Posts Tagged ‘EPI’

Monday Market Movement – Waiting on the Fed

9-12-2014 4-25-40 PM bullsMore bad news today.  

China's Industrial Output is at its lowest level since the 2008 crash and Hong Kong stocks dropped 1%, the 7th consecutive down day over there and the Royal Economists at the Bank of Scotland slashed their forecast for China as worries rise that the world's second-largest economy is headed for another slowdown.  Too bad for them, they are just catching up to what we told you a month ago, on 8/18, when I said in the morning post:

Chinese Banks' Loan-Loss Reserves have fallen to the the lowest levels in 3 years — We shorted India last week (EPI) and now FXI has got my mouth watering as a potentially good short.  I'd feel better about taking up a short on FXI at $45, not $42 but the Jan $42/38 bear put spread is just $1.80 on the $4 spread and that makes it very interesting as it pays 122% on a less than 10% decline in the Chinese markets – a nice way to hedge your bullish China bets!  

As we expected, there was a little more gas in the tank but now we're right back on track as the magical China story begins to show its age.  The benchmark index for the Asian region, the MSCI All Countries Asia Ex-Japan in U.S. dollar terms, is down 2.2% since reaching the year's high earlier this month.  Saturday's weak economic data—including news that August electricity output fell 2.2%—suggest that earlier government stimulus measures lack staying power.

FXE WEEKLY"The economy is losing steam very quickly in August," said Macquarie Group economist Larry Hu. "Previously when they stimulated the economy, private companies followed, leading to a restocking cycle. But this time, the private sector is so cautious."  "The IP number is a surprise because Premier Li talked in Tianjin about a quite stable situation," said Mizuho economist Shen Jianguang. "I think, very soon, they're reaching a moment of truth. If they don't ease, the economic deceleration will come much faster."…
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Thrilling Thursday – Consumers Still Unemployed, but Shopping!

The MSM is so happy about the February Monster Employment Index!

They’ll tell you it’s up 10 points from January without mentioning that January was the worst month of the past 12 and, in reality, we are up just 2 points from last February when the shockingly poor data we were seeing sent the S&P all the way to 666 the next month.  Today though, it is considered a reason to rally as people watching the MSM will believe anything the talking heads tell them because they don’t get shown the actual results and they trust their talking heads to have checked the facts carefully, rather than make them up, which is pretty much what they do.

We discussed the shenanigans of the ADP report in yesterday’s post and I did warn you that it was a fake rally based on happy headlines papering over poor data.  As we expected, the market giddiness persisted until about 11:30 and then reality began to bite back.  This was FANTASTIC for us as we were playing bearish into the rally but it’s very scary to hold bearish positions overnight but there’s no reason to hold options overnight when you pick up plays like our 9:54 Alert play on the DIA $103 puts, which averaged in at .77, hit $1 (up 30%) at 2:45 and finished the day at .94 (up 22%).  You HAVE to learn to be satisfied with making 20% on day trades and cashing back out.  Cash is flexible – overnight positions are not…  In fact, since we did cash out yesterday, I was able to send out an overnight Alert to Members with a short on the oil Futures as they ran up to 80.50 which was good for a quick victory and then another this morning at $81, which is already up .30 with a .06 trailing stop (futures pay $10 per penny per contract so lots of fun for morning, pre-market trading!). 

We went longer on our oil and gold shorts (in yesterday’s post it was GLL Apr $9 calls at .65) because we don’t expect them to resolve quickly but the chart on the left illustrates why we also firmly believe that this commodity rally is BS.  This is a chart of the Employment to Population Ratio for Men 25-54 Years Old since WWII.  Kind of puts a 2% year over year rise in the Monster Employment Index into perspective doesn’t it?  20% of the men in the United…
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Global Chart Reveiw Shows Key Inflection Point

Chart Review by Michael Clark

“By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens.”

    -- John Maynard Keynes

SO, IS THIS FINALLY THE 'REAL' CORRECTION?

What a week it was.  The Bears gave the Bulls some payback.  Obama got a wake-up call.  And the banks got a well-deserved scare (and we hope they will get a well-deserved hair cut).

The markets reacted, as one might expect, with selling.  Actually, the selling began before the Massachusetts election and before Obama sent a shot across the Goldman Sach's bow.  Last week Intel announced surprisingly strong earnings; and the stock started up and then sank.  For the past half-year investor behavior had been the reverse: a buying spree for any stock that did not lose as much as it might have — beating 'Street expectations' that had been dumbed down over and over again during a quarter so that the company could report 'surprising' strength.  Suddenly, now, even good earnings are being greeted with selling.  Then came Massachusetts — wasn't that a Bee Gees' song?
 

All the lights went out in Massachusetts

Anyway, readers want to know where the markets stand today, after the sell-off this week.  My view of it — my 'view', not my gut-feeling — is that we are, so far, merely correcting from an over-extended rally.  This rally has been bizarre, to say the least.  This has been a 'fear rally' — usually the 'fear' side of the equation is when selling comes in, 'greed' driving the expansion.  But fear of systemic failure has driven this rally; and Ben Bernannke has been the captain sailing the 'Boat of Fear',   Ben's logic — that more debt will solve the insolvency crisis — has a shadow side, the logic that a collapse in stock prices will result in systemic failure, international chaos, revolution, repression…made him believe that preservation of the status quo was requiired, at any price.  A 'make-believe' recovery could be jump-started, perhaps, if the Fed could just stimulate (and simulate) another asset-bubble.  After all – that is how his mentor and predecessor, Alan Greenspan, had become the darling of the coctail party crowd, leading member of Time Magazine's 'Committee to Save the World';
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Zero Hedge

Italy Rejects Two More NGO Migrant Ships; Merkel Scrambles To Keep Job As German Lawmakers Revolt

Courtesy of ZeroHedge. View original post here.

Italy demanded on Saturday that the Netherlands recall two NGO-operated migrant transport ships flying the Dutch flag, after Italian Interior Minister Matteo Salvini warned that they would not be allowed to dock in Italian ports. 

The ships are currently sitting off the coast...



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Phil's Favorites

Short-term changes in Antarctica's ice shelves are key to predicting their long-term fate

 

Short-term changes in Antarctica's ice shelves are key to predicting their long-term fate

The northeast edge of the Venable Ice Shelf, near Antarctica’s Allison Peninsula. NASA/John Sonntag, CC BY

Courtesy of Helen Amanda Fricker, University of California San Diego; Fernando Paolo, California Institute of Technology; ...



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Digital Currencies

CIA 'Neither Confirms Nor Denies' Knowledge Of True Identity Of Satoshi Nakamoto

Courtesy of ZeroHedge. View original post here.

Authored by Helen Partz via CoinTelegraph.com,

The U.SCentral Intelligence Agency (CIA) has “neither [confirmed] nor [denied] the existence” of information regarding the real identity of ...



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Insider Scoop

Wells Fargo Sees More Upside For WWE Thanks To 'Raw And 'Smackdown'

Courtesy of Benzinga.

Related WWE 10 Biggest Price Target Changes For Friday 8 Biggest Price Target Changes For Monday ...

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Chart School

Decision Time for Dow and Semiconductor Index

Courtesy of Declan.

Bulls have done a good job of clawing back the losses generated by the individual days of selling which have peppered the market since April's lows.

The S&P had reversed from the point of the March high in what looked to be a good shorting opportunity but the lack of follow-through leaves this play vulnerable to a swift exit. A short-stop at 2,792 is the best protective play but further highs are looking more likely.


The two indices which have the most to offer are the Dow and the ...

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Biotech

Mind molding psychedelic drugs could treat depression, and other mental illnesses

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

 

Mind molding psychedelic drugs could treat depression, and other mental illnesses

By agsandrew/shutterstock.com

Courtesy of David E. Olson, University of California, Davis

It seems that psychedelics do more than simply alter perception. According to the latest research from my colleagues and me, they change the structures of neurons th...



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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.

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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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