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Should You Place Call Or Put Options On The S&P 500 Index?
The S&P 500 Index (SPY) has suffered agonizing declines in 2016. As you can see from the above graphic, it plunged from approximately 2,080 to its current level of 1,882.95, with no clear direction or consolidation taking place. In markets such as this one, one has to wonder what factors are at work here? Broadly speaking, these are the elements at play: Ongoing volatility in crude oil and commodities markets in general is having a devastating effect on major averages across the board. The Dow Jones Industrial Average (DIA), the Nasdaq 100 (QQQ) and the S&P 500 index are all moving in sync with the price of crude oil. A week ago ... -
Finance 0
That Didn’t Take Long
It wasn’t in any way magnanimous for the FOMC to state clearly what everyone already knew without any need for aid of GDP calculations. The policy statement for its January 2016 meeting included language that mitigated, if not fully than significantly, the continued reliance on labor indications alone. The Fed says the labor market continues to point in the right direction, even if the economy in all the wrong places slowed just as it judged recovery conditions met. Information received since the Federal Open Market Committee met in December suggests that labor market conditions improved further even as economic growth slowed late last year... -
Finance 0
Week In Review: China Pharma Financing Deals
Deals and Financings CARsgen Therapeutics, a Shanghai company developing CAR-T immunotherapies for solid tumors, completed a $30 million Series B round (see story). CARsgen is currently conducting Phase I trials of two CAR-T immunotherapies: one for brain cancer and the other for liver cancer. The company’s latest round was led by KTB Ventures, a Korean venture fund, and Jolly Innovation Ventures, which is backed by China’s Jolly Pharma. Kaitai Capital and JIC Genesis Fountain Healthcare Ventures participated. Adagene, a Suzhou company developing mono-specific and bi-specific antibodies, announced a $28 million Series B financi... -
Finance 0
Saudi Arabia Hemorrhages $19.4 Billion In Reserves During December
Saudi Arabia – which was busy playing headline hockey with Russia over a rumored 5% production cut proposal – is running out of money. Yes, we know, that sounds absurd. But believe it or not, the country whose monarch recently rented the entire Four Seasons hotel for a 48 hour stay in Washington DC, is in fact going broke. And at a fairly rapid clip. The problem: slumping crude. As we first discussed in November of 2014, Riyadh’s move to kill the fabled petrodollar in an effort to bankrupt the US shale complex was a risky proposition. If ZIRP kept US producers in the game longer than the Saudis anticipated, crashing crude could ... -
Finance 0
It’s Time For Twitter To Make A Deal… And Fast
It’s time for Twitter Inc. (TWTR) to stick or twist. Last Sunday, the embattled social media company suffered a mass exodus of executive talent. If you believe the official statement, Alex Roetter, Kevin Weil, Skip Schipper, and Katie Stanton all “voluntarily” departed. Hmm… consider me suspicious. The timing couldn’t be more ominous. Why? Because Twitter is in dire need of a turnaround. User growth slumped to 8% in the third quarter of 2015, down from 22% a year earlier. Take a look at this for an ugly trend… The only logical reason for four executives to bail at the same time is if even worse user growth – possibly even ... -
Finance 0
Weighing The Week Ahead – February 2016: Is The Correction Over?
Stocks once again made a sharp turnaround late in Wednesday’s session. The “mystery” rebound took the S&P 500 (SPY) up 3.5% in about two days of trading. Despite the important economic releases and heavy earnings calendar next week, expect the punditry to be asking: Is the correction over? Prior Theme Recap In my last WTWA I predicted that everyone would be watching for a dovish tilt from the Fed. That was certainly the big story for the first part of the week, including several programs that used the “dovish tilt” phrase. Even after the Fed meeting, speculation about the “real meaning” of the FOMC statement remained newsw... -
Finance 0
Gold Forecast – February, 2016
Gold prices settled at $1117.83 an ounce on Friday, making a gain of 1.8% on the week and 5.2% over the month. The precious metal’s gains were mainly driven by the risk-off sentiment in the markets. Investors channeled some money into the safe-haven metal in order to diversify their assets amid resurgent financial market volatility emanating from China and heightened geopolitical tensions. The metal also got a boost last week after the Federal Reserve said it was looking at international conditions and their impact on the U.S. economy. The Federal Open Market Committee (FOMC) kept an optimistic view on the economy but stated that “... -
Finance 0
The Federal Reserve’s ‘Uh Oh’ Moment Has Already Arrived
The Federal Reserve seems to have been caught off-guard by the recent turmoil on the markets. As the Chinese economic growth seems to be slowing down, all of the Western central banks need to re-think their plans, and the Federal Reserve will have to kneel in the dust. Whereas just a few weeks ago, the Fed ‘promised’ the markets it would increase the interest rates 4 times in just twelve months, the central bank is already reneging on its promise as it no longer thinks it will be able to do so without completely suffocating the economy. As we explained in a previous column, the use of some specific words when the original rate hike was a... -
Finance 0
Lacy Hunt – “Inflation And 10-Year Treasury Yield Headed Lower”
No one has called long-duration treasury yields better than Lacy Hunt at Hoisington Management. He says they are going lower. If the US is in or headed for recession then I believe he is correct. Gordon Long, founder of the Financial Repression website interviewed Lacy Hunt last week and Hunt stated “Inflation and 10-Year Treasury Yield Headed Lower”. Video length: 00:30:02 Fed Tactics “Debt only works if it generates an income to repay principle and interest.” Research indicates that when public and private debt rises above 250% of GDP it has very serious effects on economic growth. There is no bit of evidence that indic... -
Finance 0
NZD/USD: Targeting Further Downside Pressure On Price Failure
NZD/USD: The pair closed flat the past week leaving risk of a move lower on the cards. As long as the 0.6542/58 zone continues to hold as resistance, the pair looks to weaken. This is consistent with its medium term downtrend. Support lies at the 0.6400 level where a break will aim at the 0.6350 level. Further down, the 0.6300 level comes in as the next downside target. Conversely, resistance resides at the 0.6500 level where a break will aim at the 0.6550 level. A break here will have to occur to create scope for a run at the 0.6600 level. Further out, resistance stands at the 0.6650 level. All in all, NZD/USD faces downside threats below it...
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