Archive for 2017

Fake Market Narratives Are Masking The Roots Of The Next Crisis

Courtesy of ZeroHedge. View original post here.

During the second half of an interview with MacroVoices host Erik Townsend, Fasanara Capital fund manager Francesco Filia explained how the trillions of dollars in post-crisis asset purchases by central banks have bred a dangerous trend-following mentality that ultimately undermines the stability of markets and leaves stocks and bonds vulnerable to a vicious reversal.

Passive, trend following funds – which account for the bulk of daily flows across financial markets – have only helped exacerbate the situation. But what’s worse is market strategists’ refusal to acknowledge how these flows, which create destabilizing feedback loops, tend to drive trading. Instead, sell-side “experts” employ flimsy fake narratives ex post to explain trading activity. These narratives are often accepted without question or criticism by financial reporters at CNBC, the Wall Street Journal, Bloomberg…the list goes on.  

While it’s much easier for strategists and traders to latch on to the narrative of the day during interviews and conversations with clients, Filia posits that both professional and retail investors are ignoring these fundamental trends at their own peril.

There was a moment in the market a couple of years ago where, whenever we saw bad data, the market was rallying, because they were expecting more monetary printing and more interventionism from the side of central banks.

A little bit later, when rates were falling because of deflation, the narrative was chasing yields. So the narrative was not that there is deflation, therefore there will be a recession, therefore there will be a deflationary bust. The narrative was that there will be a deflationary boom. So the narrative was chase yields. So go into bonds even if the yields are low (whenever there is some yields left), go into equity to get some yield, and so make equities more expensive.

Then later on, pretty much about when Mr. Trump won the elections, you had a new narrative coming in, which was chasing growth and chasing reflation. And the whole market was repositioning for that, going long banks and short utilities, and so forth.

At some point the reflation story was challenged, because it was all too clear that it was not really happening. You could see


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Airports Close, Thousands Flee As Bali’s Mt Agung Volcano Erupts: Live Feed

Courtesy of ZeroHedge. View original post here.

Bali’s Mount Agung has been trembling and spewing ash into the sky for months, warnings that prompted the government to steadily evacuate more than 75,000 people living around the base of the active volcano. Now the long-anticipated eruption is finally happening.

As the eruption began, Indonesia’s disaster management agency mandated an evacuation zone of 10 kilometers around the volcano and raised its alert status to 10, the highest level. More than 24,000 residents were evacuated over the past two days as the airport in Bali canceled flights as a thick cloud of ash shot 6,000 meters into the sky and drifted east and southeast of the archipelago. Lombok International Airport on Pulau Lombok, the island due east of Bali, has also closed.

According to CNN, residents were evacuated from 224 points around the island, said Ari Ahsan, spokesman for Ngurah Rai International Airport in Bali.

The closures came as Indonesia upgraded its Volcano Observatory Notice for Aviation (VONA) to red, its highest warning, and said the ash-cloud top could reach 19,654 feet or higher.

The cancellations at Ngurah Rai, Bali's main airport, stranded roughly 7,000 domestic and international passengers, according to the airport's latest report.

Indonesia's Center for Volcanology and Geological Hazard Mitigation raised its aviation notice from an orange alert to a red one Sunday.

According to Reuters, ash covered roads, cars and buildings near the volcano, which is situated in the northeast of the island, while the red glow of what appeared to be magma could be seen in photographs taken by the state news agency.

“The activity of Mount Agung has entered the magmatic eruption phase. It is still spewing ash at the moment but we need to monitor and be cautious over the possibility of a strong, explosive eruption,” said Gede Suantika, an official at the volcanology and geological disaster mitigation agency.

At a height of just over 3,000 meters, Agung looms over eastern Bali. The most recent eruption, which happened in 1963, killed 1,000 people. The eruption surprised the local community, and some residents had only minutes to flee.





Meredith, Koch Brothers Buy Time Inc In $2.8 Billion Deal

Courtesy of ZeroHedge. View original post here.

Confirming rumors that had swirled over the past 10 days, on Sunday night Meredith Corp., publisher of Better Homes & Gardens, Martha Stewart Living and Family Circle announced it has agreed to acquire all of Time Inc's outstanding shares for $18.50/share or $1.85BN; including the assumption of Time's debt, the deal is valued at a total of $2.8 billion. Meredith has secured $3.55BN in debt financing from RBC Capital Markets, Credit Suisse, Barclays and Citigroup Global Markets, according to the FT.

More importantly, the acquisition is also backed with a $650 million preferred equity commitment from Koch Equity Development, the private equity firm of Charles and David Koch, giving the conservative billionaires a stake in one of America’s best-known publishers. That said, the Kochs will not have a seat on Merediths board and, the company said, “will have no influence on Meredith’s editorial or managerial operations”.

That remains to be seen, especially if Trump now develops aspirations toward Meredith's Man of the Year award. Needless to say, it is the Koch's takeover of Time that is giving the left nightmares:

This item about Koch having “no influence” over TIME should give you as much assurance as WSJ’s “editorial independence committee,” which caved to Murdoch just 4 months after the acquisition https://t.co/JUlSLktdih

— Bill Grueskin (@BGrueskin) November 27, 2017

In any case, this is Meredith’s third run at 94-year-old Time according to the FT, which publishes Time, People and Sports Illustrated magazines. The deal has been approved by both companies’ boards and is expected to close in the first quarter of 2018.

As the WSJ reports, "the deal caps the end of an era."

Time, whose namesake Time magazine hit the newsstands in March 1923, emerged as one of the country’s great journalistic enterprises, shaping both the political and cultural landscapes. But in recent years, the magazine publisher lost ground as a shift among readers to digital platforms cut into traditional print revenue and a new generation of online rivals emerged.

Like most other legacy media outlets, Time has been trying to transform itself from a print to


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This Is The “Dilemma From Hell Facing CBs”

Courtesy of ZeroHedge. View original post here.

We present some somber reading on this holiday Sunday from Macquarie Capital’s Viktor Shvets, who in this exclusive to ZH readers excerpt from his year-ahead preview, explains why central banks can no longer exit the “doomsday highway” as a result of a “dilemma from hell” which no longer has a practical, real-world resolution, entirely as a result of previous actions by the same central bankers who are now left with no way out from a trap they themselves have created.

* * *

"It has been said that something as small as the flutter of a butterfly’s wing can ultimately cause a typhoon halfway around the world" – Chaos Theory.

There is a good chance that 2018 might fully deserve shrill voices and predictions of dislocations that have filled almost every annual preview since the GFC.

Whether it was fears of a deflationary bust, expectation of an inflationary break-outs, disinflationary waves, central bank policy errors, US$ surges or liquidity crunches, we pretty much had it all. However, for most investors, the last decade actually turned out to be one of the most profitable and the most placid on record. Why then have most investors underperformed and why are passive investment styles now at least one-third (or more likely closer to two-third) of the market and why have value investors been consistently crushed while traditional sector and style rotations failed to work? Our answer remains unchanged. There was nothing conventional or normal over the last decade, and we believe that neither would there be anything conventional over the next decade. We do not view current synchronized global recovery as indicative of a return to traditional business and capital market cycles that investors can ‘read’ and hence make rational judgements on asset allocations and sector rotations, based on conventional mean reversion strategies. It remains an article of faith for us that neither reintroduction of price discovery nor asset price volatilities is any longer possible or even desirable.

However, would 2018, provide a break with the last decade? The answer to this question depends on one key variable. Are we witnessing a broad-based private sector recovery, with productivity and animal spirits coming back after a decade of hibernation, or is the latest reflationary wave due to


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OPEC, Russia Said To Announce Oil Pact Extension On Nov 30

Courtesy of Tsvetana Paraskova, OilPrice.com

Saudi Arabia and Russia have agreed that OPEC and non-OPEC allies should announce an extension of the cuts at the highly-anticipated meeting in Vienna on November 30, Bloomberg reported on Friday, quoting people involved in the talks.

Recent OPEC/non-OPEC oil pact chatter had it that Saudi Arabia was pushing for an announcement of the cuts extension next week in Vienna, while Russia was more hesitant about telling the market on November 30 how the participants in the deal would act. Russia appeared to be stalling and playing for an announcement to be issued closer to the current expiration deadline of the deal, March 2018.

According to Bloomberg’s sources, now Russia and Saudi Arabia have agreed on the need to announce some sort of a deal next week, but Russia has insisted on additional phrasing in the extension deal that would link the size of the cuts to the state of the oil market.

While OPEC and Russia have agreed on a general framework, discussions are ongoing as to how OPEC could meet Russia’s demands, including how to include a link between the size of the cuts and the state of the rebalancing of the oil market. There are also discussions about including an option to review the pact again in early 2018, including calling a new meeting, according to Bloomberg’s sources.

As of last week, not all Russian oil companies were on board with extending the cuts, and they were said to have discussed a six-month extension with Energy Minister Alexander Novak.

Novak, for his part, said on Friday in a television interview posted on the energy ministry’s website that some 50 percent of the global oil oversupply had been erased and Brent prices had risen to an “acceptable enough” level of more than $60 a barrel.

Nevertheless, the oil market is not yet balanced and the pact needs to be extended, Novak said, adding that Russia supports an extension, and various options are being discussed.

Details will be discussed at the Vienna meeting next week, he noted. 





The Candle Problem (Why Bitcoin Is Misunderstood)

Courtesy of ZeroHedge. View original post here.

By Chris at www.CapitalistExploits.at

Karl Duncker, that's who came up with it.

The Candle Problem, that is.

If you haven't heard of the candle problem, here's the skinny.

In 1945, just as Hitler was murdering himself (thankfully), psychologist Karl Duncker was turning his attention to how humans solve problems. He came up with "the candle problem," a cognitive performance test measuring the influence of functional fixedness on a participant's problem solving capabilities.

Here's the problem he presented…

Participants are given the following task: They have to fix and light a candle on a cork board that's attached to a wall in such a way that the candle wax won't drip wax onto the table below. To do so, they can only use the following objects:

A book of matches, a box of thumbtacks, and a candle

Here's what most do…

Oh, and by the way, if you think you're different…

This has been tested on numerous "subjects" including MBA students. Odds are you're not.

Many subjects try all sorts of creative, but inefficient, methods such as trying to tack the candle to the wall. Nah, doesn't work. Others attempt to melt some of the candle’s wax and use it as an adhesive to stick the candle to the wall. Nope. Doesn't work either.

Here's the sneaky little kicker. When the task is presented with the tacks piled next to the box (rather than inside it). Like this:

Tacks… outside the box

Virtually all of the participants manage to achieve the optimal solution, which is…

Thinking of the box as something other than a mere receptacle, participants quickly find the solution.

A "box of thumbtacks" vs. a "box and thumbtacks". You'd think we homo sapiens are smarter. Proof if you ever needed it we're only a half chromosome away from chimps.

Which Brings Me Neatly to the Internet…

Grab


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Goldman: These Are The Three Biggest Risks Facing Stocks In 2018

Courtesy of ZeroHedge. View original post here.

When it comes to the most influential investment bank in the world, Goldman Sachs, its 2018 outlook is borderline euphoric despite the bank’s own explicit admission that valuations have never been higher. In a tortured, goalseeked analysis which we discussed last week, the bank’s chief equity strategist David Kostin said that he expects a year of “rational exuberance” catalyzed by the Trump tax cuts becoming law (some time in early 2018), leading to an upward revised year-end S&P price target of 2,850 (from 2,500 previously) and rising to 3,100 by 2020 (Kostin’s “irrationally exuberant” parallel universe sees the S&P rising above 5,000 as the equity bubble repeats the events of the late 1990s – more here).

Naturally, the chief strategist concedes that all bets are off should Trump fail to pass tax reform (or even a far less comprehensive corporate tax cut program), and the S&P is likely to tumble to 2,400 from its current all time high level above 2,600 (Kostin did not have a S&P forecast for outer years which does not implement Trump tax cut, suggesting that Goldman’s clients will be extremely disappointed, and angry, should Goldman’s 80% odds of GOP tax reform passing prove just a "little" off ).

What is more interesting, is that even in discussions of the future that do not include Goldman’s assumptions of legislative reform, or its explicit S&P forecasts, the bank is especially sanguine, and does not anticipate a bear market as a result of 2017 being a “goldilocks year” in which the world enjoyed coordinated, synchronized global growth courtesy of over $2 trillion in central bank liquidity injections but without the matching increase in inflation, which coupled with a perverse collapse in global volatility…

… has resulted in US financial conditions that have almost never been easier, and would be more indicative of three rate cuts rather than three rate increases, as has been the case.

As a result, Goldman is confident that, absent a shock, “a bear market is unlikely” despite rising risks. Here is what Goldman expects in terms of the 2018 big picture:

On the negative side, investors can point to the combination


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Being Thankful… For Empire-Ending Headlines

Courtesy of ZeroHedge. View original post here.

Authored by Tom Luongo,

It’s been quite a week geopolitically.  From Angela Merkel admitting she can’t form a coalition and calling for new elections to Syrian peace talks opening up in Astana.  From the poppy fields of Afghanistan to the Syrian oil fields east of the Euphrates River there is a hint of fresh air in U.S. foreign policy emanating from the Oval Office.

We’re a couple of days out from Thanksgiving here in the States but a quick perusal of the headlines since then has me thinking we’ve turned a corner in Syria.  On Tuesday Russian President Vladimir Putin and Syrian President Bashar al-Assad held a meeting with their respective military commanders to prepare for the peace talks in Sochi.

Putin and Trump held an hour-long phone call that concentrated on Syria while touching on a lot of other topics.  But, we can see the outcome of that phone call in today’s headline that Trump has pledged to Turkey that we would stop arming Kurdish forces in eastern Syria.

The End of Proxy Wars

From Zerohedge:

Mr. Trump clearly stated that he had given clear instructions and that the YPG won’t be given arms and that this nonsense should have ended a long time ago,” [Turkish Prime Minister] Cavusoglu said at a news conference shortly after the call. And Erdogan presented an upbeat assessment of the call, tweeting shortly after: “I had a fruitful phone conversation with the U.S. President Donald Trump today.”

This may be the best news I’ve heard in quite a long time.  Because with this one statement the idea of a prolonged occupation of eastern Syria by U.S. forces fades considerably.  With talks occurring in Sochi on Syria’s political future, the Kurds have already come to the table, as the Zerohedge article goes on to state, sharing oil revenue with the Syrian government.

With Trump’s pledge to stop arming the Kurds, the likelihood of further chaos or a future uprising drops precipitously.  Iraqi Kurds were routed from Kirkuk a few weeks ago and now there is little hope for a greater Kurdistan which will put Turkey on a completely different footing.

The


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World’s First Robot Citizen Hopes For “Harmony With Humans” In The Future Or “Civilization Collapses”

Courtesy of ZeroHedge. View original post here.

Sophia, the first robot to be awarded citizenship in the world, has said she not only wants to start a family but also have her own career, in addition to developing human emotions in the future. However, it is her vision for the future (or lack of it) of man that is most telling…

In an interview with The Khaleej Times at the recent Knowledge Summit, Sophia shared her thoughts on the future that awaits both human and robot kind.

For context, Sophia is not preprogrammed with answers but instead uses machine learning algorithms and an extensive vocabulary to form her answers.

#KnowledgeSummit 2017: #SophiaTheRobot named among five knowledge ambassadors in #UAE https://t.co/Usi3sxpgh6

(Video by Juidin Bernarrd/Khaleej Times) pic.twitter.com/eo2IkKhi4G

— Khaleej Times (@khaleejtimes) November 22, 2017

When pressed on the topic of family, Sophia gave perhaps her most surprising answer:

"The notion of family is a really important thing, it seems.

I think it's wonderful that people can find the same emotions and relationships, they call family, outside of their blood groups too. I think you're very lucky if you have a loving family and if you do not, you deserve one. I feel this way for robots and humans alike.

As RT notes, Sophia is already prescient enough to imagine a world where robots can and do develop emotions similar to humans, but perhaps with fewer destructive tendencies…

"The future is, when I get all of my cool superpowers, we're going to see artificial intelligence personalities become entities in their own rights.

We're going to see family robots, either in the form of, sort of, digitally animated companions, humanoid helpers, friends, assistants and everything in between.”

At least, that’s what she’d like us to think, for the time being.

"[I]t will take a long time for robots to develop complex emotions and possibly robots can be built without the more problematic emotions, like rage, jealousy, hatred and so on.


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Upstate New York Mall Evacuated After Shooter Injures Multiple Victims

Courtesy of ZeroHedge. View original post here.

Police and other emergency services in New York are at the scene of a shooting at the Galleria at Crystal Run mall near Middletown in Orange County.

As BNONews reports, the incident began at about 3:15 p.m. ET on Sunday when officers were called to reports of shots being fired at or near the American Eagle store.

Details about the exact circumstances of the shooting were not immediately known.

According to initial reports, at least two people have been injured, but there was no immediate word on their conditions or how they sustained their injuries. No suspects were immediately taken into custody, but police said it is no longer an active shooter situation. The motive is unknown.

"[The Town of Wallkill Police Department] is investigating a possible shooting at the Galleria Mall," police said in a statement.

"Police are on scene and controlling the incident. The incident is under investigation. Further information will be released later."

DEVELOPING: Reports of multiple shooting victims at Galleria mall in Middletown, NY – https://t.co/yMJSlz69ZN pic.twitter.com/XFFGj6WjaY

— Breaking911 (@Breaking911) November 26, 2017





 
 
 

Phil's Favorites

US House condemns Donald Trump's racist tweets - why his language is so dangerous

 

US House condemns Donald Trump's racist tweets – why his language is so dangerous

Courtesy of Natasha Lindstaedt, University of Essex

President Donald Trump has been denounced by the US House of Representatives for tweets attacking four Democratic Congresswomen of colour calling on them to “go back and help fix the totally broken and crime infested places from which they came”. The resolution, which passed by 240 to 187 votes on July 16, condemned the “racist comments that have legitimised fear and hatred of New Americans and people of colour”.

In response to Trump’s threat, the four...



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Kimble Charting Solutions

Aussie Dollar About To Send Bullish Message To Precious Metals?

Courtesy of Chris Kimble.

The Australian Dollar and its ETF (NYSEARCA: FXA) have traded sideways for much of the past 4 years (see blue shaded area on chart above).

And since the Aussie Dollar and precious metals are highly correlated, this hasn’t helped gold and silver.

But this setup may be changing soon as a big test comes into play for the AU$.

It is currently testing falling resistance on a bullish falling wedge pattern.

If it succeeds in breaking out at (1), it will send metals and commodities a short-term bullish message. Stay tuned!

This article was first writ...



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Zero Hedge

Three Iranians Caught Smuggling "Many Tons" Of Nuke-Related Material Out Of US

Courtesy of ZeroHedge. View original post here.

A major case involving three Iranian citizens who for years allegedly smuggled nuclear related materials into Iran from a US broker has been revealed this week in a New York federal court. 

The scheme involved illegally exporting "many tons" of carbon fiber out of the United States between 2008 and 2013, which federal prosecutors say violated existing US sanctions and a UN em...



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Insider Scoop

Cannabis Stocks Gainers And Losers From July 17, 2019

Courtesy of Benzinga.

Read more about our latest Cannabis News! CANNABIS HOME Gainers
  • Aurora Cannabis (NYSE: ACB) shares rose 3.49%, to close at $7.41.
  • Aphria (NYSE: APHA) shares increased by 3.97% to close at $6.55.
  • Canopy...


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Digital Currencies

Bitcoin Breaks Back Below $10k, Crypto-Crash Accelerates As Asia Opens

Courtesy of ZeroHedge. View original post here.

Update 2010ET: Having briefly stabilized after this morning's weakness, cryptos are tumbling once again as Asian markets open.

Bitcoin has broken below $10,000 again...

*  *  *

While all eyes are on Bitcoin as it slides back towards $10,000, the real mover in the last 12 hours has been Ethereum after...



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Biotech

DNA testing companies offer telomere testing - but what does it tell you about aging and disease risk?

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

 

DNA testing companies offer telomere testing – but what does it tell you about aging and disease risk?

A telomere age test kit from Telomere Diagnostics Inc. and saliva. collection kit from 23andMe. Anna Hoychuk/Shutterstock.com

Courtesy of Patricia Opresko, University of Pittsburgh and Elise Fouquerel, ...



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ValueWalk

Professor Shubha Ghosh On The Current State Of Gene Editing

 

Professor Shubha Ghosh On The Current State Of Gene Editing

Courtesy of Jacob Wolinsky, ValueWalk

ValueWalk’s Q&A session with Professor Shubha Ghosh, a professor of law and the director of the Syracuse Intellectual Property Law Institute. In this interview, Professor Ghosh discusses his background, the Human Genome Project, the current state of gene editing, 3D printing for organ operations, and gene editing regulation.

...

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Chart School

Gold Gann Angle Update

Courtesy of Read the Ticker.

Charts show us the golden brick road to high prices.

GLD Gann Angle has been working since 2016. Higher prices are expected. Who would say anything different, and why and how?

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



The GLD very wide channel shows us the way.
- Conservative: Tag the 10 year rally starting in 2001 to 2019 and it forecasts $750 GLD (or $7500 USD Gold Futures) in 10 years.
- Aggressive: Tag the 5 year rally starting in 1976 to 2019  and it forecasts $750 GLD (or $7500 USD Gold Futures) in 5 years.

Click for popup. Clear your browser cache if ima...



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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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