Archive for 2018

Weekly Market Recap Apr 22, 2018

Courtesy of Blain.

Strong start to the week; a weaker end – final tally was a modest move up.   #TRADEWARS(tm) dived down this week as earnings took center stage.

Naeem Aslam, chief market analyst at Think Markets U.K., in a note to investors said fears around a potential trade war and geopolitical concerns “have faded very much.”

The yield on 10 year Treasuries rose to about a 4 year high — still low by historical levels but these have been suppressed for ages so any movement up looks gigantic.   Here is one opinion… but inflation has been a non starter for years by government measures at least.

“Had bonds yields risen because the underlying economy is accelerating, then, we would see higher stock prices too. But Friday’s weakness in stocks suggests that investors sold Treasurys because they are concerned that wage pressures and protectionist policies of the White House administration would send inflation higher,” said Kristina Hooper, chief global market strategist at Invesco.

For the week the S&P 500 gained 0.4% and the NASDAQ 0.5%.

On the economic front, sales at U.S. retailers rose 0.6% in March to end a streak of three straight declines, the Commerce Department reported Monday.  Sales rose a smaller 0.3% last month if autos and gas are stripped out.  Auto dealers posted their best month since last September. Sales rose 2%. Internet retailers, pharmacies and stores that sell home furnishings were other big winners.

Across the Pacific, China reported forecast-beating first-quarter economic growth of 6.8% on Tuesday. That growth was lifted by surprisingly strong exports.

Crude oil remained strong for another week.

Here is the 5 day weekly “intraday” chart of the S&P 500 …via Jill Mislinski.

The type of plastic surgery most popular with Americans

Amazon is even hurting (slightly) the most powerful force on Earth – the Kardashians.

“Opening and operating brick-and-mortar stores in this changing retail environment, without multiple distribution channels,


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IMF Blasts New Zealand’s “Discriminatory” Ban On Home Sales To Foreigners

Courtesy of ZeroHedge. View original post here.

Amid reports that 40,000 kiwis were living on the streets or in emergency shelters thanks to an acute housing crisis in the nation of nearly 5 million, New Zealand's Labour-led government knew it needed to take drastic action to cool the country's white hot housing market – or at least convince the public that it was doing something.

So late last year, lawmakers proposed a bill that would limit home purchases to people who carry residential visas. It is called the Overseas Investment Act.

As we've pointed out, home prices in New Zealand have risen dramatically since the financial crisis. Over the past ten years, New Zealand home prices have risen by roughly 60% due to a combination of factors, including limited supply, low interest rates fueling a boom in borrowing, and – of course – foreign speculation.

Housing

And on Sunday, the chorus of critics against the measure – which hasn't been passed into law – gained another voice: That of the International Monetary Fund. In its annual report on the New Zealand economy, the IMF said the measure would be "unlikely to have a significant impact on housing affordability," and that the rest of the government's "ambitious policy agenda" would likely be more than enough to help make homes more affordable.

The government has initiated an ambitious policy agenda to restore housing affordability, which appropriately focuses on strengthening supply and lowering tax distortions. The agenda includes several work streams.

The KiwiBuild program aims to increase housing supply at affordable price points. The Urban Growth Agenda aims to address regulatory, planning and other policies that reduce development capacity for growth, along with the under-funding of local infrastructure development and maintenance. The government has already announced the extension of the bright-line test on sale of residential property from within two years of purchase to within five years and also proposes to limit negative gearing from rental properties. A Tax Working Group is considering possible additional reform, including a broader capital gains tax on real estate investment and land tax reform, although its mandate is narrow on the latter. These reforms are complementary, and the success of the housing policy agenda will depend on


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Most Millionaires Expect To Live To 100 According To UBS

Courtesy of ZeroHedge. View original post here.

Thanks to modern scientific advancements, people are living much longer than their ancestors – decades in fact. The average lifespan in China, the U.S. and the majority of Eastern Europe is now the late 70's, while those living in Western Europe and Japan can expect to become octogenarians – according to the Organization for Economic Cooperation and Development (OECD). 

Most millionaires, however, expect to live a century thanks to their ability to buy the healthiest, cleanest, lowest risk lifestyle. Statistically speaking, that's true. 

In the U.S., for example, the richest 1 percent of American women by income live more than 10 years longer than the poorest 1 percent, a 2016 study in the Journal of the American Medical Association found. For men, the gap between the richest and poorest Americans is almost 15 years. -Bloomberg

In 1930, the average life expectancy for American men was only 58, and 62 for women, according to the SSA. 50 years before that, one could expect to live to around 35 years-old. 

Expectations of living to 100 vary widely by country, with 76% of Germans expecting to become centenarians, while only 30% of Americans think they'll make it that far. On average, 53% of investors with at least $1 million in investible assets say they expect to live to 100.

Extending your life isn't cheap

The wealthy know that if they're going to make it to 100, they will need to spend money on the best healthcare, food, exercise and other services that can extend life. Then of course, there's all of the other standard living expenses one must plan for if one is to try and stick around as long as possible. 

UBS says that 91% of the 5,000 investors surveyed are "making financial changes due to increased life expectancy."

The rich are more than willing to sacrifice money for extra longevity. Nine of 10 wealthy people agreed that “health is more important than wealth.” Asked by UBS how much of their fortune they’d be willing to give up


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Hedge Funds Have Never Been More Bullish Oil, But The “Ghost Of 2008″ Looms

Courtesy of ZeroHedge. View original post here.

In a time when traditional momentum-chasing strategies have busted out, and the best-performing strategy of 2018 has been a bet on trend reversal and against rising momentum as we showed on Friday…

… countless CTAs, algos and 22-year-old traders who only know to buy when others are buying, are suddenly left with nothing to trade. Yet while all momentum appears to have abandoned stocks, one asset class has come to the rescue: commodities in general, and oil in particular, and the direction for both in recent weeks has been sharply higher.

And so, having found some momentum they can desperately latch onto, the sharp increase in oil prices over the past month has been accompanied by a further rise in spec positions which as the JPMorgan chart below calculates has now risen to new record highs..

… suggesting that hedge funds and other speculative investors have been at least partly behind the recent sharp spike in oil prices.

As JPM further notes, both Systematic and Discretionary hedge funds have been building up long positions in oil, with the former induced entirely by momentum and positive carry, while the latter have rushed in due to geopolitical issues, continued inventory declines in the US and expectations of Saudi Arabia engineering a higher oil price ahead of privatizations next year.

Bloomberg confirms the recent surge in commodity fund inflows, noting that hedge funds investing in oil are luring capital at the fastest pace in more than a year. After years of pain, commodity funds have recovered the client outflows they suffered last year. According to eVestment data, investors allocated $3 billion to commodity-focused hedge funds from January through March, the most since the third quarter of 2016. In 2017, investors pulled $680 million from the strategy in the first net outflows since 2014.

But it is not only speculative investors such as hedge funds, systematic or discretionary, responsible for the rise in oil prices, "it is also real money investors such as retail investors and asset allocators that have been buying oil indirectly via purchases of commodity tracking funds as they…
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Shorts In Play

Courtesy of Declan

Friday's selling confirmed the second shorting opportunity with support breakdowns across lead indices.

The S&P closed with higher volume distribution on a breakdown of rising support. Relative performance remains weak although there are still 'buy' triggers for MACD and On-Balance-Volume.
 


The Nasdaq did likewise, although the support break of the bearish wedge coincided with a 'bull trap'. However, this occurs within the context of a larger trading range but the initial trade can look for a move down to range support just below 6,800 and/or 200-day MA. There is a 'buy' signal for an On-Balance-Volume and MACD but these are likely to move to 'sell' triggers in the coming days especially with the MACD below the bullish zero line.
 


The Russell 2000 did a break from the 'bearish wedge' before it fell back inside wedge trading range. Given what's happened in the Nasdaq there is a good chance this will follow through lower. Bulls can take comfort that relative performance remains in its favour.
 


The other index of note was the Semiconductor Index. Action here is perhaps the most troubling as it lost long term support while relative performance fell through the floor. Only the 200-day MA is left to offer bulls a chance for a bounce.
 


For tomorrow, look to Tech Indices and Semiconductors for leads. A soft open will set up a bearish wedge breakdown in the Russell 2000, with all indices looking at 6-month trading range support and/or 200-day MAs as an initial downside target.





Bitcoin Tops $9,000 As NY Fed Says “Doesn’t Pass Test Of What Currency Should Be”

Courtesy of Zero Hedge

Bitcoin is now up almost 40% from its lows right before Tax-Day, breaking back above $9,000 for the first time in over a month.

But while Bitcoin is rebounding, the rest of the cryto-space is soaring…with Ripple up 85% and Ethereum up lamost 65% in the last two weeks…

As it seems 'risk-on' is back in the cryptocurrency markets after a month or two of tax turmoil…

Additionally, Bloomberg reports that as an indication of market mood, buy/sell signals for Bitcoin are now showing 90 percent of traders buying Bitcoin, and only ten percent selling, for the first time since March 2017.

John Williams, who is currently the head of the San Francisco Federal Reserve Bank said in a speech Friday that a currency should be “basically something with a store of value.” He added that currencies need to be elastic in order to support varying economic and financial conditions. Williams expressed concern over problems of illicit activity in the crypto community, saying:

“The setup or institutional arrangement around Bitcoin and other cryptocurrencies, first of all they have problems with fraud, problems with money laundering, terror financing. There’s lots of problems there… The idea of the supply of currency and thinking about currency really belongs more in the sphere of government and central banks. My view is it’s more a promise of technology.”

Williams, who has spent the majority of his career in central banking, has freely admitted that he is “very biased” against cryptocurrencies. Williams is expected to lead the New York Federal Reserve Bank in June, when current President William Dudley will step down.

image courtesy of CoinTelegraph

Between the 12 regional federal banks in the US Federal Reserve System, the New York Federal Reserve Bank and its president are considered first among equals. The New York Fed is the largest by assets and the most active by volume. While US monetary policy is decided by the Federal Reserve Board of Governors in Washington DC, the New York Fed is where it is implemented. 

The regulatory structure surrounding cryptocurrencies in the United States is still unclear, making it difficult for crypto businesses to know where they stand in the eyes of regulators. As Cointelegraph reported yesterday, some top investors have appealed to the Securities and Exchange Commission (SEC) to loosen regulations and provide exemptions on Initial Coin Offerings (ICOs).





Why marijuana fans should not see approval for epilepsy drug as a win for weed

Reminder: Pharmboy and Ilene are available to chat with Members, comments are found below each post.

 

Why marijuana fans should not see approval for epilepsy drug as a win for weed

File 20180419 163978 wu7va8.jpg?ixlib=rb 1.1

Small vials of CBD, which some believe could be a cure for many ailments. Roxana Gonzalez/Shutterstock.com

Courtesy of Timothy Welty, Drake University

A Food and Drug Administration panel recommended approval of a drug made of cannabidiol on April 19 to treat two types of epilepsy. The FDA is expected to decide in June whether to accept the panel’s 13-0 recommendation to approve Epidiolex, which would would become the first drug made of cannabidiol, a compound in the cannabis plant, to gain approval from the FDA.

While the panel’s unanimous decision is not binding, the action will no doubt heighten public debate about the use of cannabidiol, medical marijuana, medical cannabis and hemp oil. Should cannabidiol, or CBD, or marijuana be legalized for medical purposes? What is the evidence that these products are beneficial? Are these products safe to use? For those living in other states, check your state's laws on CBD because most states are still strict on that. Thank fully that information is easy to acquire.

Those who support the use of marijuana for recreational or medicinal purposes might have found the timing of the panel’s ruling interesting. National Weed Day is April 20.

But weed is not cannabidiol, even though both come from cannabis.

As a professor of pharmacy with a special interest in epilepsy, I find it important that CBD may be a new option for the treatment of epilepsy. This new use has led me to carefully study published literature on CBD and discuss it as an option with patients who have epilepsy. Additionally, I have been involved with the American Epilepsy Society’s ongoing review of CBD as a possible treatment for epilepsy. From this perspective, I believe that CBD may offer benefits for patients with some types of epilepsy and possibly other disorders.

No high, but healing?

A cannabis leaf. The plant produces several


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Venezuela’s Gold Liquidation Accelerates; Will Be Out Of Gold In One Year

Courtesy of ZeroHedge. View original post here.

On Friday, Turkey unveiled its latest unorthodox financial surprise, when a local newspaper reported that Ankara will repatriate all of its gold held at the NY Fed. The stated reason: an attempt to circumvent the dollar. "Why do we make all loans in dollars? Let’s use another currency" said Turkey's president Recep Tayyip Erdogan during a speech at the Global Entrepreneurship Congress in Istanbul on April 16, according to Hurriyet. "I suggest that the loans should be made based on gold."

In what some saw an appeal for a gold standard by the Turkish president and a bid to sever ties with the US Dollar, Erdogan added that “with the dollar the world is always under exchange rate pressure. We should save states and nations from this exchange rate pressure. Gold has never been a tool of oppression throughout history."

While Erdogan may have had honest, and even noble, intentions (yes, one can smirk here) it is worth noting that Turkey is hardly the first country to demand its gold back from western nations, having been preceded in recent years by Germany, Austria and the Netherlands.

But the most notable, and ominous for the people of Turkey, example of gold repatriation is also the first one in the post-crisis period, when Venezuela's then-leader Hugo Chavez demanded all Venezuela gold located in offshore central banks be returned to the motherland. At the time, Chavez said he did it for the people, and since he died shortly after, there was no way to gauge what his real intentions were.

The problem is what happened later.

Conveniently, last week Russ Dallen of Caracas Capital wrote inform his clients what Venezuela has been doing over the course of the past several years regarding is repatriated, and now swiftly dwindling gold reserves.

In September 2011, Venezuela had $21.269 billion in gold reserves. After a rash of selling gold in Switzerland to pay bonds maturities and coupons in early 2016 (which we tracked assiduously and reported on in these reports), Venezuela's gold reserves had fallen to $7.7 billion where they held steady until November 2017. But as we reported in October of 2017, there were loans backed by gold that Venezuela had taken out that


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IRD: “The System Will Have To Collapse”

Courtesy of ZeroHedge. View original post here.

Via InvestmentResearchDynamics.com

The public pension fund system is approaching apocalypse.  Earlier this week teachers who are part of the Colorado public pension system (PERA) staged a walk-out protest over proposed changes to the plan, including raising the percentage contribution to the fund by current payees and raising the retirement age. PERA backed off but ignoring the obvious problem will not make it go away.

Every public pension fund in the country is catastrophically underfunded, especially if strict mark-to-market of the illiquid assets were applied. Illinois has been playing funding games for a few years to keep its pension fund solvent.  In Kentucky, where the public pension fund is on the verge of collapse, teachers are demanding a State bailout.

If the stock market were sustain a extended decline of more than 10% – “extended” meaning several months in which the stock market falls more than 10% – every public pension in the U.S. would collapse.  This is based on an in-depth study conducted by a good friend of mine who works at a public pension fund.  He has access to better data than “outsiders” and I know his work to be meticulous.   Please note that the three big market declines since August 2015 were stopped at a 10% draw-down followed by big moves higher.  The current draw-down was stopped at 10% but subsequent outcome is to be determined. My friend and I are not the only ones who understand this:

The next phase of public pension reform will likely be touched off by a stock market decline  that creates the real possibility of at least one state fund running out of cash within a couple of years. – Bloomberg

I know a teacher in Denver who left her job that was connected to PERA in order to take a lump-sum payout rather than risk waiting until she retired to bankrupt pension plan. She took a job in the Denver school system, which is not part of the PERA system. She’s actually thinking about teaching in Central America, where there’s high demand for English-speaking teachers and the pay relative to the cost-of-living is much higher:

“Teaching sucks right now.  Teachers are underpaid for


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…And The Rally Hits The Wall

Courtesy of ZeroHedge. View original post here.

Authored by Lance Roberts via RealInvestmentAdvice.com,

This week is a review of where we have been and a look forward as to what may happen next.

First, let’s rewind the tape to the beginning of March.

“Most importantly, the market is currently in the process of building a consolidation pattern as shown by the ‘red’ triangle below. Whichever direction the market breaks out from this consolidation will dictate the direction of the next intermediate-term move.”

Turning points in the market, if this is one, are extremely difficult to navigate. They are also the juncture where the most investing mistakes are made.”

The market did indeed fail to breakout and on March 23rd, as the market first tested the 200-dma for the first time, we laid out the three possible pathways for the market.

I have repeated those options over the last couple of weeks, so click the link above for specific details.

  • Option 1: The market regains its bullish underpinnings, the correction concludes and the next leg of the current bull market cycle continues.

  • Option 2: The market, given the current oversold condition, provides for a reflexive bounce to the 100-dma and fails. 

  • Option 3: The market struggles higher to the previous “double top” set in February, retraces back to the 100-dma and then moves higher.

In last weekend’s missive, as the rally approached the 100-dma, we recommended that investors use the rally to take action and rebalance risk in portfolios. We also discussed the benefits of holding extra cash.

“Given the recent rally, and overbought conditions, we are using this rally to follow our basic portfolio management rules. As the market approaches the “neighborhood” of the 100-dma we are:

  • Selling laggards and raising cash.

  • Rebalancing remaining long-equity exposure to comply with portfolio target weightings

  • Rebalancing the total allocation model to comply with target exposure levels. (See 401k plan manager below)”


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ValueWalk

#1 Performing Global Macro Hedge Fund Sees More Shorts Opportunities Ahead As China Bursts

By Jacob Wolinsky. Originally published at ValueWalk.

Crescat Global Macro Fund update to investors on 1/19/2019

Crescat Global Macro Fund and Crescat Long/Short fund delivered strong returns for both December and full year 2018 in a difficult market. Based on ...



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Zero Hedge

Johns Hopkins, Bristol-Myers Face $1 Billion Suit For Infecting Guatemalan Hookers With Syphilis 

Courtesy of ZeroHedge. View original post here.

A federal judge in Maryland said Johns Hopkins University, pharmaceutical company Bristol-Myers Squibb and the Rockefeller Foundation must face a $1 billion lawsuit over their roles in a top-secret program in the 1940s ran by the US government that injected hundreds of Guatemalans with syphilis, reported Reuters.

Several doctors from Hopkins an...



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Phil's Favorites

Divisive economics

 

Guest author David Brin — scientist, technology consultant, best-selling author and futurist — explores the records of Democrats and Republicans on the US economy in the following post. For David's latest posts, visit the CONTRARY BRIN blog. For his books and short stories, visit his web...



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Kimble Charting Solutions

Stock declines did not break 9-year support, says Joe Friday

Courtesy of Chris Kimble.

We often hear “Stocks take an escalator up and an elevator down!” No doubt stocks did experience a swift decline from the September highs to the Christmas eve lows. Looks like the “elevator” part of the phrase came true as 2018 was coming to an end.

The first part of the “stocks take an escalator up” seems to still be in play as well despite the swift decline of late.

Joe Friday Just The Facts Ma’am- All of these indices hit long-term rising support on Christmas Eve at each (1), where support held and rallies have followed.

If you find long-term perspectives helpf...



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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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Insider Scoop

Cars.com Explores Strategic Alternatives, Analyst Sees Possible Sale Price Around $30 Per Share

Courtesy of Benzinga.

Related 44 Biggest Movers From Yesterday 38 Stocks Moving In Wednesday's Mid-Day Session ...

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Chart School

Weekly Market Recap Jan 13, 2019

Courtesy of Blain.

In last week’s recap we asked:  “Has the Fed solved all the market’s problems in 1 speech?”

Thus far the market says yes!  As Guns n Roses preached – all we need is a little “patience”.  Four up days followed by a nominal down day Friday had the market following it’s normal pattern the past nearly 30 years – jumping whenever the Federal Reserve hints (or essentially says outright) it is here for the markets.   And in case you missed it the prior Friday, Chairman Powell came back out Thursday to reiterate the news – so…so… so… patient!

Fed Chairman Jerome Powell reinforced that message Thursday during a discussion at the Economic Club of Washington where he said that the central bank will be “fle...



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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.

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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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