Posts Tagged ‘PPI’

Thursday Fakery – India’s Industrial Output Revised Down 83%

EPI WEEKLYFirst the good news: 

India's industrial production grew at a slower-than-expected pace in February, weighed down by a contraction in consumer durables and consumer goods.  Production of consumer durable goods shrank 6.7 percent in February from a year earlier. Consumer goods contracted 0.2 percent on year.  Inflation is still running at 6.7% but at least it's down from 6.95% last month.  Now the bad news, January's Industrial Production Report has been revised down from a blistering 6.8% to an almost contracting 1.14% (and when it's that low, 0.04% really matters!).  

It turns out the massive 38% run in the EPI based on all these FANTASTIC numbers coming out of India may have been based on totally false information and it's funny how the selling begin along with the release of that spectacular 6.8% report – almost as if some Bankster was pumping out fake data in order to bring in the suckers so he could unload his shares before the real data came out.  

Not that that would happen in our fine Kleptocracy, right?  We had a similar run-up in our markets as analysts raised their earnings expectations for the S&P 500 from $90 to $100 to $110 and then raised the multiple they felt should be applied from 10 to 11 to 12 to 13 to 14 to 15 or even 16 – coming up with huge targets for the S&P – as well as our other indexes.  This caused our markets to rocket higher as it was all sunshine and lollipops from our Corporate Media – all the way back to October.  

Now that all the sheeple have been herded into the markets at those MASSIVE valuations, suddenly estimates are going the other way – $105, $102 and now Gary Shilling says $80 may be the right number.  

Shilling notes the S&P's dependence on foreign earnings, a stronger Dollar, higher oil prices, consumer retrenchment and a hard landing in China (and India!) and he recommends going long Treasuries and short stocks and commodities (see Gary's 2012 Investment Themes).

 

SPY WEEKLYGarry was right on the money in 2011, missing just 3 out of
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Toppy Tuesday – Can the Dollar Fall Faster than our Indexes?

It's a race to the bottom!

While we may have thought we were flatlining yesterday near our breakout, Europe and Asia had a different view of our markets as we pulled back -0.5% to -1.73% when priced in other currencies.  While you may not care what happens in other countries, there are 6.5Bn people who would disagree with you there and the US is not the World leader anymore (despite what the citizens of the US may think) – we can no longer afford to ignore things like how exchange rates affect us.  Here's the chart for the Dow, S&P and Nasdaq priced in Dollars, Euros and Yen for the past two months:

Fortunately for the bulls (especially the commodity ones), the dollar has resumed it's pathetic decline as Obama and The Bernank have combined to dilute our currency by another $2Tn over the next 48 months, from about $14Tn to $16Tn (+14%) plus, possibly, the $110Bn of new $100Bills the Treasury is trying to run off.  This has sent the dollar back down from it's Thanksgiving high and now it's going to be all about whether or not we can hold that 78.5 line as our Congress finalizes their vote on the Obama Tax Cuts and another $1,000Bn of US debt taken by our citizens in order to hand another $650Bn to the top 1%.

When $100Bills are being printed faster than rolls of Charmin are being made, your currency is probably on it's way to a crisis.  You reach a certain point at which it's cheaper to just wipe your butt with dollar bills than to go to the store and buy toilet paper and, of course, we've all seen pictures of Germans in the 1920's, fueling their fireplaces by burning bills, which were cheaper than wood.  Of course stocks and commodities are going up when priced in dollars – they are making more dollars every day, even Disney now has cartoons trying to explain to kids why this is a bad idea.

On top of the relentless devaluation of our dollar-denominated assets, we also have wild rumors driving up demand for commodities by speculators, who are generally…
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Federally Frightened Friday

The Fed raised the discount rate – Big Deal! 

As I said in my Weekly Wrap-Up, recessions are for wimps and kudos to the Fed for finally pulling out the stick after all the soft talking they've been doing.  Meanwhile, I do not see what all the fuss is about – I did the math for Members last night and banks borrow about $89Bn at the discount window on a good day and 0.25% of $87Bn is a grand total of $22M – this is NOT going cause the fall of Western Civilization people!  What it does do is stop making the Fed the lender of first resort, which was never supposed to be their function in the first place

The MSM should be more concerned with the end of the TALF, which is where the Fed buys up toxic assets from the banks at face value (we'll all be paying for that later) and they just announced that the Fed's holding of Mortgage-Backed Securities went over the $1Tn mark yesterday, bringing the Fed's Balance Sheet to $2.25Tn of very questionable assets that they've bought for us from the banksters. 

Speaking of banksters – Kudos to Matt Taibbi for his excellent Wall Street’s Bailout Hustle.  As I said to Members, if it wasn't for Matt and Dylan Ratigan, I would have to be writing about this stuff instead of following the markets.  Thank goodness there are a few top-notch people investigating this nonsense with the ability to communicate their findings in a way that makes it interesting:

The nation’s six largest banks — all committed to this balls-out, I drink your milkshake! strategy of flagrantly gorging themselves as America goes hungry — set aside a whopping $140 billion for executive compensation last year, a sum only slightly less than the $164 billion they paid themselves in the pre-crash year of 2007.

The question everyone should be asking, as one bailout recipient after another posts massive profits — Goldman reported $13.4 billion in profits last year, after paying out that $16.2 billion in bonuses and compensation — is this: In an economy as horrible as ours, with every factory town between New York and Los Angeles looking like those hollowed-out ghost ships we see on History Channel documentaries like Shipwrecks of the Great


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THOUGHTS ON THIS MORNING’S DATA

THOUGHTS ON THIS MORNING’S DATA

Courtesy of The Pragmatic Capitalist

This morning’s shot across the bow came to us courtesy of China on reports that several Chinese banks have been told to curb their lending for the remainder of the month.  There is a growing sense of concern about the Chinese markets.  With property prices surging and a stimulus package that is still running hot, the Chinese might have added too much gas to their own fire.  Market participants are very aware of the importance of the Chinese markets to the global recovery.  Losing Chinese growth would certainly cause a massive relapse in the global economy.  If China sneezes the world will catch a cold….

Low angle view of the Acropolis and Parthenon, Athens, Greece

Making matters worse is the growing concerns in Greece.  As we mentioned earlier today the term structure in Greek sovereigns inverted – something we saw in Merrill and Lehman CDS just months before they went bust. This puts global leaders in quite a quandary.   I view last nights vote in Massachusetts as a sign that bailout nation is over with.  Any politician that votes for a bailout going forward will be tarred and feathered.  While Greece is likely to receive some form of aid this growing negative mentality could create future problems should another U.S. corporation (or state) require assistance from the Federal government. We tried to kick the debt can down the road and it’s looking like we’re going to need to kick it again (or heaven forbid – deal with it!).

Earnings were a bit mixed this morning, but generally better than expected. Aside from misses at Coach and Bank of America, the numbers were fairly strong.  The banks continue to report better credit trends, but a cautious tone has many analysts scratching their heads over the true strength of the bank balance sheets.  I agree with Felix Zulauf who thinks the banks are dead money from here.

The Redbook and ICSC data were both robust again and showing signs that the consumer is willing to spend despite continued de-leveraging.  ICSC reported a 2.6% climb in year over year sales while Redbook reported a 0.9% climb.

In other news, PPI came in fairly benign at 0.2% and housing starts disappointed to the downside.  Neither were major market moving news as the headlines have been dominated by the Republican victory and the concerns in China.

 


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Big Blah (CPI)

Big Blah (CPI)

Courtesy of Karl Denninger at The Market Ticker

Oil can and graph with American dollar

From the Bullcrap Lie Society (BLS) of our government this morning:

On a seasonally adjusted basis, the Consumer Price Index for All Urban Consumers (CPI-U) rose 0.4 percent in November, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months the index increased 1.8 percent before seasonal adjustment, the first positive 12-month change since February 2009.

Most of the change was due to energy; gasoline was up sharply (as we saw yesterday in the PPI.)

Core was a literal zero.

Food was up a bit, but I continued to be puzzled by the difference between gasoline and "fuel oil."

Why?  Because "fuel oil" (that is, heating oil) is exactly the same thing as #2 diesel – that is, road diesel fuel.  The only difference is the tax (and the presence of dye in the heating oil to denote that the tax has not been paid.)  But for the legal (tax) issues you can run "heating oil" in your diesel car or truck, and vice-versa – they are identical products.

Used vehicles were also up materially – a reflection of the distortion from "cash for clunkers" still present in the data (it hit its maximum in October at +3.4%)  Prices for new vehicles were also up (again, the maximum was in October) – again denoting the "back-door" bailout of the automakers from cash-for-clunkers.  Unlike the new vehicle deal however, which you got a tax credit for, the buyer of a used car just got plain old-fashioned screwed through price-jacking caused by constraints in supply.  (Just wait though – in the new year when people can’t make the payments on those CFC deals, you’ll see what happens to used car prices…. supply and demand you know.. )

Medical care was up as usual (gee, how come it keeps rising faster than overall inflation?) and shelter costs were down (remember, this is not "housing", as that would expose reality – it is "owners equivalent rent")

All in all a blah report – but given the PPI that’s expected – the fun and games in the CPI report resulting from yesterday’s PPI should show up in a month or two.

 


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Toppy Tuesday Morning

Can we break higher on this low volume?

We've been waiting for traders to come back from their summer breaks but no sign of them so far.  Sill the market volume is at historic lows and still 80% of that volume is concentrated on a dozen financial stocks that simply get traded back and forth by robots every time the market needs a push in one direction or another

As David Fry's chart indicates, the only big volume stick we've seen in the past two months have come attached to big sell-offs.  In mid-August we were "just about to break higher" but gapped down instead and then again at the end of August, we reversed our low volume "recovery" with a big sell-off.  Here we are in the middle of September (that every two week thing) and THIS TIME, the analysts say it's different.  Different I guess because the volume has dropped by another 1/3 since our last fake rally. 

This, of course, does not stop us from "going with the flow" as running with the bulls can be very profitable but we are hedging A LOT and very cautious in our trade set-ups as we know how fast this can all turn around.  We took our short profits at yesterday's morning dip and added a mix of long and short plays during the day.  We did put our foot down on SRS and the Russell, playing the SRS to go no lower than $10.25 and the Russell not to break $600 this week and we'll be sweating out that one this morning as the pre-market pump has already jammed the futures up 40 points since Europe's open. 

Asia was mostly flat this morning but that does little to describe the madness at the Hang Seng, which was closed for the morning due to a Typhoon and opened for just 90 minutes in the afternoon where they dropped like a rock that was tied to a rock that was wearing cement shoes into the close.  Still, thanks to a 200-point gap up into the delayed open, the Hang Seng managed to finish the day down just 68 official points.   As soon as the US markets closed, dollar repair crews were rushed to the scene and they managed to get it back over 91 Yen in time for Japan's open and that helped the
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Monday Markets – Mr. Obama Goes to Wall Street

Today should be very interesting!

One year to the day after Lehman Brothers collapsed and precipitated a financial crisis that reverberated across the globe, President Obama will deliver a major speech on the financial crisis at Federal Hall in New York City at midday on Monday.  According to the White House: "He will discuss the aggressive steps the Administration has taken to bring the economy back from the brink, the commitment to winding down the government's role in the financial sector and the actions the United States and the global community must take to prevent a crisis like this from ever happening again."

As I had mentioned in our Year One Review of the Stock Market Crash, Obama and Wall Street did not get off to a great start but, even after the March crash, we are still up 20% since he was sworn in in January as the President has been EXTREMELY accommodative to Wall Street's needs (ie. free money) so far.  That has been the carrot - perhaps now it is time for the stick…

The Treasury just released a document entitled: "The Next Phase of Government Financial Stabilization and Rehabilitation Policies" which, at 51 pages, is a pretty neat review of the crash as well but I still prefer mine as it saves you an hour and has much better pictures.  There are many charts in the government's documents and they are not all that encouraging.  As the report concludes: 

We must address the structural weaknesses in our financial system that this crisis revealed. The Administration is working to gain approval of a detailed set of proposals to reform our regulatory system to address these weaknesses and keep our financial markets and economy on track to a sustainable recovery.

In addition to Obama speaking at noon, we have 3 Fed Governors making speeches today.  Duke speaks on Regulatory Reform at 8:30, Lacker talks about Financial Regulation at 12:30 (right after Obama) and Yellen gives an Economic Outlook at 3:50, just in time for a stick-save into the bell so we could have a wild ride this morning! 

Speaking of the Fed, I just read a great book called "The Creature from Jekyll Island," which our man Ron Paul calls: "What every American needs to know
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Testy Tuesday Morning – The Spin Is In!

We did get our stick save yesterday – only it came at 7:45 pm!

That's right, on pretty much no news at all and without any global markets open, the US futures all took off in synch at 7:45 last night and went up and up and up into Asia's open.  There was no particular news and Jim Cramer had just finished telling his viewers that the markets may be overbought.  Cramer also is now targeting a "3-5% decline," which is amazingly the exact decline I predicted last week and he also swiped my BBT pick as his "find of the day."  So good morning Jim, nice to have you back!  We don't mind Cramer stealing our buy picks because we have a full day advantage over his flock so welcome aboard suckers – er, fellow Cramer fans

Anyway, so the after-hours markets were flat but the ubiquitous futures market took off as soon as all the retail traders had their trading accounts turned off for the night and you would have thought something huge was happening to watch the relentless, non-stop, 3-hour climb in the Dow, the Nasdaq, the S&P and even the Russell futures that led into the Asian open.  Did this blatant manipulation of the indexes fool Asian investors?  Of course it did!  The Nikkei opened at 8pm EST and had gapped down to 10,200, exactly 4% off the high of 10,620 on Friday.  As I said to members in yesterday's chat, that 4% line is critical in the follow-through day on the 5% rule as it represents our expected bounce off 5%, so holding that line is still bullish.

Well, never let it be said that Mr. Stick doesn't know how to paint a bullish picture and the Nikkei was rescued from failing that 4% line by the relentless futures buying between 8pm and 10:30, which coincided with 9pm to 11:30 on the Nikkei, which just so happens to be when they close for lunch.  What happened at 11:30 Tokyo time?  Well, suddenly everyone lost interest in the US futures and they fell ALL THE WAY BACK to where they started in just 60 minutes.  Please Congress, whatever you do, don't look into this nonsense – better to just sit there in your little offices and say "the market forces are too complicated for me to understand" and
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Will We Hold It Wednesday? Industrial Production Edition

Whee, this is great!

Any excuse to take the markets higher and INTC was a good one last night.  We're thrilled because my 2:43 Trade Idea for members was "INTC Jan $17.50s for $1.28, speculative naked call with earnings tonight."  We don't do those very often but we looked primed for a pop and not much was expected from Intel, who were still expected to earn just 8 cents this quarter by the 44 analysts who are paid to follow them, despite the fact that they earned .11 last quarter (an 8-cent upside surprise) and had earned .28 last year in Q2.   That made the long call an excellent play since we were also willing to stick with them and add to the position if INTC had missed.   As it is, that should give us a nice 50%+ pop this morning! 

Other trades ideas from yesterday's Member chat were a GS put spread, AIG puts (and we can't wait for "earnings" on them!), DIA puts and calls as momentum plays, a YUM ratio backspread for the $5,000 Virtual Portfolio and a JPM bear put spread.  So we weren't overly enthusiastic in the run-up, mainly because we loaded up the truck in last week's dip with 18 bullish plays that I reviewed in the weekend wrap-up.  So we are looking for short plays to defend ourselves until we are sure what we have here is more than the proverbial "dead cat bounce" off our 33% retrace (which I discussed in Monday's post).  As I mentioned in yesterday's post, our upper targets to break the dreaded head and shoulders pattern are:  Dow 8,500, S&P 930, Nasdaq 1,825, NYSE 6,000 and Russell 510.  We're making good progress but nothing would be worse than failing this breakout and confirming the downward pattern so it will still be a tough week to get through, especially with todays manufacturing data, which we are concerned about.

David Fry INTC ChartI think David Fry summed it up for the skeptic's camp yesterday saying:

The AP headline today read: “Goldman Sachs’ $2.7B profit shows the firm’s prowess.” Good Grief! You have to hand it to Da Boyz, they know how to bedazzle Main Street. Anyone with a HAL 9000, their bad debts taken off their books, billions in public money to trade and most of their competitors (Bear Stearns and Lehman Bros.) eliminated


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Turning Up Tuesday – Can We Hold It?

I WAS really excited about yesterday's rally.

Meredith Whitney gave us the catalyst for the bear squeeze we expected But THEN I saw Cramer last night.  Nothing scares me more than watching Cramer's bandwagon do a 180 degree turn and head my way as he's been wrong and wrong and wrong and then wrong for months now.  Still, I'm going to try to ignore that noise and keep a level head, dealing with facts rather than fads to figure out which way thing will be going.  We were happily buying last week while Cramer was herding his sheeple out of the market and we'll be enjoying the free ride as he stampedes the masses back in, especially during expiration week but we'd rather see some honest, uptrending consolidation based on earnings than going back to early May's roller coaster model that hurt so many investors on both sides

We are, of course, thrilled with the move so far, as you can see from the new buy list that I put up over the weekend.  We cashed in our FXPs right at the top and went long on the DIA $83 calls at .40 as our 2nd trade of the day (the first was a long on GOOG into earnings).  Those calls finished at $1 (up 150% and we are done, of course) and we also went long on GLD while it was still low in our 10:31 Alert and I put up a hedged play on TNK but that was it.  We did all our buying last week, when things were cheap and we just spent the rest of the day waiting to see if we would make our target levels. 

As I said in yesterday's morning post, we were looking for 1,750 to hold on the Nasdaq as our primary indicator that we were going to hold our 33% pullback levels on the broader index so it's not really rocket science to see where that DIA trade came from as we timed it for right when the Nasdaq crossed back over the line after the morning dip.  Having a trading premise is always helpful and, in the 9:32 level watch to Members I had said: "Without $60 oil the best we can really hope for today is to claw back to our middle set of figures.  Earnings can take us up over the higher numbers
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Zero Hedge

Are The Underlying Mechanics Of The Largest Gold ETF A Cause For Concern

Courtesy of ZeroHedge View original post here.

Submitted by Jan Nieuwenhuijs from Voima Insights,

Are the underlying mechanics of the largest gold ETF a cause for concern?

Exchange-Traded Funds (ETFs) are an important element in the global gold market. The largest gold ETF is the “SPDR Gold Trust,” which is traded on the New York Stock Exchange Arca (NYSE Arca) under th...



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The Technical Traders

The Wuhan Wipeout - Could It Happen?

Courtesy of Technical Traders

News is traveling fast about the Corona Virus that originated in Wuhan, China. Two new confirmed cases in the US, one in Europe and hundreds in China. As we learn more about thispotential pandemic outbreak, we are learning that China did very little to contain this problem from the start. Now, quarantining two cities and trying to control the potential
outbreak, may become a futile effort.

In most of Asia, the Chinese New Year is already in full swing.  Hong Kong, China, Singapore, Malaysia, India and a host of other countries are already starting to celebrate the 7 to 10 day long New Year.  Millions of people have already traveled hundreds of thousands of miles to visit family...



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Phil's Favorites

Wuhan coronavirus: we still haven't learned the lessons from SARS

 

Embed from Getty Images

 

Wuhan coronavirus: we still haven't learned the lessons from SARS

Courtesy of Diana Bell, University of East Anglia

The SARS outbreak in 2002-2003 was the first global pandemic of the 21st century. There were 8,422 reported cases and 11% of those infected with the virus died. Its cause was a newly identified coronavirus (a type of virus that causes respiratory infections): SARS Co-V. Early cases were linked to wildlife markets and...



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Kimble Charting Solutions

Bad News For Crude Oil Should Come From This Pattern, Says Joe Friday

Courtesy of Chris Kimble

It’s a good idea for investors to be aware of key indicators and inter-market relationships.

Perhaps it’s watching the US Dollar as an indicator for precious metals or emerging markets. Or watching interest rates for the economy. Experience, history, and relationships matter. And it’s good to simply add these to our tool-kit.

Today, we look at another relationship that has signaled numerous stock market tops and bottoms over the years, and especially the past several months, Crude Oil.

When crude oil tops or bottoms, it seems that ...



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Insider Scoop

5 Software-Application Stocks Moving In Thursday's After-Market Session

Courtesy of Benzinga

Gainers

Atlassian Corporation, Inc. (NASDAQ:TEAM) stock surged 9.7% to $145.50 during Thursday's after-market session. According to the most recent rating by Morgan Stanley, on January 13, the current rating is at Overweight.

Diebold Nixdorf, Inc. (NYSE:DBD) shares increased by 8.1% to $11.48. The most recent rating by DA Davidson, on December 13, is at Buy, with a price target of $17.00.

Telaria, Inc. (NYSE:TLRA) stock rose 4...



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Biotech

Snakes could be the original source of the new coronavirus outbreak in China

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

 

Snakes could be the original source of the new coronavirus outbreak in China

Chinese cobra (Naja atra) with hood spread. Briston/Wikimedia, CC BY-SA

Haitao Guo, University of Pittsburgh; Guangxiang “George” Luo, Univers...



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Chart School

RTT browsing latest..

Courtesy of Read the Ticker

Please review a collection of WWW browsing results. The information here is delayed by a few months, members get the most recent content.



Date Found: Monday, 16 September 2019, 05:22:48 PM

Click for popup. Clear your browser cache if image is not showing.


Comment: This chart says SP500 should go back to 2016 levels (overshoot will occur of course)



Date Found: Tuesday, 17 September 2019, 01:53:30 AM

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Comment: This would be HUGE...got gold!


...

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Members' Corner

The War on All Fact People

 

David Brin shares an excerpt from his new book on the relentless war against democracy and how we can fight back. You can also read the first, second and final chapters of Polemical Judo at David's blog Contrary Brin.

The War on All Fact People 

Excerpted from David Brin's new book, the beginning of chapter 5, Polemical Judo: Memes...



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Lee's Free Thinking

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

 

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

Courtesy of  

The repo market problem isn’t the problem. It’s a sideshow, a diversion, and a joke. It’s a symptom of the problem.

Today, I got a note from Liquidity Trader subscriber David, a professional investor, and it got me to thinking. Here’s what David wrote:

Lee,

The ‘experts’ I hear from keep saying that once 300B more in reserves have ...



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Digital Currencies

Cryptos Have Surged Since Soleimani Death, Bitcoin Tops $8,000

Courtesy of ZeroHedge View original post here.

Bitcoin is up over 15% since the assassination of Iran General Soleimani...

Source: Bloomberg

...topping $8,000 for the first time since before Thanksgiving...

Source: Bloomberg

Testing its key 100-day moving-average for the first time since October...

...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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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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