Posts Tagged ‘Live Trading Webinar’

Tempting Tuesday – Low Volume Rally Challenges Our Bounce Lines

RUT WEEKLYIt LOOKS impressive, doesn't it?  

As I said to our Members this morning in our Live Chat Room, all is going according to plan, as we expected to see strong bounces in our indexes by Wednesday – no matter what news or earnings turned out to be.  If the powers that be want the market to bounce – it bounces.  

Our general rule of thumb is that dip buyers only learn their lesson after they have been burned 3 times and, so far, only the August dip buyers are being relly burned but a failure to retake that line and a move lower – that might get them to think twice about mounting another rescue effort next time we test 1,050 on the Russell.  

On this next chart, you can see how the various Fed speakers were used at key inflection points to guide the markets exactly where they wanted them to go.  

As you can see from this S&P chart with Fed notes attached, the manipulation we told you about on 10/6 (see: "Market Mayhem – 12 Fed Speeches in 5 Days Causes Chaos") is merely playing out according to plan and this is why we were able to take full advantage of both the dip (see: "Money-Making Monday: How to Profit from a Market Correction") and the bounce (see: "Wednesday Market Weakness – Oil Collapses to $80, Good or Bad?").

In fact, the TNA Oct $58/60.50 bull call spread that we pointed out last Wednesday at $1.12 closed on Friday morning at $2.40 – up a very nice 114% in 48 hours for those of you who get our morning newsletter (which you can subscribe to here).  Our suggested roll to the Nov $56/63 bull call spread at $3 still has to play out but, so far, we're at $4, so up 33% in 4 trading days is "on track" towards our planned 133% gain in 30 more days.  

This is how rich people get richer folks – if you are in the top 1%, the Fed is out there working for us –
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Testy Tuesday – 10% and/or Bust!

How low can we go?  

So far, the Russell is the only index that's gone through a full 10% correction – falling from 1,180 in early September to 1,050 yesterday – actually 11% – so far.  According to our 5% Rule™, if the 10% line is going to hold over the long term, we should hold -12.5% on any additional move down – that would be 1,050 from the 1,200 line.  Let's call that our line in the sand for now

Meanwhile, as I noted in our Live Member Chat room – we're comfortable going long on the Russell Futures (/TF) over the 1,150 line, looking for a nice run back to 1,080 but THRILLED with 1,060 – as that's already +$1,000 per contract!  Failing to get back over 1,060, however, will be a sign that there's likely more downside to come. 

Of course, thanks to the 5% Rule™ and our Big Chart, we knew to get bearish as soon as 1,200 failed on the Russell, way back in July.  In fact, on June 30th, I titled our morning post: "Monday Misgivings – CASH!!! Is King as we Begin Q3" saying:

I'm NOT going to depress you.

If you want to be depressed about the market, check out my Twitter Account, where I posted our Morning Alert to Philstockworld Members (and you can become one of those HERE) in which I aired my concerns with the Global Macros.  

Last week we discussed the various forms of market manipulation that are keeping us at record highs and, on Friday, I asked "How Many Countries are Faking Economic Data?"


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Market Mayhem – 12 Fed Speeches in 5 Days Causes Chaos

Get ready for a wild week. 

FOMC minutes are released on Wednesday at 2pm and there are a record 12 Fed speeches in the days that surround them.  Expect the market to gyrate wildly with each tweetable quote and it all kicks off this afternoon with Treasury Secretary Jack Lew, followed by KC's Hawkish Esther George at 8:30.  

Tuesday we have Kocherlakota (hawk) and Dudley (dove), Wednesday is Evans (dove) and the minutes.  Thursday we have Bullard (hawk), Tarullo (dove), Lacker (uber hawk) and Williams (dove) ahead of the realease of the Fed's shocking balance sheet and a look at the ever-expanding US Money Supply.

Friday ends with a bang as we hear from Plosser (uber hawk), George again, Fisher (uber hawk) and then Lacker again – so the hawks very much have the last word into the weekend.  It's not much of a data week (next week is a doozy, though) and, to summarize it's hawk, hawk, dove, dove, hawk, dove, HAWK, dove, HAWK, hawkHAWK, HAWK - do you think, perhaps, the Fed is trying to tell us something?

 

The next Fed meeting is October 28th and we'll hear their decision on the 29th.  If they don't begin to tighten at this meeting, there is no way they'll do it right before Christmas at their last meeting on the 16th.  It seems to me, they are going to be setting expectations for some hawkish action this week and the reaction will give them time to contemplate it going into the next meeting. 

Embedded image permalinkWhat's keeping us from getting too hawkish (bearish) is this chart from Macrobond, which points out that, the last 3 times 10-year rates have been this low, the Fed has begun major rounds of EASING, not tightening policies.  QE increases the money supply and that forces note rates up to compensate and Jack Lew is the guy who has to borrow the money at those rates – so you can see how this week will all tie together once the dust settles

As a hedge, for our Member Portfolios, we're favoring SQQQ (now $36.55) and DXD (now $24.52) to protect us from another…
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Which Way Wednesday – How Low Can We Go?

INDU DAILYWhat a fun market to play!  

Yesterday, in our Live Member Chat Room (you can subscribe here), at 11:13, in anticipation of a wierd day, I put up a bullish and a bearish trade idea for our Members.  The cool thing is, both sides won!  Our two trade ideas (which we went over in our Live Webcast at 1pm) were:

If you want to play for an AAPL pop this afternoon, the QQQ weekly $100 calls are just .40 and QQQ topped out at $100.33 yesterday.  Figure AAPL pops 2.5% and that pops the Nas and QQQ 0.5% so $100.50 + premium could be good for 50% if AAPL gets a good reaction – if not, it's probably going to lose less than a direct play on AAPL would. 

TZA/Sn0 – Well TZA is only at $14.50 so the spread is half in the money at net $1.25 so it still has good upside if you add to it but I'd rather get the Jan $15/20 bull call spread at $1 as that gives you more time and more upside – if your TZA hedge goes in the money.  That way, you can take $2 off the table on the Oct spread and know you still have plenty of upside if TZA keeps going up on you and also less downside exposure if it flips the other way.  

When our 1pm Webinar started (at the same time Apple's conference started), the QQQ calls were just 0.42 and still playable and, as you can see on the chart, we even had a dip down to 0.30 briefly but that line held and we then jumped 100% back to 0.60 and then on to 0.72 before dropping back to 0.60, where we took our expected 50% gains and ran.  

If you missed our Webcast yesterday, you should check out the replay because we discussed WHY we made that particular pick and HOW we selected it – very educational!  That's because, at Philstockworld, our goal is to TEACH you to be a great trader – not just give you great trades.  


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Testy Tuesday – 50 DMA Spectacular!

You've gotta love those trend lines.

Chart people sure love them and we love chart peopel because they are SOOOOOOOO predictable and predictable behavior is behavior we can bet on and that makes us happy.  Today we'll be seeing the 50-day moving averages on the Dow, the NYSE and the Russell all tested at the same time – what happens next will tell us a lot about this rally.  

As I pointed out to our Members in our Live Chat Room this morning, though we may be past our bounce levels and though we are now challenging the 50 dmas, we still have 3 of 5 of our Must Hold levels red on the Big Chart – that's not too impressive.  Consider what a 50-day moving average is.  It means that, over the last 50 days, half the time the index has been above the line and half the time it's been below – so how impressive should it be to see the index back in the middle?

SPY 5 MINUTENonetheless, Chart People believe it's some mystical symbol that gives them a rally signal and half the time they are right – so the religion of TA continues to prosper!  As you can see from Dave Fry's SPY chart from yesterday, 75% of yesterday's gain came on no volume as we gapped up in the Futures and the rest of the day's trading was one of the lightest of the year.  

The reason I like Dave is because he's one of the only TA people who actually pay attention to volume and this volume is total BS.  Still, it's enough to stampede the retail suckers back in and God bless them because they throw money at us to sell them the things we liked when they were out of favor.

In May and June, for example, we compiled a Buy List for our Members, which had 29 trades we liked for the rest of 2014.  Here's a few that we are done with already:


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Technical Tuesday – Weak Bounce Sucks in the Suckers Once Again

Screen Shot 2014-08-04 at 8.59.13 AMWhen will they ever learn? 

Actually it's a rule of thumb at PSW that dip buyers need to get burned 3 times before they wise up to a proper correction, so they still have at least another try in them before they finally walk away from this crazy market.  As you can see from Oppenheimer's S&P chart, 56% of the S&P has plunged back below their 50 dma in the past 30 days.

This is EXACTLY what I've been warning you about.  At the same time the indexes LOOKED like they were rallying, MOST stocks were actually being dumped while a few (AAPL, for expample) were kept aloft to maintain the ILLUSION that the market was still strong.  That's how they keep the retail buyers moving in while the institutional investors head for the hills.  Yesterday's action was nothing but another low-volume bounce – the kind we teach our Members to ignore:

AlphaCapture

Short-term, we're certainly oversold but we'll be very critical of a low-volume recovery until we see those 50 dmas retaken on the indexes.  Those are way up at 16,877 on the Dow, 1,954 on the S&P, 4,368 on the Nasdaq, 10,912 on the NYSE and 1,160 on the Russell.  Anything less than that and there's nothing to be particularly bullish about. 

That doesn't stop us, of course, from picking individual short-term longs.  On Wednesday, for example, I was on TV on Money Talk and we featured this play on GTAT as my "Options Play of the Month."  Last night, GTAT knocked it out of the park on earnings and the stock shot up over 10% to $15+ already in pre-market trading.  That will put us well on track to the full $14,000 return on this spread and a 1,650% gain on cash ($13,200 profit on the $800 we invested)!  Not bad for a few day's work, right?  

By the way, if you never want to miss trade ideas like GTAT again – sign up right here for Membership and you will be among the first to hear about our new trade ideas every day!

We're still running our SQQQ hedge as we didn't think yesterday's…
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Which Way Wednesday – Fed Minutes Pending

SPY 5 MINUTEFed day (again). 

Yesterday was TERRIBLE, with volume finally coming back – and it was all downhill, with 3x more declining volume than advancing.  Still, as you can see from Dave Fry's SPY chart, the fix was in and the failure to hold $196.50 during trading hours was corrected at the bell by the powers that be, forcing the Market-on-Close suckers (401K, IRA, ETFs) to pay an extra 0.2% for their fills

There's something strangely comforting about playing a rigged game like this.  I yesterday's live webcast, we were able to make a quick $150 per contract playing a very predictable bounce in the Russell Futures (you can see the Webinar Replay HERE).  

Of course that was small potoatoes compared to the trade ideas we gave you in yesterday's morning post (which you can have delivered to you every day by subscribing here) as the TZA Aug $14 calls shot up from 0.91 to $1.20 - up 32% for the day.  

The QQQ calls I mentioned were the July $97 puts and we closed those out at $2.30, up 47% in less than a full day.  

With returns like that, we could compound $1,000 into $1M in no time at all!  wink

Though they were, in fact, small positions, our entire Short-Term Portfolio jumped up 2% on the day – as it's positioned bearish to protect our much larger and still bullish ($500K) Long-Term Portfolio, which is weathering this little storm quite nicely as we wisely moved it to mainly cash when we thought the market was toppy.  

Now we anxiously anticipate earnings and the potential to bargain-hunt some more.  

As you can see from our Big Chart, the Nasdaq and Russell were saved by their 5% lines (2.5% on the RUT) but the NYSE failed their critical 11,000 line and now we are 3 of 5 bearish and that means we lean bearish until one of our 3 lagging indices gets back over their line.  


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Phil's Favorites

The Real World

 

The Real World

Courtesy of 

“What’s going on in the stock market?”

This usually isn’t an easy question to answer. But we live in unusual times and right now the stock market is very easy to explain.

Look through a few dozen charts and you’ll find a very clean narrative. Today’s winners were last year’s losers and today’s losers were last year’s winners. Said differently, stocks in the physical world are outperforming stocks that live in the digital world.

Look at this chart which compares the two groups. In the physical world, we have Macy’s, Marriott, MGM, Royal Caribbean, Delta, Simon Pr...



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Zero Hedge

Kolanovic: Most Are Unprepared For The Coming Persistent Inflation Shock

Courtesy of ZeroHedge View original post here.

For the past two years, JPMorgan's head quant and resident permabull, Marko Kolanovic, has been periodically predicting an imminent rotation out of growth and into value stocks (a rotation which had failed to take hold until earlier this year when we finally saw some glimmers of value outperformance). Most recently, Kolanovic predicted in February that March would see a major move higher in commodity names as vol-control funds and CTAs started buying up commodity and reflation-linked stocks on the 1 year anniversary of the covid crash only to see the energy sector slump in the next two mont...



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Biotech/COVID-19

India COVID crisis: four reasons it will derail the world economy

 

India COVID crisis: four reasons it will derail the world economy

India is the fifth largest economy in the world. Deepak Choudhary/Unsplash

Courtesy of Uma S Kambhampati, University of Reading

The second wave of the pandemic has struck India with a devastating impact. With over 300,000 new cases and 3,000 deaths across the country each day at present, the total number of deaths has just passed the 200,000 mark – that’s about one in 16 of all COVID deaths across the world....



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Digital Currencies

Historic Reversal: For The First Time Ever Ether Options Trading Volume Surpasses Bitcoin's

Courtesy of ZeroHedge View original post here.

The world is gradually realizing that whereas bitcoin is a one-trick pony (one which may or may not be replaced by central bank digital currencies), it is ethereum that is the truly revolutionary architecture powering the new digital realm. We saw this on Monday when not only did ethereum soar as bitcoin prices stagnated, but that's also when Crypto derivatives exchange Deribit experienced an unusual trend for the first time ever: its ether (ETH) options trading volume (...



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Chart School

Yellen can not stop the dollar decline

Courtesy of Read the Ticker

Printing money results in a lower currency, so long as the currency does not fall too fast.

Previous Post: US Dollar Forecast - Weakness

Here are the very strong fundamentals for a lower US dollar: 

(a) US inflation exploding.
(b) Massive US twin deficits.
(c) Better conditions in Europe.

However French election worries in 2022 Q1 and Q2 may provide US dollar strength (via European weakness) after Christmas, but this strength may come after a low in the DXY near $84.  

It looks like Yellen knows a down swing in the US dollar is near because ...

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Politics

If China's middle class continues to thrive and grow, what will it mean for the rest of the world?

 

If China's middle class continues to thrive and grow, what will it mean for the rest of the world?

Over the past few decades, hundreds of millions of Chinese citizens have become part of the middle class. AP Photo/Ng Han Guan

Courtesy of Amitrajeet A. Batabyal, Rochester Institute of Technology

China’s large and impressive accomplishments over the past four decades have spurred scholars and politicians to debate whether the decline of the West – including the ...



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ValueWalk

Managing Investments As A Charity Or Nonprofit

By Anna Peel. Originally published at ValueWalk.

Maintaining financial viability is a constant challenge for charities and nonprofit organizations.

Q4 2020 hedge fund letters, conferences and more

The past year has underscored that challenge. The pandemic has not just affected investment returns – it’s also had serious implications for charitable activities and the ability to fundraise. For some organizations, it’s even raised doubts about whether they can continue to operate.

Finding ways to generate long-term, sustainable returns for ...



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Kimble Charting Solutions

Will Historic Selloff In Treasury Bonds Turn Into Opportunity?

Courtesy of Chris Kimble

Long-dated treasury bonds have been crushed over the past year, sending ETFs like TLT (20+ Year US Treasury Bond ETF) spiraling over 20%.

Improving economy? Inflation concerns? Perhaps a combination of both… interest rates have risen sharply and thus bond prices have fallen in historic fashion.

Today’s chart looks at $TLT over the past 20 years. As you can see, the recent decline has truly been historic. $TLT’s price has swung from historically overbought highs to oversold lows.

At present, the long-dated bond ETF ($TLT) is trading 7.8% below its 200-...



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Mapping The Market

Suez Canal: Critical Waterway Comes to a Halt

 

Suez Canal: Critical Waterway Comes to a Halt

Courtesy of Marcus Lu, Visual Capitalist

The Suez Canal: A Critical Waterway Comes to a Halt

On March 23, 2021, a massive ship named Ever Given became lodged in the Suez Canal, completely blocking traffic in both directions. According to the Suez Canal Authority, the 1,312 foot long (400 m) container ship ran aground during a sandstorm that caused low visibility, impacting the ship’s navigation. The vessel is owned by Taiwanese shipping firm, Evergreen Marine.

With over 2...



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Promotions

Phil's Stock World's Weekly Webinar - March 10, 2021

Don't miss our latest weekly webinar! 

Join us at PSW for LIVE Webinars every Wednesday afternoon at 1:00 PM EST.

Phil's Stock World's Weekly Webinar – March 10, 2021

 

Major Topics:

00:00:01 - EIA Petroleum Status Report
00:04:42 - Crude Oil WTI
00:12:52 - COVID-19 Update
00:22:08 - Bonds and Borrowed Funds | S&P 500
00:45:28 - COVID-19 Vaccination
00:48:32 - Trading Techniques
00:50:34 - PBR
00:50:43 - LYG
00:50:48 - More Trading Techniques
00:52:59 - Chinese Hacks Microsoft's E...



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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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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. Contact Ilene to learn about our affiliate and content sharing programs.