Posts Tagged ‘RTP’

Tuesday – Uncle Rupert Throws A Tantrum

Happy Tuesday to you!

Nice market take-down by the Journal this morning, who led off with an article questioning the EU stress tests saying: "From this point of view, it is not surprising that the doubts raised about the validity of the stress tests are weighing on the Euro and also on other risk-correlated currencies."  Then, to make sure no one misses the article, they run another headline for the US markets that says "Concerns Over EU Banks Hit Euro" in which they quote themselves:

New concerns about the ability of European banks to weather the financial crisis came after the WSJ story highlighted once again the weaknesses of the stress tests. The report helped to widen the bond spreads on peripheral debtors and knocked European stock markets lower as another wave of euro zone jitters hit the market.

If this seems like BS manipulation to you, you will be doubly insulted to know that the US isn’t even the target of the manipulation.  Mr. Murdoch, an Aussie and long-time foe of the Euro, is simply expressing his displeasure in a Labor Party victory in the Australian elections this weekend (real Democracy’s hold elections on weekends to encourage voting) and is knocking down their dollar by simultaneously boosting both the dollar and the Yen (also in the article is news that the BOJ will not intervene in the Yen, which is total BS) to push down his native currency and make a post-election statement.  Just a media giant throwing a temper tantrum this morning. 

[EUSTRESS]Think about the "nature" of this story.  There is nothing NEW in this NEWs, is there? It’s the kind of article that could be written any time someone wants to push the markets.  Even the data they are using is from back on 3/31 – they didn’t even bother to update their facts for Q2!  Notice that the article is pure worst-case speculation by the WSJ, followed by comments like:

  • An FSA spokeswoman declined to comment.
  • CEBS didn’t disclose that the banks were calculating the figures in that way.

Wow, pretty damning evidence that they couldn’t get a comment contrary to their BS on a holiday weekend, right?  This news is also conveniently drowning out Obama’s proposed 6-year Public Works Program to combat unemployment by committing $50Bn for needed reparis on roads, rails and airport runways – putting some of our nation’s unemployed construction workers back to…
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Monday Market Movement – All in on Bonds!

Bond funds are attracting cash like stocks during the dot-com boom.

That's the headline this morning on Bloomberg, who says: "The amount of money flowing into bond funds is poised to exceed the cash that went into stock funds during the Internet bubble, stoking concern fixed-income markets are headed for a fall.  Investors poured $480.2 billion into mutual funds that focus on debt in the two years ending June, compared with the $496.9 billion received by equity funds from 1999 to 2000, according to data compiled by Bloomberg and the Washington-based Investment Company Institute."  $480Bn?!?  Whuck!?!

First of all, who the hell has $480Bn to do anything with in this economy?  That's where I stop reading and start pondering.  Of course, not all this cash is from America but holy cow – that is A LOT of money in these troubled times.  Imagine if some of that money starts going into equities.  Well, don't imagine that if you are bearish because you won't be able to sleep at night!  The cash inflows have pushed investment-grade US Corporate Debt down to a record 3.79% while Treasury Yields fell to an all-time low of 0.5%.

The money flowing into bonds is “probably not repeatable on a consistent basis,” said Joel Levington, managing director of corporate credit in New York at Brookfield Investment Management Inc., which oversees $24 billion. “Eventually it won’t be sustainable. Whether that means five years from now or five weeks is a little difficult to tell,” he said.  Let's be very clear about that last part – in order for any bubble to sustain itself it must continue to be fueled.  $480Bn is A LOT of money being put into instruments that provide little return.  I just did some charts and data on historical inflation in this weekend's "Defending Your Virtual Portfolio With Dividends" post for Members as we already see the writing on the walls with the Bond market and need to move into things that will actually make money (and protect our basis – which bonds do not at these levels). 

Investors took $9.1 billion OUT of equity funds in the week to Aug. 19, the most since July, according to Oleg Melentyev, a credit strategist at Bank of America Merrill Lynch Global Research in New York. Stock funds have had $215.4 billion of outflows
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Thursday Thoughts – GDP Up, Jobs Down

Forget the GDP.

We'll get the report on Q2 GDP at 8:30 tomorrow but I'll be watching the Employment Cost Index to see if we are recovering.  I know it seems like "commie talk" to my Conservative friends, but rising wages and benefits are signs of a healthy economy and you can plot the rise and fall of the stock market very neatly against how well the workers are treated

It was Henry Ford who first "discovered" that, if you expect American consumers to buy your products, you have to pay American workers enough to afford them.  In January of 1914, the Ford Motor Company announced they would pay $5 a day to its workers. The pay increase would also be accompanied by a shorter workday (from nine to eight hours). While this rate didn't automatically apply to every worker, it more than doubled the average autoworker's wage.  Workers came from all over the nation and all over the world to work for Ford, who had their pick of the best and the brightest, which led to a 60-year legacy of dominance in American Industry. 

Henry Ford had reasoned that since it was possible to build inexpensive cars in volume, more of them could be sold if employees could afford to buy them. The $5 day helped better the lot of all American workers and contributed to the emergence of the American middle class and that led to a massive economic boom in "the Roaring 20's" until greedy Banksters and speculators crashed the market in 1929.  

Unfortunately, earning $5 a day is still a dream for much of the workforce employed by US corporations as that is more money than is paid to their tens of millions of employees and suppliers in China, India, Vietnam, South Korea, Taiwan, Indonesia, etc.  Not only have American corporations "unlearned" the lessons that made this country great but they are actively involved in tearing down what is left of the American Middle Class by undermining their ability to earn and save as they ship jobs out of the country and cut wages and benefits for those few workers (135M at last count) who are left.

8:30 Update:  Make that 134,543,000 workers left - as we lost another 457,000 American jobs last week.  Continuing Claims picked back up to 4.56M, also more than expected but, as I said…
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Bears bombard Massey Energy Corp. as FBI Investigates Mining Tragedy

Today’s tickers: MEE, CSTR, SMH & RTP

MEE – Massey Energy Corp. – News the coal producer is being looked at by the Federal Bureau of Investigation following the tragic explosion at one of the firm’s mines in West Virginia on April 5, 2010, fuelled bearish options trading activity today and pushed Massey’s shares down 5.9% to $38.90 as of 12:45 pm (ET). Earlier in the session Massey’s shares declined 9% to an intraday low of $37.43. Shares of the underlying stock are currently down 31% since April 5, 2010, when the stock touched a new 52-week high of $54.80 before falling on news of the mining accident. Investors piled into put options on Massey today, with trading traffic heaviest in out-of-the-money puts in the May contract. The May $35 strike attracted the most volume with more than 12,600 puts changing hands at that strike by 12:50 pm (ET). It looks like at least 6,700 puts were purchased there for an average premium of $0.97 apiece. Put-buyers make money if Massey’s shares fall another 12.5% from current price of $38.90 to breach the average breakeven point to the downside at $34.03 by May expiration. News of the FBI’s involvement, coupled with investors’ voracious appetite for puts on the stock today, boosted Massey’s overall reading of options implied volatility 22.5% to 64.53% as of 12:55 pm (ET).

CSTR – Coinstar, Inc. – Shares of the provider of diverse services, such as self-service coin counting and Redbox $1-a-day movie-rental dispensaries, are up more than 21.5% to $46.44 as of 12:10 pm (ET). Earlier in the session Coinstar’s shares surged 32% over Thursday’s closing value of $38.21 to attain a new 52-week and intraday high of $50.35. One options player reeled in hefty profits by selling a previously established long call position in the May contract. It looks like the investor initially purchased 600 in-the-money calls at the May $35 strike for an average premium of $2.83 apiece back on Monday April 26, 2010, when shares of the underlying stock were trading at a volume-weighted average price of $36.51. Today the trader sold the calls for $14.40 each, banking average net profits of $11.57 per contract. Perhaps expecting continued bullish movement in the price per Coinstar share, the investor established a fresh optimistic stance on the stock by purchasing 600 calls at the May $50 strike for an average premium of $2.20 apiece.…
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Thoughtful Thursday Morning

Maybe I am being too bearish on the economy.

Maybe there is a shining city on the hill with 1,000 points of light and if I simply close my eyes and believe in it, I will be transported there and everything will be wonderful and China will expand and Europe will expand and the US markets will rise and rise as the 18M unemployed people line up in the streets to cheer us as we all drive past them in our new cars as we head over to the gas station to pay $4 for gas, honking joyfully as we pass by each empty storefront and each abandoned home

It was good to take quick bearish profits, as I warned in yesterday's post because quick profits are all the bears get these days as it was indeed a "Whipsaw Wednesday," and Buffett's warning went in one ear and out the other of investors so quickly that clearly there was no gray matter slowing it down along the way!  I was very proud of our short plays on COF, HPQ, RTP, SRS, RTH and our DUG long but all had a half-life on their success so short you could have run an atomic clock with it.  Fortunately, we had our bounce levels to guide us and our 3 of 5 rule to get out of bearish positions so the damage was more to our pride than our virtual portfolios.

Although I could see the turn in my 9:45 Alert to Members, I didn't have the heart to make any bullish calls as it just seemed like such nonsense.  By 10:12 we were even more concerned that something was up and I said: "Don’t get too excited bears.  As I said in the post, profits need to come quickly off the table – this is not a market for riding 20% profits too far."  Sadly, I then proceeded to make a short play on OIH at 10:26 that stopped out at 10:34 and an incredibly poorly timed idea to get the DIA $93 puts at 11:22, just minutes before the market went flying and stopped that one out too as we flew through our bounce zone of Dow 9,200, S&P 986, Nas 1,946, NYSE 6,400 and RUT 555.   Now that they've held up so well, those levels now become our watch levels to the downside and it makes…
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Whipsaw Wednesday – Buffet Bashes Bulls

Well, you can't say I didn't tell you so

Yesterday's post was all about what total nonsense the move up was and, per usual, the whole thing was taken away in the futures, where retail investors have no chance to profit from it.  Of course, this market isn't being run for your benefit and if you wait for Cramer to tell you what to do, then you are pretty screwed (and more so if you listen to him).  Yesterday our boy Jim fell off the wagon and declared victory for the Bulls saying: "The bears must be stunned and confused, flummoxed even" and made fun of those of us who worry about "facts" and "fundamentals" as we trade.  "Every argument the bears had for selling," Cramer said, "has been totally rebuffed by this great market."  Cramer, you are not just an idiot, you are a dangerous idiot!

As the more rational David Fry points out in his "Spin City" post: 

So we got a healthy bounce today but it didn’t undo Friday and Monday’s collective damage. We were a little short-term oversold and a bounce shouldn’t surprise even though economic and company news wasn’t great. But, the “better than expected” spin was in for retailers which frankly was laughable. And, golly, banks reported losses on credit cards were slowing (maybe because Chucky’s not shopping?) which was seen as a positive. Homebuilders disappointed (oops, scratch that)… a “worse than expected” report was spun positively because more single family homes were built. I wonder about that since there are too many of them, aren’t there? But that’s the way things are these days.

What a stark contrast between a sane and insane take on yesterday's action.  In Monday's post we targeted a drop to Dow 9,100, S&P 980, Nasdaq 1,950, NYSE 6,400 and Russell 550 and in my 9:48 Alert to Members yesterday I set the bounce targets at Dow 9,200, S&P 986, Nas 1,946, NYSE 6,400 and RUT 555 but noting they were rough numbers that I was eyeballing on the fly, following our 5% rule.  Those levels were beat across the board but on such low volume that I called an audible and we stayed bearish, taking aggressive short positions like the DIA Aug $93 puts at $1.50 which, unfortunately, didn't make our double down target
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Zero Hedge

BitTorrent Sells For $140 Million To Blockchain Startup Tron

Courtesy of ZeroHedge. View original post here.

Justin Sun, the founder of blockchain-focused startup Tron, has purchased BitTorrent, the owner of the file-sharing client MuTorrent, for $140 million, according to The Hacker News. Tron is a decentralized entertainment and content-sharing platform, and of course BitTorrent was a pioneer in the world of distributed file-sharing, and Sun said he hopes to use BitTorrent's recognizable brand in the course of building out his own company's content sharing system.

Tron is hoping to build a platform where users can publish content without ceding any control to a third-part...



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Phil's Favorites

Marks vs Machine

 

Marks vs Machine

Courtesy of 

The new Howard Marks memo hit last night. In it, the famed fixed income manager talks about the things that robotic investing cannot do that skilled humans can.

I’m not through the whole thing yet, but will have thoughts later.

Read it here in its entirety:

Investing Without People (Oaktree)

...

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Insider Scoop

More Trade Threats Spook Investors

Courtesy of Benzinga.

Related SPY The Market In 5 Minutes: Trade Tensions Intensify, ZTE Rebuked, Housing Starts And More Mark Cuban, Others...

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Chart School

Bitcoin Update - Testing support on cycle low

Courtesy of Read the Ticker.

Due to popular demand, bitcoin review.

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Sure fundamentals do matter, and so does market timing (entry, stops and exit), here at readtheticker.com we believe a combination of Gann Angles, Cycles and ...

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Digital Currencies

BIS Blasts Cryptos In Special Report: "Beyond The Hype"

Courtesy of Mike Shedlock, MishTalk

The BIS blasts cryptos over scaling issues, energy, and trust. The BIS is correct. Cryptos are fatally flawed as money.

A Bank of International Settlements (BIS) report examines cryptocurrencies in depth. The study, called "Looking Beyond the Hype" investigates whether cryptocurrencies could play any role as money.

Bloomberg, Reuters, and the Bitcoin Exchange guide all have articles on the report but not one of the bothered to link to it.

After a bit of digging, I found the crypto report is part of an upcoming BIS annual report. The BIS pre-released the crypto report today (as chapter 5).

Here's a l...



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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.

Join our webinar, free, it's open to all. 

Just click here at 1 pm est and join in!

[For more information on NewsWare, click here. For a list of prices: NewsWar...



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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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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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