Posts Tagged ‘Phil’s Stock World’

Stock World Weekly

The latest Stock World Weekly Newsletter summarizing the events of last week, and discussing next week, is now available here. As always, we love feedback. - Ilene 


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Week Gone By at Phil’s Stock World

Week Gone By at Phil’s Stock World 

By Elliott and Ilene 

A man rides a bicycle in front of the construction site of a residential complex in Kolkata August 31, 2010. Tuesday's data showed annual rate of growth picked up to 8.8 percent from 8.6 percent in the previous quarter, underscoring continued growth momentum in Asia's third-largest economy amid a slowing pace of global recovery. REUTERS/Rupak de Chowdhuri (INDIA - Tags: BUSINESS CONSTRUCTION)

Globalism is featured in several of this week’s Favorites articles. The ever insightful Paul Craig Roberts asks whether “economists have made themselves irrelevant” in his article "Death by Globalism".

Michael Synder points out that globalism is no longer "something that is going to happen in the future", but is instead a hard reality that is currently annihilating our middle class in his article "Winners and Losers."  Of our new global economy, Michael writes: 

"…American workers are just far too expensive.  So middle class manufacturing jobs are fleeing our shores at a staggering pace.

Since 1979, manufacturing employment in the United States has fallen by 40 percent.

Are you alarmed yet?

You should be.

The truth is that we did not have to merge our economy with nations like China.  China does not have the same minimum wage laws that we do.  China does not have the same environmental protection laws that we do.  In China, companies can treat their workers like crap.  As a result of open trade with the United States, scores of shiny new factories have opened all over China while once great manufacturing U.S. cities such as Detroit have degenerated into rotting war zones.  We continue to expand trade with China even though their communist government stands for things that are absolutely repulsive and has a list of human rights abuses that is seemingly endless.

But politicians from both parties swore up and down that globalism would be so good for us.  Now we have created a network of free trade agreements that would be virtually impossible to unwind…"

What is the result? We have the disparity of multinational corporations doing remarkably well in the face of a weak and sickly U.S. economy. The large corporations are relying on the U.S. consumer less and less. They have moved their factories overseas, avoided U.S. taxes, laid off U.S. workers, and taken advantage of cheap off shores labor.  And their earnings may continue relatively unharmed by a lull, double dip, or continued recession in the U.S. – depending on whose perspective. (See Consumer Metrics Institute’s report on the U.S. consumer and our economic malaise.) The result of this corporate earnings/U.S. economy disparity is reflected in the stock market’s performance which seems to have decoupled…
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How to Buy Quality Stocks for a 10%-20% Discount & Get $500

Scott Brown at Sabrient has set up a deal with OptionsXpress for those who want to subscribe to PSW and/or Sabrient, and open an account at OptionsXpress.  Here’s the OptionsXpress deal, first with Sabrient. The same deal is available for new and renewing Phil’s Stock World subscribers. (Keep reading below.) - Ilene  

How to Make Money in Stocks and Still Sleep Well at Night …  and Get $500! 

In this wild and crazy market of 2010 the Sabrient Investor’s (H)Edge Virtual Portfolio is UP +6.74% YTD while the S&P 500 is DOWN -0.91%!   The Sabrient Investor’s (H)Edge Virtual Portfolio is a balanced long/short virtual portfolio which aims protects our subscribers in ALL markets. 

How? 

Based on Sabrient’s highly predictive Company Outlook Rank, we can identify the fundamentally strongest stocks with the best valuations and the most upside potential, as well as the fundamentally weakest stocks that should lag no matter what the market does. The resulting long/short virtual portfolio lets you capture the performance spread between the longs & shorts.  

A balanced long/short virtual portfolio like Sabrient’s Investor’s (H)Edge is a great approach to a volatile, unpredictable market.  Every Thursday, David Brown reviews one long and one short, and either renews or replaces the stocks, depending on their current rankings and fundamentals.  Take a look at the latest selections HERE - And click the 2009 Virtual Portfolio link on that page to see all the trades from last year. 

Our backtested, forward-tested and time-tested strategies have averaged +34.1% per year since 2000, providing safety in the 2008 meltdown and on virtually every down-market day in the past two years. The Investors’ (H)edge virtual portfolio has a beta of .25, an alpha of 28.6% and a Sharpe ratio of 1.36, and is designed to profit from both up and down market moves. 


The Sabrient Platinum Subscription:

Investor’s (H)Edge Virtual Portfolio is part of our Platinum Subscription, which also includes: 

• The Select Opportunity Virtual Portfolio, a long/short virtual portfolio for active traders, which is averaging 3.5% per stock trade, with an average holding time in each trade of 16 days. 

• MyStockFinder, a powerful stock search program for finding stocks that match your particular investing requirements, such as stocks with high insider buying or recent analyst upgrades; stocks with high growth rates or strong dividend yields. 

• The Sabrient Ratings Reports that let you see at a glance how Sabrient rates a stock, any stock…
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What “the plot” is all about

What “the plot” is all about

Courtesy of Rev. Todd, Rev Todd’s IRA Plot

Business people looking down at man lying on pavement, elevated view

For several years I have been a wandering stock market pilgrim seeking the holy grail of trading. I started with $2500 from a tax rebate and started climbing the volatile active volcano of penny stocks. I barely escaped the lava and moved through a series of gurus. I journeyed through the lands that were infested with gold bugs; flew (and crashed) with the iron condors, traveled with a trading tribe of “turtle traders” until whipsawed unconscious; and flew too near the sun with Icarus-like option traders.  None of these proved to be the holy grail, since I either had too little cash, too little time or too little patience since I work full-time and cannot devote myself to day trading.

In September of 2008 I discovered covered call writing. Once again I took a beating as the market underwent cardiac arrest in the ICU, but I noticed that while mutual funds were down 40-50%, I was “only” down 30% at the bottom and I recovered all my capital by the following February. I could also sleep at night and didn’t have to be glued to the screen. In the 1st quarter of 2009 I had 14 of 14 successful trades, made 15% writing covered calls, and followed that with making 14% in the 2nd quarter. Sounds like the holy grail, right? However, the VIX was at a peak and the premiums were more magnificent than the pearly gates and heavenly streets paved with gold. Then I got greedy. I succumbed to the sirens promising 100% a year and once-in-a-lifetime investments in breakthrough technologies.  I started to lose money again. 
 
I stumbled into PSW a few months ago and the buy-write strategies and hedges made sense to me. I started making money again. I didn’t find a holy grail, a messiah, nirvana, or the Kingdom of God, but I did start getting my daily bread. Oddly enough I make more money by being conservative than by taking risks.
 
So how did “IRA plot” come about? I assure you I am not affiliated with any Irish revolutionary groups, though I did spend a summer in Belfast. I’m talking about the Roth kind of IRAs. I recently took over managing my new wife’s IRA and my mother’s IRA. Not all the strategies at PSW work in IRA accounts. While Interactive Brokers allows me to sell cash covered naked puts, I cannot buy


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DARK HORSE HEDGE

DARK HORSE HEDGE Weekend Catch-Up 

By Scott at Sabrient and Ilene at Phil’s Stock World

Hedging into the week of August 2nd, the Dark Horse Hedge (DHH) is in a BALANCED tilt (long to short ratio) with 8 LONG and 8 SHORT positions. We used Phil’s BUY/WRITE strategy to enter two of our LONG positions (IM and GCI) at a 10-20% discount to the market.  As you can see from the chart, the SPX wandered between the 50 and 200 day moving averages (MAs) all week before whimpering towards the bottom of the channel Thursday and Friday. The 12-26-9 MACD which is the faster of the 2 technical direction signals we follow has flat-lined at just above +6 and the slower RSI 14-day still remains just below 50.

Without some impressive economic reports coming this week or much better than expected earnings reports, we believe the market will drift down towards and test the 50 day MA. If a bullish tone sets back in, it is doubtful that it could easily push through the 200 day MA.  Resistance points as well as the 50 and 200 day MAs all which fit into a fairly narrow trading channel.

[chart from FreeStockCharts.com]

We are happy with the positions we put on in DHH’s first 30 days of existence and we look forward to capturing more profit as the companies report earnings this week.  We will continue to take profits "after the news" and rotate into newer, fresher positions while keeping an eye on the overall market to adjust our tilt for maximum Alpha,* which is why we write and read DHH. 

Summary of DHH positions in the virtual portfolio

LONG: XRTX, WDC, GCI, IM, DLX, GME, FRZ, and TEO  

SHORT: AIV, STI, HUSA, USG, CLDA, TEX, RAIL, and JOE 

Read previous DHH actions and follow our latest virtual portfolio moves here. > 

*We are aiming to be hedged in our market exposure by being long stocks with the greatest potential to rise and short stocks with the greatest potential to decline.  To identify these winner and loser stocks, we use Sabrient’s Value Change Up (VCU) assessment system. Sabrient’s VCU system is a multi-factor quantitative ranking system that scores over 2,000 stocks and allows us to enter LONG positions in the best ranking stocks and SHORT positions in worst ranking stocks.
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Gilead – Not Your Run of the Mill Mid-Tier Pharma

Gilead – Not Your Run of the Mill Mid-Tier Pharma

Courtesy of Pharmboy

At PSW, we have been hemming and hawing about inflation/deflation, how to right Washington, oil exploration, solar flairs, irrational exhuberance in the market, and why Gilead (GILD) has lost its prominence in the market’s eye.  Experts say it is the company’s pipeline, as one of its flagship drugs is expiring in 2013.  Others allege that the company is being shorted by hedge funds because the short interest is currently trading at 1 day.  

Gilead Sciences, founded in 1987, is a leading pharmaceutical player, with more than 2,500 employees. With headquarters in Foster City, California, and operations spanning across the globe, it focuses its research and clinical programs on antivirals, antifungals and antibacterials.  Gilead’s portfolio of 13 marketed products includes a number of category firsts and market leaders. 

Gilead’s first significant entrant into the HIV market in 2001 was Viread (a nucleotide analog reverse transcriptase inhibitor, or NtRTI). Viread was recently approved for the treatment of chronic hepatitis B.  It was followed in 2003 by Emtriva, and then in 2004, Gilead’s current blockbuster product Truvada (a combination of Viread and Emtriva) was launched.  Gilead’s newest HIV product is Atripla, a combination of Truvada and Bristol-Myers Squibb’s (BMS) Sustiva, which has achieved rapid sales uptake since its launch in 2006.  Below are Gilead’s main income drivers, and as one notices, the HIV franchise is the majority of the company’s income.

In July 2009, Gilead announced a collaboration with Tibotec (a division of t Johnson & Johnson) to develop and commercialize a fixed-dose combination (FDC) of Truvada and Tibotec’s TMC278 (rilpivirine). This decision was to develop, in essence, a second generation Atripla.  This was a wise move by Gilead because GSK has its own integrase inhibitor, GSK1349572, which has shown positive Phase II results and will eventually compete with GILD/JNJ’s fixed dose combination. In addition, GILD will lose patent protection on Atripla in 2013, so doctors (or GSK) could combine the new GSK drug with BMS/s Sustiva, thus inceasing the pricing pressure on GILD. Teaming with JnJ should help maintain Gilead’s already dominant FDC market share which is projected to be 40% of the HIV market.    

As a side note, the total market sales of antiretroviral medications in 2009 were estimated at $11.8 billion – and Gilead owned more than 20% of those net sales But new…
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THE DARK HORSE HEDGE

THE DARK HORSE HEDGE

Silhouette of Horses Jumping a Steeplchase

By Scott Brown of Sabrient and Ilene of PSW

I’ve been down on the bottom of the world full of lies
I ain’t lookin’ for nothin’ in anyone’s eyes
Sometimes my burden is more than I can bear
It’s not dark yet but it’s gettin’ there.
[Bob Dylan]

Seeing no compelling reason to be more bullish on this uninspiring market, we are maintaining our 67% short tilt (weighing) with three new positions to enter this morning.

For reference, we started this virtual portfolio with $100,000 in cash and we allocated $90,000 for intermediate to long-term positions, and $10,000 for occasional swing trading positions.  To date, we are short four stocks and long two. Today, we are going to add two more short positions and one more long position.  

We are aiming to be hedged in our market exposure by being long stocks with the greatest potential to rise and short stocks with the greatest potential to decline.  To identify these winner and loser stocks, we use Sabrient’s Value Change Up (VCU) assessment system. Sabrient’s VCU system is a multi-factor quantitative ranking system that scores over 2,000 stocks and allows us to enter LONG positions in the best ranking stocks and SHORT positions in worst ranking stocks.  This method enables us to achieve greater Alpha (return over market return) and Sharpe Ratios, while maintaining a near zero Beta for Absolute Return. 

Because we are working towards 12 long and 12 short positions, and starting with $90,000 to invest in this strategy, we allocate $7,500 for each long and short position (90,000/12 = $7,500).  (The extra cash generated by short positions is not counted in this calculation.)  

Apartment Investment and Management Co. (AIV)
SHORT AIV at the open on 7/13/10

Apartment Investment and Management Co. is rated a STRONG SELL by Sabrient and is ranked #5 at the bottom of the VCU strategy.  AIV scores poorly in VALUE score of 6.4 out of a possible 100 which is a measure of the relationship between a company’s stock price and its intrinsic value.  Additionally, AIV scores below industry averages in both BALANCE SHEET score of 29.8 versus the industry average of 37.3 (possible range is 0 to 100) and FUNDAMENTAL SCORE of 12 compared with an industry average of 37.3 (possible range


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The Dark Horse Hedge

The Dark Horse Hedge

By Scott Brown at Sabrient, and Ilene, at Phil’s Stock World

Silhouette of Horses Jumping a Steeplchase

Scott Brown, Managing Director – Retail Division at Sabrient, is launching a newsletter with Phil’s Stock World based on the highly successful and popular Investors’ (H)Edge product.  The Dark Horse Hedge newsletter is a Long/Short retail portfolio taking advantage of technical market trends to tilt the balance of LONG vs. SHORT in bearish, bullish or range bound markets for added Alpha (the measure of return on a risk adjusted basis).  Long and short equity positions taken in The Dark Horse Hedge portfolio will be chosen using to Sabrient’s rating system, which is primarily based on fundamental criteria. Because the stock positions will generally be held for intermediate to long periods, these positions are ideal for using with option strategies taught by Phil Davis, of Phil’s Stock World.

The Dark Horse Hedge (DHH) newsletter will follow a number of guidelines in an attempt to minimize systemic risk, or “Beta.” Beta is a measure of the volatility of a portfolio in comparison to the market as a whole.  To keep beta low, the DHH portfolio will have both long and short positions.  Consequently, dramatic moves in the market will always be in the direction of at least part of the portfolio.

Using Sabrient’s rating system, we will focus on being long high quality stocks, and short low quality stocks.  Long positions should fare better than average during market selloffs.  In contrast, the short positions, selected from the lowest ranking stocks, should perform well during selloffs. These stocks are also expected to underperform higher quality names in a stronger market.  This strategy is designed to balance the goal of attaining Alpha with the desire to keep Beta relatively low.

We will follow this list of guidelines in building the DHH portfolio.

1.  When fully invested, the Portfolio will have 24 positions.  However the portfolio may not be fully invested.

2.  Tilting (or weighing) of the portfolio will be based on the position of the SPX relative to its 50 and 200 day Moving Averages

  • If the SPX is below both its 50


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Basic Technical Patterns: The Foundation of Common Pattern Identification

Pharmboy’s latest chapter in his TA eBook – Chapter 7! - Ilene 

Links for previous chapters:

1. Understanding Market Cycles: The Art of Market Timing (Chp. 1),

2. Dow’s Theory of Markets (Chp. 2),

3 & 4. Fundamental vs. Technical Analysis and Types of Technical Trading (Chps. 3 & 4).

5. Stock Charting Basics: How to Read & Understand Stock Charts (Chp. 5 here.) 

6. Using Moving Averages for Long and Short Trades (Chp. 6)

Basic Technical Patterns: The Foundation of Common Pattern Identification

Courtesy of Pharmboy of Phil’s Stock World 

History tends to repeat itself, and trend lines, triangles, and other patterns do work in TA.  Charts show the collective opinions of all market participants for that day, month, or whatever timeframe that is used.  Charts are direct evidence of the trader’s beliefs and feelings, and each movement reflects a bit of human emotion (or at least it did before speed trading – HAL9000).  So, it should be no surprise that patterns repeat themselves over and over.

In Figure 1 below, typical up trends and down trends are shown.  These zigzag patterns are seen all the time, but why do they form?  Let’s say someone bought a stock at a certain point.  If that stock went up, but pulled back to the original purchase price, they will often think that it’s an opportunity to buy more at their original price, thus adding to their position.  This is also the same for shorts when they are able to short a stock at the same price they shorted previously. Then why do peaks form? People sell (or cover) to take profits.  Obviously, any increase in selling will pull the stock back.  Those who bought at a lower level may start buying again.  This repeats and repeats until 1) there is no more stock left for people to buy, or 2) there is too much supply and not enough buyers.  On a larger scale, this is how bull and bear markets begin and end.

Figure 1  Typical up and down trends.

The following basic chart…
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Phil's Favorites

Facebook's Libra cryptocurrency can still take off and revolutionise money

 

Facebook's Libra cryptocurrency can still take off and revolutionise money

Poring Studio / Shutterstock.com

Courtesy of Gavin Brown, Manchester Metropolitan University and Richard Whittle, Manchester Metropolitan University

Facebook’s Libra cryptocurrency has suffered a few setbacks recently. As well as facing ...



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Zero Hedge

Market Spooked By Upcoming "Bad Cop" Pence China Speech

Courtesy of ZeroHedge View original post here.

At roughly the same time that today's Boeing news hit, revealing that instant messages by Boeing employees in 2016 indicated employees misled the FAA about a key safety system on the 737 Max sending both BA stock and the broader market sharply lower as the biggest Dow component tumbled, a second report also hit which added to the risk-off sentiment.

At 12:20pm, Reuters reported that Vice President Mike Pence planned to deliver his second major policy speech on China next Thursday.

...



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Chart School

Gold Stocks Review

Courtesy of Read the Ticker

Gold stocks are swinging back forth between the range, and a break out swing higher is due. Gold stocks are holding a near perfect Wyckoff accumulation pattern. All should get ready to play this sector. Yet we must recognize that gold stocks are a one of the most crazy rides at the stock market fair, so play very carefully.

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GDX PnF chart from within the video

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Important channels around the HUI.
...

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Insider Scoop

48 Biggest Movers From Yesterday

Courtesy of Benzinga

Gainers
  • Hepion Pharmaceuticals, Inc. (NASDAQ: HEPA) shares climbed 43.2% to close at $3.58 on Thursday after the company announced the publication of a research article, "A Pan-Cyclophilin Inhibitor, CRV431, Decreases Fibrosis and Tumor Development in Chronic Liver Disease Models," in the peer-reviewed Journal of Pharmacology and Experimental Therapeutics.
  • Synthesis Energy Systems, Inc. (NASDAQ: SES) rose 26.9% to close at $9.20 after surging 12.24% on Wednesday.
  • Assembly Biosciences, Inc...


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Kimble Charting Solutions

Bank Index Breakout? Stock Market Bulls Sure Hope So

Courtesy of Chris Kimble

One of the most important sectors of the stock market is the banking industry and bank stocks.

When the banks are healthy, the economy is likely doing well. And when bank stocks are participating in a market rally, then it bodes well for the broader stock market.

In today’s chart, we look at the Bank Index (BKX).

As you can see, the banks have been in a falling channel for the past 20 months. As well, the banks have been lagging the broader market during this time as well – see the Ratio in the bottom half of the chart above.

That said, th...



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The Technical Traders

Currencies Show A Shift to Safety And Maturity - What Does It Mean?

Courtesy of Technical Traders

Recent rotation in multiple foreign currencies hints at the fact that a new stage of the “Capital Shift” process is taking place and that skilled technical investors need to pay very close attention to how these currencies continue to react over the next 3 to 6+ months.  In the recent past, most of the world’s foreign currencies were declining in value while the US Dollar continued to strengthen.  In fact, we authored many research articles about these trends and how weakness in foreign currencies will drive new foreign investment into the US stock markets for two simple reasons; strength and security. 

Now that a few of the world’s most ...



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Digital Currencies

Zuck Delays Libra Launch Date Due To Issues "Sensitive To Society"

Courtesy of ZeroHedge View original post here.

Authored by William Suberg via CoinTelegraph.com,

Facebook is taking a much more careful approach to Libra than its previous projects, CEO Mark Zuckerberg has confirmed. 

“Obviously we want to move forward at some point soon [and] not have this take many years to roll out,” he said. “But ...



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Lee's Free Thinking

Look Out Bears! Fed New QE Now Up to $165 Billion

Courtesy of Lee Adler

I have been warning for months that the Fed would need new QE to counter the impact of massive waves of Treasury supply. I thought that that would come later, rather than sooner. Sorry folks, wrong about that. The NY Fed announced another round of new TOMO (Temporary Open Market Operations) today.

In addition to the $75 billion in overnight repos that the Fed issued and has been rolling over since Tuesday, next week the Fed will issue another $90 billion. They’ll come in the form of three $30 billion, 14 day repos to be offered next week.

That brings the new Fed QE to a total of $165 billion. Even in the worst days of the financial crisis, I can’t remember the Fed ballooning its balance sheet by $165 bi...



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Biotech

The Big Pharma Takeover of Medical Cannabis

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

 

The Big Pharma Takeover of Medical Cannabis

Courtesy of  , Visual Capitalist

The Big Pharma Takeover of Medical Cannabis

As evidence of cannabis’ many benefits mounts, so does the interest from the global pharmaceutical industry, known as Big Pharma. The entrance of such behemoths will radically transform the cannabis industry—once heavily stigmatized, it is now a potentially game-changing source of growth for countless co...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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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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Promotions

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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