Jan 20, 2019

Courtesy of Blain.

After entering the week quite overbought, indexes took a small retreat Monday before hurling back upwards.  This is typical of the “V” shaped moves up after any significant selloff, we’ve seen most of the past decade and watching them unfurl is quite amazing actually.  Thought maybe this time would be “different” but not so much.  So two week’s ago we asked “Has the Fed solved all the market’s problem in 1 speech?” – and thus far the market has answered resoundingly yes.  The word of the year thus far in 2019 is “patience” as that simple insert into a speech change the whole complexion of everything.

China has also been busy stimulating; on Tuesday:

An announcement from the People’s Bank of China that ...



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ValueWalk

Everyone Else Is Selling Stocks, So Is It Time To Buy?

By Michelle Jones. Originally published at ValueWalk.

After a difficult few trading days in the beginning of the year, U.S. stocks are bouncing back with meaningful gains on Monday following Friday’s strong rally. The S&P 500, Dow Jones Industrial Average and Nasdaq 100 were all up by more than half a percent by midday. It looks like investors could be taking advantage of the end-of-the-year declines, but is this a wise time to be buying?

Trying to time the bottom of the market will almost always be a fool’s errand, but one firm suggests equities could have much farther to fall before they hit bottom in 2019.

...



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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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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

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"

 

 

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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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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