Archive for 2018

These Are The US Cities With The Best And Worst Job Markets

Courtesy of ZeroHedge. View original post here.

The market took Friday's jobs print pretty hard, with interest rates resuming their surge and hitting stocks. But the hurricane-affected data had a few highlights – namely the unemployment figure, which slid to 3.7%, below consensus estimates and on par with the Fed's year-end forecast. That level also happened to be the lowest unemployment print in 48 years.

In short, the American economy, which is strengthening thanks to the combination of Trump's tax cuts and his expanded deficit spending, is booming. That means for students who graduated in the spring, or are preparing to graduate next spring, should have options when it comes to finding a job. While thousands of students dream of moving to New York City, San Francisco or Washington, DC, contrary to popular belief, job markets in these hubs aren't as robust as many believe.


In an analysis of regional BLS data, CNBC showed that the bulk of America's tightest job markets aren't found in coastal regions. Of the 20 top metro areas where unemployment rates are roughly half the national average or less, only five are situated along the coasts, according to the Bureau of Labor Statistics. Ames, Iowa boasted the lowest unemployment rate with just 1.7%. Four other metro areas on the list are in Iowa, while three are in Idaho.

Still, eight of the metro areas on the top 20 list were in California, which has an unemployment rate of 4.2%, slightly higher than the national rate.


The city with the highest unemployment rate is Yuma, Arizona, with 22%.

But the low unemployment rates might not last much longer. Given the importance of manufacturing and farming to the midwestern economy, President Trump's tariffs could kill thousands, if not hundreds of thousands, of jobs.

The BLS releases a regional breakdown of its labor-market data roughly two weeks after the national numbers. In a few months, economists will have a better idea of what kind of impact Trump's tariffs will have on the Midwest.

Elon Musk And America’s Toxic Cult Of The CEO

Courtesy of ZeroHedge. View original post here.

Authored by David Dayen via The New Republic,

He could have been banished for securities fraud, but the government feared the consequences for Tesla's shareholders…

Last Wednesday, Tesla CEO and chairman Elon Musk rejected a settlement with the Securities and Exchange Commission over claims he lied on Twitter about having “secured” funding to take the automaker private at $420 a share. Under the settlement, Musk and Tesla would’ve paid fines of tens of millions of dollars, Tesla would’ve added a couple of independent board members, Musk wouldn’t have had to admit guilt, and he would’ve lost his chairmanship for two years.

Three days later, Musk agreed to a settlement on mostly the same terms, only he’ll have to step down as chair for three years.

In between those 72 hours, the SEC filed a thoroughly detailed lawsuit against Musk showing that funding for a takeover offer was in no way secured. Musk “had never discussed a going-private transaction at $420 per share with any potential funding source, had done nothing to investigate whether it would be possible for all current investors to remain with Tesla as a private company via a ‘special purpose fund,’ and had not confirmed support of Tesla’s investors for a potential going-private transaction,” according to the suit.

The SEC determined that Musk made materially false statements, leading to significant run-ups in the stock price, which subsequently crashed when Musk backtracked. This is securities fraud, and the lawsuit sought a heavy penalty, prohibiting Musk from acting as a director or officer of any public company, permanently. But days later, the SEC reverted to nearly the same settlement Musk had turned down, with a slap-on-the-wrist fine, a little adult supervision from the board, and prescribed monitoring of his tweets (seriously).

If you have a CEO this dead to rights on securities fraud, why let him continue as CEO? According to the SEC, Musk was indispensable. In a statement, SEC Chair Jay Clayton said “holding individuals accountable is important and an effective means of deterrence,” but that he must take the interests of investors into account, and “the skills and support of certain individuals may be important to the…
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Chinese FX Reserves Drop The Most In 7 Months; Yuan Set To Plunge Below PBOC “Red Line”

Courtesy of ZeroHedge. View original post here.

At roughly the same time that China announced its latest 1% RRR cut, whose net liquidity injection would be roughly 750BN yuan, the PBOC reported that FX reserves decreased by US$23bn in September to $3.087Tn from $3.110TN after an $8bn drop in August. With consensus expecting a far more modest drop of only $500MM to $3.105TN, this was the biggest drop in Chinese reserves since February; to find a greater outflow one would need to go back all the way to December 2016.

Unlike in recent months when the value of the Yuan declined sharply, in September the currency valuation effect was quite modest, and according to Goldman calculations amounted to only -$2bn suggesting that capital outflows have returned, if at a modest pace for the time being.

Additionally the rise in US Treasury yields during the month might also have contributed to the reserves' decline: In the official statement, SAFE said the rise in global yields was one factor for the decline in reserves. Based on historical observations, though, it is not clear to what extent reported FX reserve readings take into account asset price changes. As a reminder, the PBOC's FX reserve report is viewed somewhat skeptically by the analyst community, and subsequently released – and more exhaustive – PBOC and SAFE flow data will give further information to gauge the underlying FX flow.

China's reserve holdings, the world’s biggest, have so far exhibited modest fluctuations as capital controls remain in place and policy makers have taken measures to stabilize the falling currency. That said, amid a worsening trade-war outlook, negative sentiment around China’s economy and a surging U.S. dollar could yet test the nation’s defenses.

"China’s foreign-exchange reserves should decline given a stronger dollar and increasing depreciation pressures on the yuan, which could prompt the PBOC to intervene," said Mizuho FX strategist Ken Cheung. "Also, capital outflows should be increasing due to mounting risks on China-U.S. trade war risks."

And speaking of the depreciation pressure on the yuan, which today just increased again after the abovementioned required reserve ratio cut, with China returning form a week-long holiday its currency is bracing for renewed trade war – and rate shock – impact, and weakened in…
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Web 3.0 – The Myth Of The Infrastructure Phase

Courtesy of ZeroHedge. View original post here.

Authored by Dani Grant and Nick Grossman via Union Square Ventures,

A common narrative in the Web 3.0 community is that we are in an infrastructure phase and the right thing to be working on right now is building out that infrastructure: better base chains, better interchain interoperability, better clients, wallets and browsers. The rationale is: first we need tools that make it easy to build and use apps that run on blockchains, and once we have those tools, then we can get started building those apps.

But when we talk to founders who are building infrastructure, we keep hearing that the biggest challenge for them is to get developers to build apps on top. Now if we are really in an infrastructure phase, why would that be?

Our hypothesis is that this is not actually how things play out. We are not in an infrastructure phase, but rather in another turn of the apps-infrastructure cycle. And in fact, the history of new technologies shows that apps beget infrastructure, not the other way around. It’s not that first we build all the infrastructure, and once we have the infrastructure we need, we begin to build apps. It’s exactly the opposite.

A big part of why this is even a topic of conversation is that everyone now knows that “platforms” are often the largest value opportunities (true for Facebook, Amazon/AWS, Twilio, etc.) — so there is naturally a rush to build a major platform that captures value.  This may be even more true in the distributed web where value often — but not always — accrues in the protocol layer rather than the applications that sit on top.

But, as we will see: platforms evolve from an iterative cycle of apps=>infrastructure=>apps=>infrastructure and are rarely built in an outside vacuum.

First, apps inspire infrastructure. Then that infrastructure enables new apps.

What we see in the sequence of events of major platform shifts is that first there is a breakout app, and then that breakout app inspires a phase where we build infrastructure that makes it easier to build similar apps, and infrastructure that allows the broad consumer adoption of those apps. Kind of like this:

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Goldman Reveals The 3 Biggest Threats To Profit Margins

Courtesy of ZeroHedge. View original post here.

It's that time in the quarter again: starting next Friday, the big money center banks will report Q3 earnings, launching third quarter earnings season, which for the third consecutive quarter is expected to be stellar.

According to consensus, S&P 500 3Q EPS will grow by 21% Y/Y, which while a slight deceleration from the 24% and 26% earnings growth registered during 1Q and 2Q, will still be enough to extinguish fears for an imminent reversal in record corporate profitability.

Of note: both sales growth and tax reform contributed equally to first half EPS growth as revenues during the first two quarters rose by more than 10%, led by Energy (+108%) and Materials (+45%), according to Goldman. Meanwhile, Trump's tax reform and the lower corporate tax rate accounted for 10% of earnings growth (excluding lower tax rates, EPS growth would have been 15% in 1Q and 17% in 2Q, still the fastest pace since 2011).

Commenting on what to expect during Q3 earnings season in his latest Weekly Kickstart note, Goldman's David Kostin writes that the recent trend of double-digit revenue growth will continue with 11% sales growth in 3Q 2018.

Consensus expects that Energy (+31%) and Health Care (+19%) will provide the fastest sales growth at the sector level. Energy sales directly benefit from the rally in crude. WTI averaged $69 per barrel in 3Q, up 44% vs. last year. Information Technology is expected to grow 3Q revenues by a more modest 12% primarily due to the reclassification of GOOGL (consensus sales growth +23%) and FB (+34%) into Communications Services.

While Kostin notes that a key catalyst behind the upside surprise in first half earnings was the 200bps impact on EPS which was underestimated by Wall Street (and could represent a source of positive EPS surprise in 3Q), he notes that the ultimate driver of corporate sales growth is underlying economic activity.

As Fed Chair Powell stated in his speech this week to the National Association for Business Economics (NABE), the outlook is “remarkably positive.” In fact, the unemployment rate released this morning fell to 3.7%, the lowest level in 50 years. The National

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This Is Not Your Grandpa’s Jobless Rate

Courtesy of ZeroHedge. View original post here.

Via The Economic Cycle Research Institute,

The overall jobless rate is now the lowest in nearly half a century, but most don’t understand why.

For college graduates, it’s the lowest in only 11 years, so the headline number exaggerates how tight the labor market is for them.

Today, over 34% of Americans are college graduates, more than triple their population share in 1969. Meanwhile, those without high school diplomas – who made up almost half the population in 1969 – are down to only a tenth of the population.

Because the jobless rate for college graduates is structurally much lower than for those who aren’t high school graduates – the difference typically being several percentage points – that pulls down the headline jobless rate, even though the job market for college graduates isn’t as tight as it was in the summer of 2006.

That’s notable because, while their wage share was already a quarter in 1969, it’s well over half today. But for those without high school diplomas, it’s under 4% now, so the huge plunge in their jobless rate since 2010 makes less of a difference to consumer spending.

Of course, it’s typical for the jobless rate to decline substantially in long expansions. But a key reason it’s so low today is the enormous increase in the proportion of college graduates over the decades.

The Next Bond Crisis: Over $1 Trillion In Bonds Risk Cut To Junk Once Cycle Turns

Courtesy of ZeroHedge. View original post here.

It's been a long time coming.

Last November, still smarting from a year he would rather forget, Russell Clark and his Horseman Capital, i.e. the "world's most bearish hedge fund" unveiled what he would short next: according to Clark, the next major source of alpha would be shorting fallen angel bonds.

Citing a recent IMF Global Financial Report, Clark said that "US investment grade debt is very low quality, and could produce some large fallen angels [and] mutual funds are much larger in the high yield market than they used to be. [L]ow rates means the capital losses are much higher than they used to be. And that investors in high yield mutual funds are much flightier than they used to be! Essentially the IMF are telling me that if you get a large enough fallen angel, the high yield market will freak out, and volatility will spike causing volatility targeting investors to dump leveraged positions. Sounds good to me."

Then, last June, one of the icons of credit and distressed investing, Oaktree Capital, joined the bandwagon of fallen angel hunters, saying that the fund "expects to see a flood of troubled credits topping $1 trillion as rising interest rates overwhelm low-quality loans and bonds." Speaking at the Bernstein Strategic Decisions Conference, Oaktree Capital's Chief Executive Jay Wintrob said that when the cycle turns it will be faster and larger than ever as "fallen angels" proliferate, and added ominously that "there will be a spark that lights that fire."

Oaktree saw the potential opportunity as so pressing that the fund has now allocated about a quarter of its assets to troubled issuers: "Amid slim pickings in the U.S., the firm has looked to spread its distressed strategies into China, India and other emerging markets."

To be sure, Horseman and Oaktree were not alone preparing for a surge in troubled issuers. The amount of “dry powder” held by fund managers to invest in low-quality debt has grown to around $150 billion, Wintrob estimated. Quoted by Bloomberg, he said this number has shown steady growth as the duration of bonds has increased, which could make the coming price drops
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John Williams Warns “The Fed Is Killing Off The Economy”

Courtesy of ZeroHedge. View original post here.

Via Greg Hunter’s,

Economist John Williams says the recent rate hikes mean the “Fed is killing off the economy.”

Williams says, “I heard President Trump make some comments to that effect, and he’s right…"

"The Fed is trying to raise rates. The idea is if you get higher rates, the banks will be able to make more profits on their lending. It will also encourage bank lending. Unfortunately, on the consumer end, it raises the consumers’ cost of borrowing as interest rates go up. It makes mortgages more expensive. It makes borrowing more expensive. Mortgages go up, people don’t buy as many houses.

What you are seeing right now is effectively a recession in the housing market, in the construction area. Existing home sales have been down for six or seven months in a row, and it’s down year over year.”

Williams says, “The Fed is trying to get the system back to normal.”

In doing so, the Fed could kill the system. Williams says,

“Well, that’s what they are doing. In many ways, it would have been easier if the banking system would have collapsed and had a banking holiday, and restructured it and reopened it back in 2007 and 2008. That would have been a very difficult time for the people who owned the banks, and again, the Fed owns the banking system.”

So, they are trying to fix the banks, and to do that, they will simply screw the consumer? Williams says,

Well, they have an escape clause. Former Fed Head Janet Yellen said that if the economy falls back into recession, ‘we will just go back into quantitative easing’ (QE/money printing). I think that could easily happen here. When the economy goes down, it increases the liquidity stresses on the banking system. There is default on debt, and companies tend to go out of business. That will stress the bank earnings. QE was aimed at propping up the banks in tough times.

The Fed is very open to QE, and from the Fed’s standpoint, I think we are going to end up in a perpetual

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Hedge Fund CIO: “After A Decade Of 0% Rates, Payback Time Is Just Starting”

Courtesy of ZeroHedge. View original post here.

Submitted by Eric Peters, CIO of One River Asset Management

“President Trump’s leadership is working. China wants a different American President,” declared Mike Pence, firing up his base into the mid-terms home stretch.

“Chinese security agencies have masterminded the wholesale theft of American technology,” continued our VP. “Worst of all, China has initiated an unprecedented effort to influence American public opinion, the 2018 elections, and the environment leading into the 2020 presidential elections,” Pence explained.

“Beijing is also using its power like never before. China now spends as much on its military as the rest of Asia combined, and is prioritizing capabilities to erode US military advantages on land, at sea, in the air, and in space,” he warned, without mentioning that America’s annual military budget exceeds the combined spend of China, Russia, Saudi Arabia, India, France, Britain and Japan.

America’s 2018/2019 budget deficit is forecast at $985bln (22% of the $4.4trln federal budget). We’ll borrow those $985bln dollars, spend $610bln on our military, pay $390bln in interest on our $16trln debt, and still come up $15bln short.

A decade of 0% interest rates allowed America to borrow without consequence. Payback time is just starting. Next year’s interest expense will be a stunning 50% higher than 2017 thanks to rising interest rates and still-expanding budget deficits.

Interest payments on the US federal debt will overtake Medicaid expenditures in 2020 and our entire military budget in 2023. The CBO forecasts $915bln in annual interest expenses by 2028.

“Understanding the Chinese propaganda efforts is going to be key,” advised our vice president, spinning voter’s attention away from the threats within, to those from without.

And on cue, the story broke across countless media outlets, an outrage first discovered in 2015 but conveniently surfacing just now: "Chinese Spies Snuck Chips Into CIA, US Military, Commercial Servers, Leaving Them Open To Infiltration And Compromising America’s Technology Supply Chain."

Lloyd Blankfein: Catch-Up With David Solomon

By Jacob Wolinsky. Originally published at ValueWalk.

As David Solomon began his tenure as Goldman Sachs CEO, he sat down with Lloyd Blankfein to discuss what it takes to do the job. This video is the premiere of “Catch-Up With David,” a series featuring David Solomon speaking with business leaders and Goldman Sachs people about trends and ideas shaping markets and the economy.

Catch-Up With David

Image source: YouTube Video Screenshot

Lloyd Blankfein: “Catch-Up With David”

Q3 hedge fund letters, conference, scoops etc


So. I’m sitting and I’m thinking about my day. I’m excited. But I remember so vividly. Back in May 2006. Your first day. And I remember how quickly it happened. I remember hearing from you over Memorial Day weekend. And then like the next day you were the CEO having now done it and looking back. What do you wish you knew that first day. That you can pass on to me that will help me.

Well I think. You know I think you have a lot of the stuff down I can tell you what I missed. I wasn’t used to it was a very big gap. Between the attention I got. The day before. And the attention I got the day I started as CEO. And it was a very very big chasm. I think you had a. Kind of CEO elect. So are waiting the CEO in waiting. You had a time to you know gin up for that and there’s an adjustment that has to be made for that not only just the weirdness of it but also the response that you have to do and how to organize your calendar and select and prioritize a sense of what’s owed to you and what you owe to others. And for me it was kind of sudden there’s undoubtedly disadvantages advantages to everything. But one of the things that because of the radical nature of my transition it left me with a sense of what I would want to do for my for my successor.

By the way I’m appreciative other because it’s I can’t imagine as I’ve gone through a bunch of what I’ve gone through the last few months and getting ready for this…
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#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 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 ... more from Insider

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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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

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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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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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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About Ilene:

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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