by ilene - September 18th, 2018 6:37 pm
There’s a new kid on the block. Innovator’s IBD® Breakout Opportunities ETF, ticker BOUT.
The goal of this fund is to identify stocks before they break out. Basically, they’re delivering on a style of technical analysis via machine, which I find intriguing.
When I was trading stocks, I would often buy on the breakout and then sell on the retest. Over and over I would let my emotions get the best of me. Needless to say, it was not a profitable strategy.
Theoretically, an algorithm will eliminate some of these biases that all traders have to overcome. Below is how they plan on doing this.
When a stock reaches a recent high in price and at least four weeks elapse without that high being surpassed, this price is identified as the base price. This base is used to determine those stocks nearing breakouts and those stocks experiencing breakouts. In making this determination, the Index utilizes an algorithm that analyses the following trends for each stock:
1. The length of time from the establishment of the base to the current date.
2. The difference in price between the base and the lowest subsequent price for the stock.
3. The percentage difference between the current price and the high at the start of the base.
4. The percentage difference in price from the stock’s lowest price subsequent to the establishment of the base and its current price.
5. The percentage change in the stock’s price in each of the last three weeks
You might be wondering what happens if stocks are in a lousy environment where they’ breaking down instead of breaking out. They have an answer for that too.
The Index is also designed to be responsive to equities market conditions that provide fewer opportunities to invest in stocks with breakout potential. Upon the occurrence of certain market signals identified by the Index Provider as forecasting a downturn in the equities market, the Index will allocate 50% of its weight to a portfolio composed of U.S. Treasury bills with maturities of one- to
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I must add yet another paen to Phil's "cash and short" call, as my TZA shorts are past paying for Similac and Pampers and have now covered all doctors and Mt. Sinai hospital bills for young Charlotte, as TZA took the portfolio up 10%.
Zeroxzero
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Phil: I have 263 positions - 70% in options ( balance stocks) in three portfolios with a value of 3 mil. YTD profit is about $750,000. Thanks!
Gel1
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New members – a word of advice: you should check out the track record of Phil's last few trades of the year, and what the return would be if you just rolled all the gains into the next years trade of the year. Remember – trade of the year is one he's virtually sure of, and he rarely misses on those
Deano
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Phil… My portfolio, in the past few months, has acheived a high degree of stabilization. I've noticed that on up days, down days, even days, it doesn't matter, my portfolio rarely varies more than 2%. And over the long haul it just slowly increases in value. I attribute this not to investment choices, but to style. Thanks to you and others on this site I'm paying close attention to position size, delta neutrality, downside protection, and concentrating on selling premium rather than buying it. I've developed increasing patience, not having to trade daily, or even weekly. I'm concentrating on the finer points of trading, letting the profits come to me, rather than the other way around. I appreciate the help everyone here has given in getting me focused on this principle. I'm pumped!…in a calm sort of way.
Iflantheman
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Thanks, Phil. I really appreciate your sentiment and commitment! Just want to thank you for what you do for all of us.
JBaker
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Phil – In the event of a mkt meltdown, which of the indices, in your opinion do you think has the most potential for % move down. I'm looking at call options on SDS and the DXD. Any thoughts? Ideas?
Thanks .. and thanks for being a great teacher! I've learned so much in only a month!
Louis631
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Kudos on the POT puts! I studied the charts last night and you couldn't have hit the inflection points more perfectly. Since there are often many head fakes in the charts, that was very well done. I know they can't all work this well, but that was an extra unexpected bonus yesterday.
Ocelli7
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Hey Phil,
You called all the trends and market movements with perfection this week. I enjoyed it! Thanks for keeping us sane!
GClay
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You may wonder if anyone gets anything out of you seminars (or may not wonder). Anyway, I almost never day trade because of my job. Today, I was home due to the snow and since I was behind by 2 weeks on watching your recorded seminars I though I would watch one of them. I set up my pivot point charts in TOS to match the ones in your seminar and made the QQQ trade from this morning. I only bought 5 puts. While I watched the seminar, I would pause then switch back and forth and watch the live QQQ chart. I ended up stopping out for a $170 gain, but it was pretty cool to have the dip and recovery at the same time I was learning the art of stopping out when a pivot line was taken out.
rj_jarboe
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Hi Phil,
Thanks for the free disaster hedge ideas. I implemented variations of two of them on SDS bull call spreads and EEM bear put spreads (haven't done the TZA yet) and they really hedged my short term longs nicely today. Makes it seem a lot less like gambling.
You are the man (of the people)!
Howard Roake
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Phil.... I remember back in March of '09, you stated " Unless you think the country is going to hell in a hand-basket, NOW is the time to do your buying". Do you remember ?
I took your advice, and bought leap $2.00 calls on F, approximately 200,000 shares using the options, for just pennies. Now that was the best Ford I ever owned.... made over $1 mil - thanks go to you Phil. I now drive a Mercedes but still "love" the Ford.
1234Gel
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Happy Thanksgiving Phil and to your family and associates. Also to all of the other fellow citizens of Phil's Stock World. I am particularly happy and thankful that I clicked on your article in Seeking Alpha a number of years ago. That opened the gate to Phil's Stock World and "being the house". My wallet thanks you as does my peace of mind in trading options, stocks and rarely futures. Your liberal views opened up my views—being a boot strapper (pulled myself out of a poor background) I was a CONSERVATIVE—cynical of others who weren't as driven. Now, I am much less so; you have taught me more than how to make money and manage risk. So, again I give thanks to you and the others of PSW!!
Newthugger
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I am an investor, not a trader. The information at Phil's World is top-notch and always relevant. It is great to see your website thriving.
Prof
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Thanks, I managed to make 2k today so I am happy…and feel like I am finally getting it. New equipment and a quiet place to work helps a lot. I am happy for all the members that took your /NKD advice….that was fun I am sure! coke Take your vitamins…I don't know how you do all this! but, keep it up!
Coke
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Thank you so much for the good daily news in review Phil. I love your commentary! It is such a breath of fresh air in the smog cluttered news networks.
RJRoberts
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Hey Phil -- I want to thank you every chance I get for helping me to grow my previous portfolio to being profitable enough to pay off some debts my family had and left me with $1,000 left to use in the markets. You should know that your premium membership is amazing on many levels, You and your readers offer a ton of economic and statistical analysis that I was able to use in my clerical level job in finance. It's a shame that someone as talented and honest as you is not on television each night providing a true service to the investing public and not the clowns and hucksters that are talking up their books to dump on retail investors. Sorry for the long post. I had to say something to you that I never thought I would have the opportunity to. You helped put my family in an almost debt-free life through the stock and option plays that I made during my time as a customer of your service and that has made us very happy. You are a good man and I wish you and your family many years of joy and happiness. I wish I could do ads for you!
DaveJ
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I've recently done exactly what Phil described. I upgraded my ability to trade the IRA acct. by transferring acct. from TDA to TOS. TDA would not allow spreads; TOS does. Neither will allow naked options. With spreads I am able to buy calls or puts several months out then sell front month calls or puts over and over. This allows me to collect premium, which is, of course, the goal. This wasn't an original idea. Phil put me onto it. Since the transfer I've substantially increased my performance in the IRA!
Iflantheman
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I have been here for 8 yrs, and find it the best service out there. There are more eyes on the market in this forum than anywhere, and opinions abound. So, relax, and let the group help you out.
Pharmboy
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Thanks for your thoughts against buying BP ahead of earnings (yesterdays' member comments). It announced a loss of $3.3b and is down 3% in pre-market but still just above the bottom of the chaneel of $40-$50.
mSquare
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Phil fantastic call on the markets… I owe you BIG…thanks and have a great weekend!
Kustomz
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Phil — gotta thank you for your advice this week, and especially today. I took many aspects of your advice this morning, with all of my shorts -- being prepared on the short side, selling into intial excitement, taking the money and running, not being greedy. I also made money on the your /QM and /YM calls. It used to be I would be terrified of weeks like this one. Now, it feels somewhat comfortable, for want of a better word.
Escohen5
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It is hard to learn the process that Phil teaches, but it is worth the effort. I think it is finally sinking in & so I say Thanks teacher for your patience & expertise! I've had a very good week so far & I know it is because of persisting in this learning process that you teach.
Pirateinvestor
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Phil, Thanks for the long calls@ $ 85 on AAPL. A quick $4900. Paid for my subscription!!
Newthugger
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Phil – I wanted to tell you how much of a privilege it is to learn from your every day. You are a shining beacon in the life of so many investors. You have assembled probably the best group of people in the history of financial blogging and you, yourself have done more to help investors in the last 6 months than all previous financial advisors combined.
StJeanLuc
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Phil, did you by chance publish the weekly webinar on Youtube yet? I have been watching these and they are awesome. Unfortunately, I can't cut out of work to attend live webinars. Again, they are just awesome content – thank you.
jcpdx
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Why were the analysts wrong?
If I were a Japanese investor who purchased US stocks prior to November at Y80 yen to the dollar, with the US market up an average of 15% or more and upon selling the asset I covert dollars to Yen, also realizing an additional 25% gain (one dollar now converts to 100+ Yen rather than the 80 I used at time of purchase), I think I would be unloading US assets also.
But analysts never do the math in their articles nor very rarely bring up or discuss the ramifications of currency fluctuations. I don't include Phil in this group as this is a valuable lesson I am learning from him.
Denlundy
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Nice call on the QQQ puts this morning Phil. I bought 10 at .13 this morning for fun day trade. Just closed at .95. Sweet hedge for the day!
RevTodd64
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Phil, thanks for the call on the SKF puts earlier, I'm riding that horsie downhill right now, giddyup!
MrMocha
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Thank you Phil for this site – the trade discussions on PSW are mind boggling. Future trading while learning to be a value investor. Priceless
Joseph
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Maya, After years of being pretty good at picking stocks I still managed to lose almost as much as I made.All the reading Phil asked us to do as a new member (And everything else I can get my hands on lately) has revealed my Achilles Heal.Good stock picks do not necessarily make money. My problem was swinging for the fences. Since becoming a member Jan 1 this year and getting into to scaling into small trades I am amazed at the steady profit growth I have experienced already while not worrying about getting killed. And having fun doing it.. Phil, Thanks for the education, the help you give and the chance to learn more and get better. Also thanks to all the members who have answered the few questions I had when your not around.
Ricpar
by phil - September 18th, 2018 8:41 am
So what?
$200Bn here, $200Bn there – after a while it might add up to something but investors only react AFTER something is a problem and these tariffs don't even take effect until next week (24th). Our wise Negotiator-In-Chief has decided to hit China (ie. the suckers who voted for him and actually have to pay this tax) with a 10% tax on $200Bn worth of Chinese goods that are bought in the US and that tax will rise to 25% – taking another $30Bn out of the pockets of the poor so Trump can continue to give tax breaks to the rich.
But $50Bn worth of taxes on US Consumers isn't going to be enough for President Trump and he also announced his intention to put another 25% tax on another $267Bn worth of Chinese Goods, costing the suckers who voted for him another $66.7Bn and that, plus the first $50Bn – balances the budget for Trump's $100Bn additional tax cut to himself, his family and his friends.
Of course, Trump has pushed most of the bite of these ridiculous taxes posing as tariffs out past the November elections because he knows he can baffle his base with BS for another 45 days and probably keep control of the Senate, which will make it difficult for the Democrats to roll back the tortures he is inflicting on the American people.
As you can see from the cartoon above, at the start of the Great Depression – Trump is nothing more than Herbert Hoover in a new wrapper and history is repeating itself as another one-term President embroiled in non-stop corruption scandals takes a 10-year rally and turns it into an economic catastrophe that almost destroys the country (oops – spoilers!). Interestingly, like Trump, Hoover also made his fortune through dealings with Russians!
As was the case in the late 1920s, the markets are shaking off all the signs of a pending Global catastrophe and continuing to move higher, albeit on the lowest volumes we've seen this century. You can see the "smart money" moving out of the market – even as it continues to make new highs as there are plenty of retail suckers still out…
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by ilene - September 17th, 2018 6:13 pm
One of the big recent changes in American life is the ongoing mass-migration from the middle of the country to the coasts, especially those of the Southeastern and Gulf States. Florida and the Carolinas, along with Houston and surrounding Texas counties, have gained millions of new residents seeking to trade snow and monotony for sun and water. Coastal state governments have by-and-large encouraged this immigration and the resulting construction, paving, and deforestation because new residents pay taxes and developers contribute to political campaigns.
This is turning out to be a huge, perhaps insanely expensive mistake, similar in a lot of ways to out-of-control public pensions: A short-term benefit that produces long-term costs – i.e., an unfunded liability – which accumulates more-or-less secretly until something happens to turn an accounting issue into a cash flow nightmare.
Consider Houston. Over the past few decades hundreds of thousands of people have moved in, and developers have accommodated them by paving over much of the land that used to absorb floodwaters during storms. When hurricane Harvey hit in 2017, the city found itself underwater for days, with damages totaling $125 billion. Much of this was covered by tax payers via federal flood insurance.
Now fast forward to today’s North and South Carolina, also very popular destinations for Americans from colder climes, and the scene of rapid construction of homes, hotels and stores within a few miles of the ocean. In the following article, the New York Times lays out the downside of this kind of short-sighted public policy.
Twenty-nine years ago this month, Hurricane Hugo barreled ashore just north of Charleston, S.C., a category 4 storm with maximum winds estimated at 140 miles an hour and the highest storm tide ever recorded on the East Coast.
Here is where people lived in the region in 1990. Hugo was the nation’s costliest hurricane ever at the time, with damages of about $7 billion.
Over the
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by phil - September 17th, 2018 8:27 am
Holy cow!
I guess it's because I'm one of the last macro fundamentalists left in the markets that I am surprised – no, shocked, by the complete and utter denial the bulls are in regarding what is already the biggest Trade War since the 1930s and will very soon be the biggest Trade War in human history. As noted on the chart to the right though, it's a very normal psychological phenomena – especially when experienced by those unprepared for a loss and, after 10 years of stimulus – there's a whole generation of traders who don't even know what a market loss is…
The market is clearly in denial and the Financial Media is merely a tool of the Investment Banks, so don't expect them to explain things to you and, unfortunately, very few people know what a Trade War actually is or what it does – thanks to a very poor education system – especially when it comes to Finance in this country.
/https://www.thestar.com/content/dam/thestar/opinion/editorial_cartoon/2018/04/08/greg-perry-china-us-trade-war/greg_perry_china_u_s_trade_war.jpg)
China does know what a Trade War is and, just this weekend, the Chinese Government's Global Times said "China will not be content to only play defense in an escalating trade war with the United States. It is nothing new for the U.S. to try to escalate tensions so as to exploit more gains at the negotiating table." Beijing may also decline to participate in proposed trade talks with Washington later this month if the Trump administration goes ahead with the additional tariffs, the Wall Street Journal reported on Sunday, citing Chinese officials.
The Journal report quoted one senior Chinese advisory official saying China would not negotiate "with a gun pointed to its head." Besides retaliating with tariffs, China could also restrict export of goods, raw materials and components core to U.S. manufacturing supply chains, former finance minister Lou Jiwei told a Beijing forum on Sunday, according to an attendee. "Lou Jiwei's approach would feed the most hawkish sentiments in the U.S. government," the person said, declining to be identified given the sensitivity of the matter.
As I have warned since Trump first began…
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by ilene - September 16th, 2018 4:41 pm
Adding this article to Members Corner, in case anyone wants to share their opinions on Nike and Kaep, or on divisiveness in general. Also see "A Warning From Europe: The Worst Is Yet to Come" and "What’s behind the current wave of ‘corporate activism’?" ~ Ilene
Nike, Colin Kaepernick and the pitfalls of 'woke' corporate branding
Courtesy of Simon Chadwick, University of Salford and Sarah Zipp, University of Stirling
Nike reignited a culture war recently by revealing Colin Kaepernick as their spokesperson for the 30th anniversary “Just Do It” campaign. The sportswear brand’s announcement came via a new advert in which young African Americans, Muslim women, physically impaired athletes and white skateboarders all encourage the viewer to follow their dreams, no matter how crazy.
Nike is clearly taking advantage of hot-button social issues to promote their brand, but commercialising human rights is tricky territory. Can a global brand like Nike really support a cause without coopting it? And is the company prepared to face scrutiny over its own ethical record?
Colin Kaepernick, a former National Football League (NFL) star, knelt during the pre-game national anthem in August 2016, in silent protest at police brutality and in the wake of several high-profile police shootings of unarmed African American men.
Nike’s new campaign ad in Times Square, New York. Alba Vigaray/EPA
Dozens of fellow NFL players, of all backgrounds and heritages, followed suit and the protest soon included players from every team in the league. The backlash was swift and severe, with conservative pundits, veterans and president Donald Trump decrying the protests as disrespectful to the American flag and military.
The latest salvo in the debate was launched by Kaepernick’s narration of the advert, prompting a social media hashtag urging people to “#BurnYourNikes”. Some observers in the US seemed to think that Nike had gone too far, while the company’s share price and brand approval ratings fell, at least, in the short-term.
Nike’s skeletons in the closet
Kaepernick’s role as a Nike brand ambassador may seem like political theatre, intended to antagonise Donald Trump and his supporters. However, the reality is much more…
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by Zero Hedge - September 14th, 2018 10:10 pm
Chart: The AI-mazing Patent Race
Artificial Intelligence is transforming the way we live, and the tech giants are racing to stay ahead of the curve.
AI-related funding totaled an estimated $15.2 billion in 2017, a 144% increase over the previous year. The U.S. tech industry leads with a 50% share of those investments, even with China swiftly closing the gap in terms of patents and AI research.
AI itself isn’t new, but boosted computing power, increased connectivity, and the sheer volume of data has paved the way for the fourth industrial revolution of AI.
“The coming era will be looked back upon as the ‘AI era,’ when AI became the defining competitive advantage for corporations, government agencies, and investment professionals,” predicts David Nadler, founder of Kensho Technologies.
THE POTENTIAL OF AI
Artificial Intelligence is less about sentience and more about accelerated learning.
AI technology looks for patterns, learns from experience, and predicts responses based on historical data. An AI-powered computer can’t produce a unique thought, but it can probably predict yours. The end result: AI is able to learn new things at such a speed that it can predict your behavior and preempt your requests.
From the advancements in natural language processing that make Siri and Alexa possible, to the machine learning advancements that give robo-advisors their trading chops, AI’s ability to simulate human thinking means it can also streamline our lives. It can preempt our needs and requests, making products and services more user friendly as machines learn our needs and figure out how to serve us better.
This makes AI a vital source of competitive advantage.
AI’S COMPETITIVE ADVANTAGE
In their quest to stay on top of the Silicon Valley food chain, familiar tech and retail giants are dipping their toes in AI to execute diverse strategies:
Amazon
Amazon leverages AI technology to analyze and predict your shopping patterns. Alexa is very Artificially Intelligent indeed, and the revolutionary Amazon Go model continues to push the boundaries of AI tech on the ground.
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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...
Ilene is editor and affiliate program
coordinator for PSW. She manages the site
