Archive for 2018

Scientists Freak Out Over Pandemic Potential Of Genetically Engineered Smallpox

Courtesy of ZeroHedge. View original post here.

Following the release of a paper earlier this year which describes how researchers stitched together segments of DNA in order to revive horsepox – a previously eradicated virus, scientists have been flipping out over the possibility that bad actors may use the study as a blueprint to revive smallpox. 

The disease killed an estimated 300 million people before the World Health Organization deemed it eradicated following a long vaccination campaign. Thus, the publication of a method for reviving a closely related disease has understandably raised some red flags within the scientific community, reports

Critics argue that the paper not only demonstrates that you can synthesize a deadly pathogen for what Science reported was about US$100,000 in lab expenses, but even provides a slightly-too-detailed-for-comfort overview of how to do it.

Overall, everyone's pretty polite. But you get the sense that microbiologists are really, really worried about someone reviving smallpox.

Prior to its eradication, smallpox was primarily spread by direct and fairly prolonged face-to-face contact between people. Once the first sores appeared in the mouth and throat (the early rash stage), they were contagious until the last smallpox scab fell off. According to the CDC, "these scabs and the fluid found in the patient’s sores also contained the variola virus. The virus can spread through these materials or through the objects contaminated by them, such as bedding or clothing. People who cared for smallpox patients and washed their bedding or clothing had to wear gloves and take care to not get infected."

Smallpox sores (photo: CDC)

What would a smallpox bioterror attack look like? Via the CDC:

Most likely, if smallpox is released into the United States as a bioterrorist attack, public health authorities will find out once the first person sick with the disease goes to a hospital for treatment of an unknown illness. Doctors will examine the person and use tools developed by CDC to figure out if the person’s signs and symptoms are similar to those of smallpox. If doctors suspect the person has smallpox, they will care for the person and isolate them in the hospital so that others do…
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Shocktober’s Not Over – McElligott Sees More “Rolling Minsky Moments” As “Pseudo-Stability” Unravels

Courtesy of ZeroHedge. View original post here.

Just before last week's interest-rate driven market selloff entered its most acute phase, we cited CTA positioning data from Nomura showing that systematic funds had not yet begun the painful process of deleveraging as certain "triggers" had not yet been met. But shortly after this commentary from Nomura's cross-asset strategist Charlie McElligott had been distributed to Nomura's clients, the selling pressure intensified, busting through trigger levels in a way that only exacerbated what became the most intense selloff in SPX since February (and the biggest for NDX since Brexit).

With markets creeping higher again after Wednesday's furious selloff, McElligott chimed in with an update to Nomura's positioning models that incorporated this latest break. As of Wednesday's close, McElligott acknowledged that the Nomura Quant Strategies CTA model was indicating that these systematic sellers had reduced down to "43% Long" from "100% Max Long" 1 week ago, resulting in an estimated $88BN in one day selling on the one day move from "97% Long", the positioning at the start of Wednesday's session, all the way down to "43% Long."


With his audience clamoring for more guidance about what, exactly, triggered the market wreck of this past week, McElligott made a brief appearance Thursday afternoon on the MacroVoices podcast, where he got "philosophical" during an interview with Erik Townsend and Patrick Ceresna, arguing that this week's equities driven selloff actually had a deeper "macro origin."

Again, if I’m really stepping back and talking almost more philosophically, it’s the bigger picture here is that a higher real interest rate environment is resetting term premiums. And, with that, the cost of leverage, cross-asset correlations, asset price valuation – all of these constructs built into the post-crisis quantitative easing era are now ripe to tip over.

And we’re seeing these rolling Minsky moments as the pseudo-stability of lower interest rates, flatter curves, and suppressed volatility breeds instability through the leverage. And the leverage that’s had to have been deployed on strategies over the past few years as yield was chased. And that’s what we’re coming out of right now.

As McElligott explains, the market tantrum that was apparently triggered by the return of the bear…
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Relative Scarcity Of Physical Gold Prompts Large Drawdowns From Funds, ETFs

Courtesy of ZeroHedge. View original post here.

Authored by Jesse via Jesse's Cafe Americain blog,

"It appears that there is a dwindling and overleveraged supply heading towards an unmanageable and relentless source of demand."

It is interesting to watch the ongoing management of physical gold holdings in the West.

Physical gold has been seeing large drawdowns from inventory during this price decline, but silver does not…

This is not due to some preference or matter of taste. Physical gold for sale at these prices is in short supply, whereas silver is not.

Both are subject to speculative price manipulation in the paper markets.

The relentless demand from Asia is stressing the highly leveraged claims per physical ounce of gold in London and New York.

It appears that there is a dwindling and overleveraged supply heading towards an unmanageable and relentless source of demand.

The system will be maintained – until it cannot.  Although the game can be extended by a determined effort, no commodity pricing pool can last forever in the face of a stubbornly stable supply and a steady excess of off-take out of the pool, shenanigans and antics notwithstanding.

For now there around 6 ounces of paper gold allocated to each oz of physical gold in Comex repository…

Physical gold is flowing from West to East, into the markets and strong hands of Asia. 

Bye bye gold.

The eventual resolution may be quite energetic in terms of price.

Hedge Fund CIO: “Some See Parallels Between Today And The Late-1930s, Which Led To World War II”

Courtesy of ZeroHedge. View original post here.

Submitted by Eric Peters of One River Asset Management

The future is unknowable. Yet never has capital been so concentrated in strategies that depend on the future closely resembling the past. The most dominant of these strategies requires bonds to rally when stocks fall. For decades, both rose inexorably. And a new array of increasingly complex and illiquid strategies depends on a jump in volatility to be followed by a rapid decline of equal magnitude. They appear uncorrelated until they are not.

Virtually every investment portfolio measures risk by utilizing some combination of volatility and correlation, both of which are backward-looking and low. But the present is knowable. The past too. And the multi-decade trends that carried us to today produced levels of inequality rarely seen.

Low levels of inflation, growth, productivity, and volatility are features of this cycle’s increasingly unequal distribution. But cycle extremes produce pressures that reverse their direction.

On cue, an anti-establishment political wave washed away the globalists, with promises to turn the tide. Such change is nothing new, just another loop around the sun.

Now signs of a cycle swing abound; shifting trade agreements, global supply chains, military dynamics, immigration, wage pressures, polarization, nationalism, tribalism.

To an observer, it’s neither right nor wrong, it simply is. Some see parallels between today and the late-1930s, which led to World War II. We also see parallels with the mid-1960s, which led to The Great Inflation.

What comes next is sure to look different still. But investment strategies that prospered from the past decade’s low inflation, growth, productivity and volatility will face headwinds as this cycle turns.

Those strategies that suffered should enjoy tailwinds. That’s how cycles work. And we know the 1940s was a strong decade for Trend performance. The 1970s was the best decade for Trend in 150yrs. And following cycle turns in both the 1930s and 1960s, the world became a profoundly volatile place. 

* * *

And, as a bonus, here are three observations from Peters on what he calls "Groundhog Day"

“Starting in the mid-1960s several significant policy changes, made in the context of a belief that inflation wasn’t a concern, all but caused…
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How the 2008 financial crisis helped fuel today’s right-wing populism


How the 2008 financial crisis helped fuel today's right-wing populism

File 20180930 48665 1ctumap.jpg?ixlib=rb 1.1

The 2008 financial meltdown caused millions of Americans to lose their homes, and the austerity measures that followed only widened income inequality and helped fuel the rise of right-wing populism. (AP Photo/Tony Dejak)

Courtesy of Jacqueline Best, University of Ottawa

Ten years ago, on Oct. 3, 2008, United States President George W. Bush signed the “Troubled Assets Relief Program” (TARP) that promised $700 billion to support banks and companies that were hit by the global financial crisis.

As U.S. Congress granted its support for the historic bill, it seemed like liberal democracy was rising to the challenge posed by the global financial crisis. Yes, the bill would be very expensive for American taxpayers, but the cost seemed justified in the face of the potential collapse of the global economy.

A decade later, the financial crisis is a distant memory, the TARP funds have been repaid with interest and stock markets are reaching new heights.

Yet switch from the business pages to the front page and a much darker picture appears: a particularly virulent strand of right-wing populism is popping up around the world, while Doug Ford and Donald Trump are wreaking havoc with our democratic institutions.

Exploiting weaknesses

It turns out that the greatest cost of the 2008 global financial crisis was not the bailouts — but rather the cost to our democratic system.

Conservative populists have been able to exploit a series of weaknesses in liberal democratic society — weaknesses that predate the global financial crisis, but were exacerbated by the failure of our political leaders to respond effectively to it.

In this Sept. 17, 2008, photo, a trader rubs his eyes as he works on the floor of the New York Stock Exchange. The financial crisis touched off the worst recession since the 1930s Great Depression. (AP Photo/Richard Drew)

In the decades leading up to the 2008 crisis, governments rejected the more cautious approach to economic management that had emerged after the Great Depression and the Second World War.…
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True ‘innovation’ generates ideas, not wealth


True 'innovation' generates ideas, not wealth

File 20181010 72110 c88sjz.jpg?ixlib=rb 1.1

A street art mural representing the innovative scientist Marie Curie, by French graffiti mural artist C215 (Christian Guemy) in Vitry-sur-Seine, France, on 24 Dec 2015. (Shutterstock)

Courtesy of Eleftherios Soleas, Queen's University, Ontario

Ancient innovators were poets, thinkers, artisans and scientists, not business owners. The classical Greek philosopher Socrates did not become famous for the massive dividends that he provided to his shareholders in the hemlock industry.

We remember innovators for their ideas, not their wealth. Why then has innovation been co-opted largely by business interests?

When most people think of innovation, they tend to think of people making money from executing novel ideas. They think of today’s successful capitalists like Elon Musk, Bill Gates or Warren Buffet.

Business folk don’t exactly rush to correct them and I don’t blame them. That said, there is a danger to letting any one group completely dictate the societal narrative of what is “innovation” and who is “innovative.”

Money is not a requirement

For my doctoral dissertation, I interviewed 30 Canadian innovators in a variety of settings about what motivates them to be innovative. I asked them, among other things, if an idea can be innovative even if it has zero potential to make back its investment.

Six of them were from business settings, 24 were not; all 30 of them said that making money was not a requirement for an idea to be innovative and that most great ideas are interdisciplinary.

When I did my survey of 500 Canadian innovators outside of business, none of them considered rewards like money to be strong positive motivators. That’s the sound of money letting everyone down.


The fact is that innovation has
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Why Used-Car Prices Are Plunging

Courtesy of ZeroHedge. View original post here.

Authored by Daniel Ruiz via,

We have been testing the upper limits of used vehicle pricing (and new) all year. I think we have finally reached a point where the consumer has started rejecting higher prices (used vehicles for now). There were a couple of events last month that raised concern ahead of the most recent used car and truck CPI report:

1. Used vehicle inventory started rising rapidly in September after declining for most of the year.

2. There was a significant drop in used vehicle values during the last week of September.

The sudden increase in used vehicle inventory is a strong signal that the rate of sale has slowed due to price increases that consumers are not willing to absorb. Most retail dealers have a rigid 60-day cut off for used vehicle inventory. As a vehicle nears the 60-day mark, the dealer is forced to heavily discount that vehicle or face an even greater loss by disposing of it through wholesale auction (60 days of depreciation, reconditioning expense, transportation and auction fees). This is also likely related to the sharp drop in used vehicle values during week 4 of September as retail dealers returned to auction and adjusted their bids after realizing the vehicles they previously purchased did not sell at the prices they anticipated.

New and used inventory levels are still showing a draw YTD, but the rate of change is concerning. I am completely convinced that the strength we’ve seen in both new vehicle volume and pricing this year is due in large part to the incredibly strong performance in used vehicle values. If the recent trend in used vehicle values changes, things could get ugly and FAST!

Additionally, take note of the dip in time to equity from 2006-2007 and how similar it is to the dip in 2018. It took this year’s used vehicle appreciation  in order to offset the consistent increase in loan terms since 2009. If used vehicle values roll over, we have the same exact setup that led to the spike in time to equity from 2007-2008.

I would take the drop in used car and truck CPI as a serious warning with larger implications to come. I am still confident in Q3 earnings for manufacturers, retail dealers and rental car companies but would proceed with caution going forward.

Oil Jumps After Saudi Official Floats “Trial Balloon” Op-Ed Envisioning “Oil Weapon” Devastation

Courtesy of ZeroHedge. View original post here.

WTI Crude prices are up around 2% in the early Sunday trading  after Saudi Arabia appears to be now attempting to go on the offensive and is lashing out as it does damage control in the aftermath of journalist Jamal Khashoggi's alleged murder inside the Saudi consulate in Istanbul nearly two weeks ago.

What likely sparked the risk premium was the fact that Turki Al Dakhil, who heads the Saudi state-owned Arabiya news network, wrote in an article that U.S. sanctions against Saudi Arabia could wreak havoc on the global economy by taking oil prices to $200 a barrel and more. Faisal bin Farhan, a senior adviser to the Saudi embassy in Washington, said on Twitter that these comments didn’t represent the Saudi leadership.

“The most powerful weapon Saudi has is oil and its investments,” said Fawaz Gerges, a professor of international relations at the London School of Economics. “ I doubt Saudi will decrease the production of oil to the world economy because it will hurt itself and I doubt that Saudi will withdraw its investments.”

And the reaction to the threat – though modest for now – will not please President Trump

So kick back and grab your popcorn: this could be the beginning of a spat and public relations meltdown with the U.S. as the Saudi Embassy in Washington on Sunday tweeted the following passive aggressive statement directed at the White House:

To help clarify recently issued Saudi statement, the Kingdom of Saudi Arabia extends it appreciation to all, including the US administration, for refraining from jumping to conclusions on the ongoing investigation.

The kingdom now appears to be breaking under reacting to the pressure amidst countless international reports and Western leaders all pointing the finger at Riyadh for the pre-meditated murder of the Washington Post columnist and US resident.

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Morgan Stanley: “The Hit To The P&L From Recent Moves Cannot Be Overstated”

Courtesy of ZeroHedge. View original post here.

By Andrew Sheets, Morgan Stanley Chief Cross-asset strategist

From January through September, both stock markets and bond yields rose in peaceful coexistence. Over the last two weeks, that pattern has changed. It’s as if two kids sleeping in the back seat of the car have woken up, don’t know why, and definitely aren’t happy about it.

Why the sudden change?

I don’t think it’s as simple as ‘higher rates and steeper curves are bad for markets’. Though I hear this frequently, I think it’s wrong. Higher rates generally reflect more long-term economic optimism, with positives that tend to boost stock prices more than the negatives of a higher discount rate. That’s generally held true over the last 30 years, and more recently in the post-crisis period. 2009, 4Q10, 2013 and 4Q16 were among the best periods for both equity and credit returns in the last 10 years. They all had higher yields and steeper curves.

Stocks have begun reacting differently to bonds because a number of forces are colliding. How they play out will hold the key to the rest of the year.

Qualitatively, the last two weeks saw US real yields break a range that’s held remarkably stable for more than five years. Despite all that’s changed in the market narrative since June 2013, the yield on US 10-year bonds above expected inflation stayed between 0 and 90bp. While stocks historically have traded well at higher real yields, breaking a range introduces uncertainty.

Quantitatively, my colleague Michael Wilson has long flagged 3.25% as a level in the 10-year yield where, by his calculations, either the equity risk premium needs to break post-crisis lows or 2,900 becomes a ceiling for the S&P 500. While it doesn’t pay to be too precise, the stock-bond relationship did start to shift as we approached 3.25%.

These breaches collided with popular, stretched positions, most prominently value versus growth. As of early last week, value globally had not been as cheap relative to growth in nearly 20 years, and value underperformance versus growth over the last 12 months has only been worse 7% of the time. Stretched performance and valuation in turn collided with stretched positioning, making any…
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Will China’s “Debt Diplomacy” Backfire?

Courtesy of ZeroHedge. View original post here.

Authored by Tim Daiss via,

Angola, Africa’s second largest oil producer, has ramped up its financial ties with Beijing, but perhaps to its own detriment, The country’s state newspaper Jornal de Angola said on Wednesday that the country had secured $2 billion in Chinese funding from the China Development Bank for infrastructure projects. Angolan President João Lourenco secured the financing during his first visit to Beijing, the report added.

Details of the deal were not released, according to various media outlets. A Reuters report said on Wednesday that Angola is in the process of trying to diversify its economy since a fall in the price of crude in 2014 plunged it into recession. Inflation is running at more than 20 percent per year and at least one in five of workers in the country are unemployed.

News of the funding deal comes just a week after Fitch Ratings released negative news for the African oil producer. It said that Angola is expected to have a GDP growth rate of 1.5 percent in 2018, given the growing tendency for its declining trend witnessed in oil production, down from a previous 2.8 percent growth rate predicted earlier.

The ratings agency also trimmed its GDP growth projection figures for the country 2019 but increased that projection for 2020 from a previous growth rate projection of 2.2 percent to 2.6 percent.

The Chinese cash infusion also comes as President Lourenco solidifies his power in order to help push through reform measures, promising to oversee a so-called “economic miracle” by opening up the country of 29 million people to foreign investment as well as opening up the tourism sector and prioritizing agriculture.

China’s string of pearls

Angola is the latest in a line of countries stretching from Asia, to the middle east and Africa that are inking massive infrastructure deals with China.

One of the staunchest critics of China’s infrastructure loan model strategy has been the Trump Administration. U.S. Vice President Mike Pence said last week that Beijing was using "debt diplomacy" to expand its global influence in countries ranging from Asia to Africa to Europe to even Latin America.
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Zero Hedge

Auto Shares Surge As Fiat, Renault Confirm Merger Talks

Courtesy of ZeroHedge. View original post here.

With President Trump in Japan for a state visit and most of Europe headed to the polls to vote in the quinquennial EU Parliamentary elections, there was enough news to keep market watchers occupied during what was supposed to be a quiet holiday weekend in the US. 

But on top of these political headlines, on Saturday afternoon, the news broke that Italian-American carmaker Fiat Chrysler had approached France's Renault with a merger proposal that would leave the shareholders of each carmaker with half of the combined company, in a tie-up that would create the world's third-largest au...

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Phil's Favorites

Trump and the problem with pardons


Trump and the problem with pardons

Courtesy of Andrew Bell, Indiana University

As a veteran, I was astonished by the recent news that President Trump may be considering pardons for U.S. military members accused or convicted of war crimes. But as a scholar who studies the U.S. military and combat ethics, I understand even more clearly the harmful long-term impact such pardons can have on the military.

My researc...

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Insider Scoop

Jefferies Sees 60-Percent Upside In Aphria Shares, Says Buy The Dip

Courtesy of Benzinga.

After a red-hot start to 2019, Canadian cannabis producer Aphria Inc (NYSE: APHA) has run out of steam, tumbling more than 31 percent in the past three months.

Despite the recent weakness, one Wall Street analyst said Friday that the stock has 30-percent upside potential. 

The Analyst

Jefferies analyst ... more from Insider

Kimble Charting Solutions

DAX (Germany) About To Send A Bearish Message To The S&P 500?

Courtesy of Chris Kimble.

Is the DAX index from Germany about to send a bearish message to stocks in Europe and the States? Sure could!

This chart looks at the DAX over the past 9-years. It’s spent the majority of the past 8-years inside of rising channel (1), creating a series of higher lows and higher highs.

It looks to have created a “Double Top” as it was kissing the underside of the rising channel last year at (2).

After creating the potential double top, the DAX index has continued to create a series of lower highs, while experiencing a bearish divergence with the S...

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Chart School

Brexit Joke - Cant be serious all the time

Courtesy of Read the Ticker.

Alistair Williams comedian nails it, thank god for good humour! Prime Minister May the negotiator. Not!

Alistair Williams Comedian youtube

This is a classic! ha!

Fundamentals are important, and so is market timing, here at we believe a combination of Gann Angles, ...

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Digital Currencies

Cryptocurrencies are finally going mainstream - the battle is on to bring them under global control


Cryptocurrencies are finally going mainstream – the battle is on to bring them under global control

The high seas are getting lower. dianemeise

Courtesy of Iwa Salami, University of East London

The 21st-century revolutionaries who have dominated cryptocurrencies are having to move over. Mainstream financial institutions are adopting these assets and the blockchain technology that enables them, in what ...

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DNA as you've never seen it before, thanks to a new nanotechnology imaging method

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


DNA as you've never seen it before, thanks to a new nanotechnology imaging method

A map of DNA with the double helix colored blue, the landmarks in green, and the start points for copying the molecule in red. David Gilbert/Kyle Klein, CC BY-ND

Courtesy of David M. Gilbert, Florida State University


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More Examples Of "Typical Tesla "wise-guy scamminess"

By Jacob Wolinsky. Originally published at ValueWalk.

Stanphyl Capital’s letter to investors for the month of March 2019.

rawpixel / Pixabay

Friends and Fellow Investors:

For March 2019 the fund was up approximately 5.5% net of all fees and expenses. By way of comparison, the S&P 500 was up approximately 1.9% while the Russell 2000 was down approximately 2.1%. Year-to-date 2019 the fund is up approximately 12.8% while the S&P 500 is up approximately 13.6% and the ...

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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


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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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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