Archive for the ‘Uncategorized’ Category

TGIF – A Nothing Week in the Markets Dribbles to a Close

What a waste!

It's a low-volume pre-holiday week but it looks like we could have taken the whole thing off as we're drifting back to 2,712 on the S&P, which is right where we closed last Friday and not too far off the Friday before that either.  As I've been saying for the past two weeks, I don't think we're consolidating for a move over our strong bounce line at 2,728 – I think we're simply in a prolonged fail of that level and that means we'll be heading back to the S&P's 20% line at 2,640.

That's still 10% over the fair value for the S&P (we raised it 10% due to tax cuts – even though the tax cuts are ultimately bad for the broad economy).  Speaking of fair value, oil is realizing a bit of its fair value and has fallen 2.5%, back below the $69 and that's going to be great for Wednesday's Live Trading Webinar play on the Ultra-Short Oil ETF (SCO) where we picked up the June $14/17 bull call spread for net $1.45.

That put our break-even at $15.45 and today SCO will be well over $16 for a 40%+ gain in 2 days - you're welcome!  We didnt play the oil Futures (/CL) because it was too iffy with the holiday weekend and the Global tensions but putting, for example, $1,450 into the spread limits your loss to no more than $1,450 and it's very unlikely we wouldn't be able to stop out below $1,000 if it went the wrong way, going the right way, we will be making $1.55 (106%) in 60 days on a trade that requires no margin at all (so it's good for IRAs). 

Gasoline (/RB) has fallen to $2.19 and I like those Futures long off that line (with tight stops below) as I expect a pop back to $2.20 at least today as "THEY" try to jam prices up at the pump into the holiday weekend.  Natural Gas (/NG), on the other hand, is testing the $3 mark (we're long). 

What's taking oil down today (aside from basic fundamentals) is a
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The US overtakes Hong Kong to rank first among world’s most competitive economies

 

The US overtakes Hong Kong to rank first among world's most competitive economies

File 20180523 51102 uuczjk.jpg?ixlib=rb 1.1

The US has broken back into the lead. shutterstock.com

Courtesy of Arturo Bris, IMD Business School

The US has leapfrogged Singapore and Hong Kong to top IMD’s latest World Competitiveness Rankings. The top five most competitive economies in the world remain the same since 2016, but their order has changed. With the US at the top, Hong Kong has dropped one spot to second and Singapore remains third. Germany has fallen two spots to 15th and the UK has slipped one position to 20th.

We compile the rankings using 258 indicators. Hard data such as national employment and trade statistics are weighted twice as much as the soft data from a survey of business executive opinions, which measures the business perception of issues like corruption, environmental concerns and quality of life.

The return of the US to the top is driven by its strength in economic performance and infrastructure. Many will wonder if Trump is responsible for this return to the top spot in the rankings. The answer is a mixed bag. Hard data still reflects the results of policies from the Obama administration which boosted employment and output, like the American Recovery and Reinvestment Act of 2009. Meanwhile, the survey of business executives element of the rankings indicates that the Trump administration is perceived as business friendly.

But in the category of how attractive the country remains to business executives, the US ranked very low in perceptions of government competency and the risk of political instability. The country also ranked number one in the rankings in 2013-15, which shows that any recent policy decisions have not miraculously catapulted the country to the top.

2018 IMD World Competitiveness Ranking (one year change). IMD, CC BY

Hong Kong comes in at second but with different strengths to the US. It scored especially high in terms of government efficiency and business efficiency. This reflects the fact that there is no template to becoming the most competitive country in the world; each has its unique…
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Stocks prices are a proxy for our beliefs about the future

 

Stocks prices are a proxy for our beliefs about the future

Courtesy of 

One of the most aggravating things I’m forced to listen to from time to time is people citing widely available valuation ratios as though their very existence has some sort of meaning for the future price of a particular stock. Such and such company is selling for only 15x earnings, therefore it’s cheap and you should buy it. 

This ignores the fact that any information available to the masses is already priced in and that markets, which are made up of hundreds of millions of participants, have settled on buying and selling a given security at its current price or valuation for a reason. Markets are very smart, which is not the same as saying they’re always right.

Such and such stock sells at 15 times earnings because, at the current moment, this is the equilibrium price at which sellers and buyers have reached a tacit agreement.

Citing a PE ratio is like remarking on the fact that it’s cold in Antarctica and hot in Africa.

What investors are really doing is attempting to divine the future prospects of a company and what they think it could someday be worth, and then placing their bets accordingly. Current valuations are useful in this endeavor only insofar as they present buyers and sellers with a an approximate baseline or a starting point.

And then from there, literally anything can happen.

Netflix has just become the largest publicly traded media company in the country today, surpassing both content giant Disney and distribution giant Comcast in one shot. These securities are not being traded at their current levels because of ratio of price to current earnings. Rather investors and traders in both securities are making a bet on what the future looks like, incorporating possible risks to their forward-looking assessments and then either buying or selling depending on how far away prevailing prices are from their own individual guesses.

And then there are some other tangential considerations that go into this stew – optics (do I want to show my fund’s shareholders that I am in this name?), benchmarks (should…
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What are these ‘levels’ of autonomous vehicles?

 

What are these 'levels' of autonomous vehicles?

File 20180514 100703 16gfvhs.jpg?ixlib=rb 1.1

What can this car do on its own, and what does it still need human help with? AP Photo/Gene J. Puskar

Courtesy of Huei Peng, University of Michigan

As automated and autonomous vehicles become more common on U.S. roads, it’s worth a look at what these machines can – and can’t – do. At the University of Michigan’s Mcity, where I serve as director, we’re working to advance connected and automated vehicle technologies, to make cars safer, save energy, and make transportation more accessible to more people.

In 2014, the professional society SAE International, originally founded as the Society of Automotive Engineers, described six levels of autonomous vehicles, which it updated in 2016. Also in 2016, the U.S. Department of Transportation used that description as part of its official policy on automated vehicles on U.S. roads. What are those levels?

Level 0 is where most cars are right now, with a human driver responsible for every aspect of driving. The car may have some systems that notify the driver of certain hazards, like lane departure warnings, but the car does not do anything on its own.

Level 1 sees the beginning of automation, when the car’s computer and mechanical systems control one aspect of vehicle motion – such as its speed or steering. Cruise control is a type of Level 1 automation, in which onboard systems regulate speed, but traditional cruise control is far less safe because it only involves acceleration, not braking – and doesn’t involve any monitoring of surroundings. With adaptive cruise control, by contrast, on-board systems regulate both acceleration and braking to stay a safe distance behind a lead vehicle, and to react safely and smoothly when another vehicle merges in front or leaves the lane. All other aspects of driving, including steering and detecting and avoiding hazards, are still human-controlled. Another Level 1 technology is lane-keeping assistance, in which the car steers itself to stay in a particular lane on the roadway, while the human driver controls the speed and all other driving tasks.

A Level 2 autonomous vehicle can control both the steering and the speed at the…
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What’s at stake in the tariff negotiations between the US and China

 

What's at stake in the tariff negotiations between the US and China

Courtesy of Yixiao Zhou, Curtin University and Rod Tyers, University of Western Australia

The United States and China have put on hold plans to place tariffs on exports, in an effort to avoid a trade war. Our analysis shows just how important these negotiations are, with the impact of trade wars adversely affecting both economies and others like Australia.

The threat of a trade war started when US President Donald Trump announced 25% tariffs on Chinese imported electronics, aerospace products, and machinery. China retaliated hours later and announced 25% tariffs on US exports to China.

Now both sides are agreeing to take “measures to substantially reduce the United States trade deficit in goods with China” and to work on expanding trade and protecting intellectual property.

We modelled a number of scenarios showing all increases in US or Chinese protection would cause international trade, and the global economy more generally, to shrink. We also find interest rates would rise everywhere and the Australian dollar would depreciate.

China and US trade would then fall by between a quarter and a third, depending on whether the tariffs are hiked unilaterally or bilaterally. Australia’s lucrative exports to China would also fall as US demand for China’s goods fall and China requires smaller quantities of Australian goods to produce them.

Because Australia is a small, open economy that is strongly influenced by developments abroad, the impacts of rising protectionism can be as large here as they are in the US and China.

We found if US imposed tariffs but there was no retaliation abroad, the rise in tariff revenue would provide relief for the US economy and that this would raise the after-tax incomes of Americans even though US GDP would fall. However, we found after-tax incomes would fall everywhere else.

If China retaliated to the tariffs, all countries and regions would suffer losses, with Australia’s net loss among the largest, in per capita terms. The effects on China would be the largest, relative to their current disposable income. Because China would suffer the largest…
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Wall Street regulations need a facelift, not a minor Dodd-Frank makeover

 

Wall Street regulations need a facelift, not a minor Dodd-Frank makeover

File 20180523 88002 age3at.jpg?ixlib=rb 1.1

Wall Street needs a new face. AP Photo/Frank Franklin II

Courtesy of Jena Martin, West Virginia University and Karen Kunz, West Virginia University

Republicans finally managed to roll back some of the Wall Street regulations passed by Congress in the wake of the 2008 financial crisis after years of trying.

While it wasn’t a full repeal as some had hoped, it’s the first legislative overhaul since the Dodd-Frank Act became law in 2010.

This debate has primarily been framed as a fight over regulation. Democrats generally want more to protect taxpayers and investors from the next crisis; Republicans want less because they argue it stifles economic growth.

So who’s right?

Based on our combined 35 years of experience with securities markets and the research we’ve done for our book, “When the Levees Break: Re-visioning Regulation of the Securities Markets,” we think both sides are wrong. The issue isn’t about more or less regulation but about the need for a streamlined system that supports 21st-century investing.

If we had our way, the whole system of financial regulation would be burned to the ground and replaced with something entirely different.

Of bonds and banks

When we think of financial markets, we tend to jumble securities markets like stocks, bonds and commodities with conventional bank lending such as checking accounts and lines of credit.

Dodd-Frank, for example, was ostensibly focused on regulation of securities markets, but the rules that got the most attention were those that affect the “too big to fail” banks. That those banks straddled both worlds – securities trading and traditional banking – is what made the 2008 financial crisis life-threatening.

But only securities trading, and in particular derivatives, was at the root of the crisis. So for our purposes, when we talk about financial regulation, our focus is on the securities markets.

How did we get here?

The financial markets meltdown in the fall of 2008 devastated the U.S. economy, but it wasn’t nearly as bad as the stock market rout…
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Federal judge rules Trump’s Twitter account is a public forum

 

Federal judge rules Trump's Twitter account is a public forum

File 20180524 51135 12psfdb.jpg?ixlib=rb 1.1

The president uses his Twitter feed to make official announcements. AP Photo/J. David Ake

Courtesy of Clay Calvert, University of Florida

A federal judge in New York has ruled that President Donald Trump cannot block people from following or viewing his @realDonaldTrump Twitter account. While the case will likely be appealed and could reach the U.S. Supreme Court, the decision is a resounding victory for the First Amendment right of citizens to speak to and disagree with government officials in the social media era.

The judge’s ruling is not a surprise to me, as director of the Marion B. Brechner First Amendment Project at the University of Florida. That’s because it is grounded in the well-established principles of protecting political speech and barring government discrimination against people engaged in public discourse based on their viewpoints.

Sure enough, the judge found that Trump blocked Twitter followers from his account “indisputably … [as] a result of viewpoint discrimination.” In other words, Trump cannot block people simply because they criticize him or his policies.

 

That issue was never really in question in this case, though. The main debate was whether the president’s personal Twitter account was a public forum governed by the First Amendment. More traditional public forums are physical places owned by the government, such as sidewalks, parks and auditoriums. Peaceful public speech and demonstrations in those venues cannot be stopped based on what is being said without a compelling government interest. Twitter, however, is not a real-world space. And it’s run by a private company.

The judge’s ruling found, however, that the company has less control over the @realDonaldTrump account than Trump himself and White House social media director Dan Scavino – also a public official. Their power includes the ability to block people from seeing the account’s tweets, and…
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Thursday Market Fakery – Pump it Up!

"Down in the pleasure centre,
hell bent or heaven sent,
listen to the propaganda,
listen to the latest slander.

Pump it up until you can feel it.
Pump it up when you don't really need it." – Elvis

S&P 2,728 again – they can't keep us over it but they won't let us go under it either. 

Today marks two weeks at the strong bounce line and an optimist would say we're consolidating for a move up but a pragmatist would say this is all being done on low-volume BS pump jobs that are faking market highs by holding up the headline stocks while the broad market sells off – leaving the retail suckers holding the bag when the bottom ultimately falls out.  

Notice how, nearly every day, we hit a high early in the day and then sell off?  That's how you catch big game fish, you give them a little line and then you reel them in and then give them a little line and reel them in again – over and over until they are exhaused and you can haul them onto the boat and gut them and have them for dinner.  That's what's happening to Retail Investors at the moment and the Top 1% are baiting the hooks.  

Yesterday the market blasted higher on the release of the Fed Minutes, which didn't really say much other than the addition of the word "symmetric" but it was used in regards to INFLATION, not rates.  Here's the context of the statement that got the market "so excited" yesterday afternoon:

"Participants generally expected that further gradual increases in the target range for the federal funds rate would be consistent with solid expansion of economic activity, strong labor market conditions, and inflation near the Committee's symmetric 2 percent objective over the medium term. Participants generally viewed the risks to the economic outlook to be roughly balanced."

Now, keep in mind this a 5-minute chart so it took less than 5 minutes of reading the minutes for traders (bots) to decide that the minutes were doveish and blast…
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Zero Hedge

UMich Sentiment Slumps Near 2018 Lows As Income Expectations Tumble

Courtesy of ZeroHedge. View original post here.

Preliminary data for May's UMich sentiment survey showed a tumble in current conditions (and small rise in hope) but the final data showed both sliding notably intra-month with the headline sentiment index at its lowest since January.

  • Headline Sentiment slipped from 98.8 prelim to 98.0 final from 98.8 in April

  • Current Conditions slipped from 113.3 prelim to 111.8 final from 114.9 in April

  • Expectations slipped from 89.5 prelim to 89.1 final from 88....



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Phil's Favorites

The US overtakes Hong Kong to rank first among world's most competitive economies

 

The US overtakes Hong Kong to rank first among world's most competitive economies

The US has broken back into the lead. shutterstock.com

Courtesy of Arturo Bris, IMD Business School

The US has leapfrogged Singapore and Hong Kong to top IMD’s latest World Competitiveness Rankings. The top five most competitive economies in the world remain the same since 2016, but their order has changed. With the US at the top, Hong Kong has dropped one spot to second and Singapore remains third. Germany has fallen two spots to 15th and the UK has slipped one position to 20th.

We compile the rankings using 258 ...



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Chart School

Second Day of Bullish Defense

Courtesy of Declan.

The market had initially reacted to Trump's decision to cancel his North Korean summit before coming to its senses and finishing where it left off yesterday.

For the Russell 2000 it was a bullish doji to follow the 'hammer'; those brave enough to buy the morning dip will be feeling confident as technicals remain bullish.

...

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Insider Scoop

A Peek Into The Markets: US Stock Futures Down Ahead Of Economic Data

Courtesy of Benzinga.

Related SPY The Market In 5 Minutes: GE, Tariffs, Summit, Jobless Claims And More Analysts Weigh In On US-China Trade Developments...

http://www.insidercow.com/ more from Insider

Digital Currencies

How the US Government Could Effectively Use Crypto

The US government could start, or officially endorse an existing crytpo coin. What they would do is build a fee into the software protocol that went to a single address that they control. This is effectively a tax. The fee could be a transaction fee, a percentage of the next block award, or a combination of both. How this works is every single transaction that occurs everywhere wihtin the system, the fee scalped goes directly to this single address that is owned by the IRS, in this case, the "New-IRS." Forget postcards. We're down to a single dude in one office chair in front of one computer. Imagine that being the IRS, because that's where this is going. The consequences of this mechanism are dramatic. First off the IRS is now one guy. Granted, this guy controls the private key for the most valuable thing in the world. This key would be the single most important key right up there with the nuclear launch code, but the system would most definitely still work. More strikingly, the US...

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Biotech

Could this be the year for a Canadian Breakthrough Prize in Life Sciences?

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

 

Could this be the year for a Canadian Breakthrough Prize in Life Sciences?

Courtesy of John Bergeron, McGill University

In 2013, Kyoto University’s Shinya Yamanaka was awarded one of the first Breakthrough Prizes in Life Sciences for his discovery of “induced” stem cells that enabled researchers to convert adult cells back into stem cells.

The Breakthrough Prize is not to be sneezed at. Founded in 2013, the prize “honours transformative advances toward understanding living systems and extending human life.” It’s also the most financially attractive aw...



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ValueWalk

Buffett At His Best

By csinvesting. Originally published at ValueWalk.

Bear with me as I share a bit of my history that helped me create SkyVu and the Battle Bears games. The University of Nebraska gave me my first job after college. I mostly pushed TV carts around, edited videos for professors or the occasional speaker event. One day, Warren Buffet came to campus to speak to the College of Business. I didn’t think much of this speech at the time but I saved it for some reason. 15 years later, as a founder of my own company, I watch and listen to this particular speech every year to remind myself of the fundamentals and values Mr. Buffett looks for. He’s addressing business students at his alma mater, so I think his style here is a bit more ‘close to home’ than in his other speeches. Hopefully many of you find great value in this video like I have. Sorry for the VHS...



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Kimble Charting Solutions

The Stock Bull Market Stops Here!

 

The Stock Bull Market Stops Here!

Courtesy of Kimble Charting

 

The definition of a bull market or bull trends widely vary. One of the more common criteria for bull markets is determined by the asset being above or below its 200 day moving average.

In my humble opinion, each index above remains in a bull trend, as triple support (200-day moving averages, 2-year rising support lines, and February lows) are still in play ...



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Members' Corner

Cambridge Analytica and the 2016 Election: What you need to know (updated)

 

"If you want to fundamentally reshape society, you first have to break it." ~ Christopher Wylie

[Interview: Cambridge Analytica whistleblower: 'We spent $1m harvesting millions of Facebook profiles' – video]

"You’ve probably heard by now that Cambridge Analytica, which is backed by the borderline-psychotic Mercer family and was formerly chaired by Steve Bannon, had a decisive role in manipulating voters on a one-by-one basis – using their own personal data to push them toward voting ...



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Mapping The Market

The tricks propagandists use to beat science

Via Jean-Luc

How propagandist beat science – they did it for the tobacco industry and now it's in favor of the energy companies:

The tricks propagandists use to beat science

The original tobacco strategy involved several lines of attack. One of these was to fund research that supported the industry and then publish only the results that fit the required narrative. “For instance, in 1954 the TIRC distributed a pamphlet entitled ‘A Scientific Perspective on the Cigarette Controversy’ to nearly 200,000 doctors, journalists, and policy-makers, in which they emphasized favorable research and questioned results supporting the contrary view,” say Weatherall and co, who call this approach biased production.

A second approach promoted independent research that happened to support ...



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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

NewsWare: Watch Today's Webinar!

 

We have a great guest at today's webinar!

Bill Olsen from NewsWare will be giving us a fun and lively demonstration of the advantages that real-time news provides. NewsWare is a market intelligence tool for news. In today's data driven markets, it is truly beneficial to have a tool that delivers access to the professional sources where you can obtain the facts in real time.

Join our webinar, free, it's open to all. 

Just click here at 1 pm est and join in!

[For more information on NewsWare, click here. For a list of prices: NewsWar...



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All About Trends

Mid-Day Update

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

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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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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