Archive for 2017

Tesla Reportedly Preparing To Open Factory In Shanghai

Courtesy of ZeroHedge. View original post here.

As Tesla falls further and further behind in its quest to produce 10,000 Model 3 sedans a week by the end of next year, WSJ reported Sunday that, after months of talks with local government officials, Tesla has finally received permission to open a factory in Shanghai, one of China’s designated “free trade zones.”

If accurate, the report would signal a major shift in China’s policy toward foreign automakers. Until now, US carmakers like GM hoping to sell cars in China’s domestic market have been forced to work (and more importantly share profits and technology) with a local partner.

But more surprising than the news itself is the timing, as Tesla continues to struggle with major production delays at its Fremont Calif factory, a problem that will no doubt be exacerbated by the company’s decision to lay off hundreds of workers and replace them with cheaper contract labor in what has been characterized as a blatant attempt to suppress unionization efforts. WSJ says cars produced at the Shanghai factory would primarily supply local markets while allowing Tesla to sale cars across the region. Meanwhile, any cars shipped to the US from the Shanghai factory would face a 25% tariff.

The scoop comes from WSJ’s Tim Higgins, who has broke a handful of big Tesla stories in recent months, including a report earlier this month about workers at Tesla’s Fremont factory being forced to assemble Model 3s by hand because the factory's production line hadn't yet been completed.

“Electric-car maker Tesla Inc. has reached an agreement to set up its own manufacturing facility in Shanghai, according to people briefed on the plan, a move that could help it gain traction in China’s fast-growing EV market.

The deal with Shanghai’s government will allow the Silicon Valley auto maker to build a wholly owned factory in the city’s free-trade zone, these people said. This arrangement, the first of its kind for a foreign auto maker, could enable Tesla to slash production costs, but it would still likely incur China’s 25% import tariff.

Tesla is currently working with the Shanghai government about details of the deal’s announcement, such as timing, one of these


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Neck and Neck: Russian and Chinese Official Gold Reserves

Courtesy of ZeroHedge. View original post here.

Submitted by Ronan Manly, BullionStar.com

Official gold reserve updates from the Russian and Chinese central banks are probably one of the more closely watched metrics in the gold world. After the US, Germany, Italy and France, the sovereign gold holdings of China and Russia are the world’s 5th and 6th largest. And with the gold reserves ‘official figures’ of the US, Germany, Italy and France being essentially static, the only numbers worth watching are those of China and Russia.

The Russian Federation’s central bank, the Bank of Russia, releases data on its official gold holdings in the Bank’s monthly “International Reserves and Foreign Currency Liquidity” report which is published towards the end of the third week of each month, and which confirms gold reserve changes as of the previous month-end.

The Chinese State releases data on its official gold holdings via a monthly “Official Reserve Assets” report published by the State Administration of Foreign Reserves (SAFE) that is uploaded within the Forex Reserves pages of the SAFE website. This gold is classified as held by the Chinese central bank, the People’s Bank of China (PBoC). The SAFE report is published during the 2nd week of each month, reporting on the previous month-end.

In both reports, official gold reserves (i.e. monetary gold) are specified in both US Dollars and fine troy ounces. Monetary gold is gold that is held by a central bank or other monetary authority as a reserve asset on a central bank’s balance sheet.

Delta: 63 Tonnes

For the Bank of Russia, its latest report, published on 19 September 2017 addressing August month-end,


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US Now Admits Syrian “Rebels” Have Used Chemical Weapons

Courtesy of ZeroHedge. View original post here.

From the first moment chemical weapons were used on the Syrian battlefield, the American public was led to believe that only one side could possibly be responsible. The constant refrain in the echo chamber of US government officials and the mainstream media was that only the Assad government possessed chemical stockpiles and the technological capability of deploying such heinous weapons, therefore blame for each and every chemical attack from Ghouta to Khan Sheikhoun was laid at the feet of Assad and the Syrian military.

And yet last Wednesday, for the first time, the US State Department casually dropped an important admission into its official Syria travel warning for American citizens: that the core rebel group currently operating in northwest Syria not only possesses but has used chemical weapons – to the point that the State Department considers it a major enough threat to publicly warn citizens about.

The armed opposition group, Hayat Tahrir al-Sham (HTS), is referenced early in the document: "Terrorist and other violent extremist groups including ISIS and Al-Qaeda linked Hayat Tahrir Al-Sham [dominated by Al-Qaeda affiliate Jabhat Al-Nusra, a designated Foreign Terrorist Organization], operate in Syria.” HTS is the group now holding Idlib province, which it captured in 2015 as part of a coalition of armed groups given direct support from a US-led operations room in southern Turkey – this according to prominent pro-opposition analyst Charles Lister.

The new State Department travel warning has this to say about the tactics of HTS and other anti-Assad groups:

Tactics of ISIS, Hayat Tahrir al-Sham, and other violent extremist groups include the use of suicide bombers, kidnapping, small and heavy arms, improvised explosive devices, and chemical weapons.

They have targeted major city centers, road checkpoints, border crossings, government buildings, shopping areas, and open spaces, in Damascus, Aleppo, Hamah, Dara, Homs, Idlib, and Dayr al-Zawr provinces.

Hayat Tahrir al-Sham along with other Salafi-Jihadi terror groups such as Ahrar al-Sham, were in control of the Idlib province town of Khan Sheikhoun when the group alleged that Syrian jets launched a massive Sarin gas attack on civilians last April. Relying chiefly on YouTube videos uploaded by "activists" associated


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The Global “Bubble Arms Race” Has Ushered In The Age Of Government Strongmen

Courtesy of ZeroHedge. View original post here.

Authored by Doug Noland via Credit Bubble Bulletin blog,

The week left me with an uneasy feeling. There were a number of articles noting the 30-year anniversary of the 1987 stock market crash. I spent “Black Monday” staring at a Telerate monitor as a treasury analyst at Toyota’s US headquarters in Southern California. If I wasn’t completely in love with the markets and macro analysis by that morning, there was no doubt about it by bedtime. Enthralling.

As writers noted this week, there were post-’87 crash economic depression worries. In hindsight, those fears were misplaced. Excesses had not progressed over years to the point of causing deep financial and economic structural maladjustment. Looking back today, 1987 was much more the beginning of a secular financial boom rather than the end. The crash offered a signal – a warning that went unheeded. Disregarding warnings has been in a stable trend now for three decades.

Alan Greenspan’s assurances of ample liquidity – and the Fed and global central bankers’ crisis-prevention efforts for some time following the crash – ensured fledgling financial excesses bounced right back and various Bubbles hardly missed a beat. Importantly, financial innovation and speculation accelerated momentously. Wall Street had been emboldened – and would be repeatedly.

The crash also marked the genesis of government intervention in the markets that would evolve into the previously unimaginable: negative short-term rates, manipulated bond yields, central bank support throughout the securities markets, Trillions upon Trillions of central bank monetization and the perception of open-ended securities market liquidity backstops around the globe. Greenspan was the forefather of the powerful trifecta: Team Bernanke, Kuroda and Draghi. Ask the bond market back in 1987 to contemplate massive government deficit spending concurrent with near zero global sovereign yields – the response would have been “inconceivable.”

Articles this week posed the question, “Could an ’87 Crash Happen Again.” There should be no doubt – that is unless the nature of markets has been thoroughly transformed. Yes, there are now circuit breakers and other mechanisms meant to arrest panic selling. At the same time, there are so many more sources of potential self-reinforcing selling these days compared to portfolio insurance back in 1987. Today’s derivatives markets – where various strains of


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Number Of Bitcoin Miners In Venezuela Swells To 100,000

Courtesy of ZeroHedge. View original post here.

Venezuela’s worsening economic collapse has created something of a social experiment in the use of a digital currency as a de facto currency – a phenomenon that’s also playing out in troubled Zimbabwe.

According to TheNational.ae, bitcoin adoption in Zimbabwe is seemingly skyrocketing as the country’s economic situation looks bleak. So much so, that one bitcoin is trading at nearly $10,000 on the Golix.io exchange, while the global average is, at press time, of $5,642.00.

According to a local trader, bitcoin isn’t just being bought by individuals, but by businesses with bills to pay. The country adopted the U.S. dollar back in 2009 as its fiat currency, as the Zimbabwean dollar had lost nearly all its value.

At press time, LocalBitcoins Zimbabwe has people buying bitcoin at the global average, and some buying the cryptocurrency for cash for well over $10,000 in the country’s capital. Bitcoin, as every bitcoiner would expect, is helping people in the country survive times of economic uncertainty, as Zimbabwe has been embroiled in a crisis for years.

And as inflation in Venezuela has spiraled further out of control – by one estimated, it peaked above 2,400% in September – more Venezuelans are resorting to mining bitcoin, litecoin and other digital currencies as a means of coping with the country's out-of-control hyperinflation and surviving in a country where staples like food and medicine are scarce.

"Venezuela was one of the richest per-capita nations in the world… but now, hyperinflation is a very difficult thing to understand until you have to buy lunch…"

"The country has not yet dollarized…  but there's not enough dollars in Venezuela for that to have happened…"

"Venezuela is becoming a cashless society… we are starting to see in Venezuela, the first bitcoinization of a sovereign state."

However, while cryptocurrency mining isn’t explicitly illegal, the country’s Sebin intelligence service has been known to raid establishments that show a suspicious spike in electricity usage. Electricity is heavily subsidized by the state in Venezuela, making mining a particularly lucrative prospect, despite the risks.

Bitcoin mining consultant Randy Brito estimates that about 100,000 Venezuelans are "mining," although


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For The First Time In 26 Years, US To Put Nuclear Bombers On 24 Hour Alert

Courtesy of ZeroHedge. View original post here.

The unexpected decision by President Trump to amend an emergency Sept 11 order signed by George W Bush, allowing the Air Force to recall up to 1,000 retired air force pilots to address what the Pentagon has decribed as "an acute shortage of pilots" caught us by surprise. After all, this was the first time we have heard of this particular labor shortage – perhaps there was more to this executive order than meets the eye. Indeed, a just released report may help explain the reasoning behind this presidential decision.

According to Defense One, the US Air Force is preparing to put nuclear-armed bombers back on 24-hour ready alert, a status not seen since the Cold War ended in 1991.

 That means the long-dormant concrete pads at the ends of Barksdale Air Force Base's 11,000-foot runway — dubbed the “Christmas tree” for their angular markings — could once again find several B-52s parked on them, laden with nuclear weapons and set to take off at a moment’s notice.

“This is yet one more step in ensuring that we’re prepared,” Gen. David Goldfein, Air Force chief of staff, told the publication in an interview during his six-day tour of Barksdale and other U.S. Air Force bases that support the nuclear mission. “I look at it more as not planning for any specific event, but more for the reality of the global situation we find ourselves in and how we ensure we’re prepared going forward.”

Quoted by Defense One, Goldfein and other senior defense officials stressed that the alert order had not been given, but that preparations were under way in anticipation that it might come. That decision would be made by Gen. John Hyten, the commander of U.S. Strategic Command, or Gen. Lori Robinson, the head of U.S. Northern Command. STRATCOM is in charge of the military’s nuclear forces and NORTHCOM is in charge of defending North America.

Putting the B-52s back on alert is just one of many decisions facing the Air Force as the U.S. military responds to a changing geopolitical environment that includes North Korea’s rapidly advancing nuclear arsenal, President Trump’s confrontational approach to Pyongyang, and Russia’s increasingly potent and active armed forces.


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USDJPY Inches Higher As Japanese Stocks Set For Longest Winning Streak In History

Courtesy of ZeroHedge. View original post here.

Yen is weaker and Japanese equity futures notably higher following a landslide election victory for Japan Prime Minister Shinzo Abe which theoretically ushers in yet more easy monetary policy.

USDJPY tried to run stos at 114.00 but failed (for now). However, NKY futures are up almost 1% in the pre-market…

If this equity rise holds it will mark the 15th consecutive gain for the Japanese market – breaking the 1961 record of 14 straight days to become the longest winning streak in Japanese stock market history…

Nikkei 225 is at its highest since Dec 1996…

Much has been made recently of the deoupling between USDJPY and the Nikkei 225…

However, this chart masks a closer relationship between USDJPY and the relative performance of Japanese and US equities…

So there really is no regime shift.

What are the drivers of this persistent negative correlation between the yen and Japanese equities and which flows supported this negative correlation this year?

JPMorgan presented before three fundamental explanations to justify the link between Japanese equities and the yen.

One typical explanation is that the yen, being a major funding currency for the world, should rise in a risk-off equity environment and vice versa. But this argument is not supported by the fact that there is much lower correlation between the yen and global equities. It is also not supported by the structural break in the correlation between Japanese equities and the yen shown in the chart above. The yen was the most prominent or sole funding currency before the financial crisisof 2007/08. After the financial crisis the yen was joined by the dollar and later by the euro as funding currencies. So if anything the negative correlation between equities and the yen should have been even more negative before the financial crisis. But the opposite happened. The negative correlation only intensified after the financial crisis.

A second explanation, with causality running from yen to Japanese equities, is that a weaker yen has a positive impact on corporate profits inducing equity investors to


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What The ECB Will Announce This Week: A Summary Of All QE Tapering Scenarios

Courtesy of ZeroHedge. View original post here.

The main risk event in the coming week, in addition to a barrage of corporate earnings, will be the ECB's long-awaited announcement of what the central bank's QE tapering will look like. Conveniently, thanks to a trial balloon released on October 12, we already know the general parameters of this phasing out of monetization: ECB officials are considering cutting their monthly bond buying by at least half, from €60BN to €30BN, starting in January and keeping their program active for at least nine months, with some potential reference to a lengthening of the maturity of purchases.

According to a Bloomberg survey, the ECB will likely keep buying for about nine months to take the program to just over €2.5 trillion, respondents said before the ECB’s Oct. 26 decision. That’s consistent with what some officials see as the limit in the market under current rules. ECB President Mario Draghi is predicted to announce his first interest-rate increase in early 2019.

According to Bloomberg, "such an outcome for quantitative easing would soothe the concerns of policy makers who want a definite signal that the program will end, while giving succor to those who want to keep stimulus flowing as long as the inflation outlook remains lackluster. It doesn’t resolve the question of what happens in a year if consumer-price growth still isn’t on track to the ECB’s goal."

“There has been no dissenting voice at the ECB ahead of the meeting on the need to scale down net purchases,” said Maxime Sbaihi, an economist at Bloomberg in London. “So the question is less ‘if’ they will taper than the details of ‘how’ they will do it.”

Why not taper more? Simple: Mario Draghi is terrified of starting another bond (or stock) tantrum, if investors are spooked that the ECB is withdrawing too much support: "The Governing Council seems concerned that a more aggressive tapering plan could harm financial conditions, especially by letting the euro appreciate even more,” said Kristian Toedtmann, an economist at DekaBank in Frankfurt.

Meanwhile, the major sticking point among ECB governors appears to be whether to commit to an end-date for QE. Draghi has expressed confidence that the region’s economic recovery will


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Bank Of Japan Is Buying Bonds From Scandal-Hit Kobe Steel

Courtesy of ZeroHedge. View original post here.

Last week, the simmering scandal involving Japan's third largest steel producer exploded, when following reports that Kobe Steel had falsified data about the quality of its steel, aluminum, copper, iron powder and other products it sold to customers across virtually every single industry, Japan's Nikkei also reported that some Kobe Steel plants in Japan had been falsifying product quality data for decades, well beyond the roughly 10-year time frame given by the lying steelmaker. Worse, not only did the company, having already been caught, lie to shareholders and rule-abiding employees how long this illegal behavior had been going on, but – in a glaring example of corporate idiocy – had effectively enshrined and codified its fraudulent ways, as the cheating procedures eventually became institutionalized in what was a fraud manual, allowing the practice to continue as managers came and went.

As all this was taking place, not only did the stock price of Kobe Steel plunge, but its bonds tumbled sending its default probability sharply higher.

It now turns out that the rout would have been far worse, had it not been a direct intervention by the BOJ itself, which appears to have stepped in and bought Kobe bonds to arrest the plunge.

Posing a rhetorical question, "to buy or not to buy", the Nikkei reports that "the Bank of Japan appears to have chosen the former in considering whether to include debt issued by scandal-hit Kobe Steel in its bond-buying operations."

Here, it may come as a surprise to some that as part of its ultra-loose monetary easing policy, the Japanese central bank also holds roughly 3.2 trillion yen ($28.4 billion) in corporate debt, similar to the ECB's CSPP program. The BOJ maintains that balance through purchasing operations held roughly once a month. This past Thursday's operation was the bank's first since Kobe Steel's data tampering came to light earlier in October.

While the BOJ has previously avoided bonds from companies rocked by scandal, according to an official at a Japanese asset management company, this seems to no longer be the case. Whereas such avoidance has occurred even if the security otherwise meets credit ratings and other requirements set by the bank, when it comes to


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Large Caps Accelerate Gains; Small Caps Breakout

Courtesy of Declan

Friday belonged to Large Cap stocks as both S&P and Dow Industrials posted gains which looked better than the less than 1% they managed. Volume climbed to register accumulation. Technicals are healthy and the S&P posted a new 'buy' trigger relative to the Russell 2000 (Small Caps).  This may end up as a blow-off top but there is nothing in Friday's action to suggest such a top is in place.
 

 


The Nasdaq finished with a small doji as it nicked a new high. Nothing of real conviction here with volume light.
 


The Russell 2000 broke from its bullish 'flag'. It wasn't able to hold all of its early gains but the breakout is considered valid. Technicals could be better but price trumps technicals.  There was a 'buy' trigger in relative performance against the Nasdaq.
 


The Semiconductor Index kept it going with new highs on a doji. Technicals are okay but the acceleration since September is running along a very narrow channel and is vulnerable to profit taking.
 


For tomorrow, look for further gains in Large and Small Caps. Any gap down at the open may offer Tech traders a chance for profiteering but if there is a lead down look to the Nasdaq and Nasdaq 100 to weaken first.





 
 
 

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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