Month: May 2014

This is a trader’s market.

The markets are showing us sharp moves up and down. And while “buy and hold” investors might find this a unpleasant, short-term trades can use moves like this for large gains.

Consider the last four months. Overall, the market has barely budged higher… but if you’d used this volatility to trade the market… you could have made a killing.

 

 

 

 

 

 

This situation is not unique to the US. Emerging markets are currently even MORE attractive for traders.

Take a look at China’s ETF… we’ve had sharp moves up and down that have allowed short-term trades to see some extraordinary gains!

 

 

 

 

 

 

 

Anyone who times these moves well with options trades could have literally DOUBLED their money.

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Phoenix Capital Research

 

The bells are ringing for the markets, but few are noticing.

The primary driver of all stock prices for the last 5 years has been Fed intervention. The Fed is now actively tapering its QE programs. But more importantly, Fed officials are beginning to leak that the Fed is changing course with its policies.

To understand this, you first need to note that Fed officials are public officials as well as economists. What we mean by this is that when a Fed official speaks in public, their message is carefully crafted. Fed officials hedge their views and find ways of hinting at changes without ever outright saying anything too extreme.

In this sense, it’s important to read “between the lines” when Fed officials speak. With that in mind, we need to note that the Fed is beginning to hint at a potential exit strategy to its policies.

First off, Janet Yellen hints at an interest rate hike during a press conference. Now Philadelphia Fed President Charles Plosser is criticizing the Fed’s “interventionist” actions.

Over the past five years, the Fed and, dare I say, many other central banks have become much more interventionist. I do not think this is a particularly healthy state of affairs for central banks or our economies. The crisis in the U.S. has long passed. With a growing economy and the Fed’s long-term asset purchases coming to an end, now is the time to contemplate restoring some semblance of normalcy to monetary policy.

       Source:  Philadelphia Fed.

The translation to this: the Philadelphia Fed is aware that the Fed is out of control and needs to back off.

Then we get Fed uber-dove Bill Dudley talking about “eventual interest rate increases.”

Federal Reserve Bank of New York President William Dudley said the pace of eventual interest rate increases “will probably be relatively slow,” depending on the economy’s progress and how financial markets react.

A “mild” response “might encourage a somewhat faster pace,” Dudley said today to the New York Association for Business Economics. “If bond yields were to move sharply higher,” on the other hand, “a more cautious approach might be warranted.”

Source: Businessweek.

This is Bill Dudley… the man who has claimed that QE is fantastic and that inflation is too low… now openly talking about when the Fed will begin hiking rates and how it will do so.

The writing is on the Wall. The Fed has reached Peak Intervention with its policies and is now shifting gears. This process will be gradual in nature, but the alleged “exit strategy” which the Fed has been avoiding for the last five years will begin looming on the horizon.

The question now is when the markets will take note of this.

If you’re an individual investor worried about the potential for another 2008-type collapse… we urge you to check out our paid investment newsletter Private Wealth Advisory.

Unlike 99% of investors, Private Wealth Advisory subscribers MADE money in 2008.

And we continued our incredible returns during the EU Crisis and US Debt Ceiling fiascoes of 2011 and 2012 respectively.

Indeed, during that period we locked in an incredible 74 consecutive winning trades and not one single loser.

We continue to rack up the gains today, with over 10 positions sharply in the black, including gains of 12%, 16%, 18%, 28% and even 33%.

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To subscribe now to a 90 day trial subscription to Private Wealth Advisory…

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Best Regards

Phoenix Capital Research

 

 

 

 

Time and again, we’ve been told that the Great Crisis of 2008 has ended and that we’re in a recovery.

Indeed, earlier this year, we were even told by Fed Chair Janet Yellen that the Fed may in fact raise interest rates as early as next year.

If this is in fact true, how does one explain the following statement made by the Fed’s favorite Wall Street Journal reporter, Jon Hilsenrath?

One worry: As they move toward a new system, trading in the fed funds market could dry up and make the fed funds rate unstable. That could unsettle $12 trillion worth of derivatives contracts called interest rate swaps that are linked to the fed funds rate, posing problems for people and institutions using these instruments to hedge or trade.

So… the Fed may not be able to raise interest rates because Wall Street has $12 trillion in derivatives that could be affected?

Weren’t derivatives the very items that caused the 2008 Crisis? And wasn’t the problem with derivatives that they were totally unregulated and out of control?

And yet, here we find, that in point of fact, all of us must continue to earn next to nothing on our savings because if the Fed were to raise rates, it might blow up Wall Street again…

Simply incredible and outrageous.

What’s even more astounding is that Hilsenrath is in fact understating the issue here. It’s true that there are $12 trillion worth of derivatives contracts related to the fed funds rate… but total interest rate derivatives contracts are in fact closer to $192 TRILLION.

And that’s just the derivatives sitting on US commercial bank balance sheets. We’re not even including international banks!

So…the US economy is allegedly in recovery… the financial markets are fixed… and all is well in the world. But the Fed cannot risk raising interest rates to normal levels because Wall Street has over $12 trillion (more like over $100 trillion) in derivatives contracts that could blow up.

That sure doesn’t sound like things were fixed to us. If anything, it sounds like the stage is set for another 2008 type disaster.

If you’re an individual investor worried about the potential for another 2008-type collapse… we urge you to check out our paid investment newsletter Private Wealth Advisory.

Unlike 99% of investors, Private Wealth Advisory subscribers MADE money in 2008.

And we continued our incredible returns during the EU Crisis and US Debt Ceiling fiascoes of 2011 and 2012 respectively.

Indeed, during that period we locked in an incredible 74 consecutive winning trades and not one single loser.

We continue to rack up the gains today, with over 10 positions sharply in the black, including gains of 12%, 16%, 18%, 28% and even 33%.

All for a low annual cost of $179.

To subscribe now to a 90 day trial subscription to Private Wealth Advisory…

CLICK HERE NOW!!!

Best Regards

Phoenix Capital Research

 

 

 

We have entered a very dangerous stock market.

On one side we have entered a period that historically is very weak for stocks. The old adage “sell in May, go away” is based on the fact that the period from May to November has historically been a very weak one for stocks.

According to the Ned Davis (NDR) database, had you invested $10,000 in the S&P 500 every May 1st starting in 1950 and sold October 31 of the same year, your initial position would only be worth $10,026 as of 2008. Put another way, by investing only from May through October, a $10,000 stake invested in 1950 would have only made $26 in 57 years.

In contrast, $10,000 invested in the S&P 500 on November 1st and sold April 30th over the same time period would have grown to $372,890. Out of 58 years, you would have had 45 positive and only 13 negative.

So the period from May to November has historically been a very weak one for stocks.

However, on the other side of the equation, the Federal Reserve has conditioned investors to believe that no matter what happens, the Fed or someone else will step in to hold the stock market up should things get hairy.

Time and again, whenever stocks came dangerously close to breaking down, “someone” would step in and prop the market up. You can see the moves clearly in the chart below.

 

 

 

 

 

 

 

Thus, traders have been conditioned to move aggressively into stocks the very moment that the market hits support. This makes for a very bullishly biased environment, a fact confirmed by the record amount of bullishness and margin debt in the system today.

And so we are in a very dangerous environment. One on hand, the market is overbought and due for a pullback. On the other hand, investors at large only believe stocks can move up.

At some point, the market will call this bluff. Given the sheer number of issues in the world today (Ukraine, China’s economic slowdown, the weakness of the US economy, Europe’s ongoing debt crisis, etc.) there is no shortage of potential black swans out there.

The question is, how to determine when it’s time to run for safety.

Be aware, there are warning signs flashing throughout the financial system…

With that in mind, We’ve already urged Private Wealth Advisory clients to start prepping. We’ve opened three targeted trades to profit from the stock bubble bursting. As we write this, all of them are roaring higher.

We’ve helped thousands of investors manage their risk and profit from market collapses. During the EU Crisis we locked in 72 straight winning trades and not one loser, including gains of 18%, 28% and more.

All for the the small price of $179: the annual cost of a Private Wealth Advisory subscription.

To take action to prepare for what’s coming… and start taking steps to insure that when this bubble bursts you don’t lose your shirt.

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Phoenix Capital Research

 

 

 

The signs of inflation continue to appear in the economy.

The Fed is ignoring this because the Fed is afraid of deflation… despite food prices, energy prices, healthcare costs, home prices and stocks soaring.

• FedEx is increasing prices by 42% for some shipments.
• Commonwealth Edison is raising electricity rates by 38% in June.
• Chipotle is raising prices for the first time in three years.
• Netflix is raising prices on new customers.
• Colgate-Palmolive is raising prices.

These are simply explicit price increases. Many companies have been raising prices via a “stealth” price hike by simply charging the same price for less of a product. The latest example of this is bacon, but companies such as Kellogg’s, Snickers, Tropicana, Bounty, Heinz, and others have been using this tactic for some time.

Against this backdrop, the Fed is openly stating that it wants to create inflation. Put another way, the Fed is not only oblivious to the fact inflation is already appearing in the broader economy, the Fed actually wants to create more inflation!

Small wonder the US Dollar is teasing with breaking multi-year support.

 

 

 

 

 

 

 

 

 

In its quest to fight the brief deflation of 2008-2009, the Fed has unleashed a wave of inflation. These developments take time to unfold. But the signs are already there. The grand theme for 2014 will see prices moving higher.

The problem with inflation is that it is a lot easier to create than contain. The Fed continues with its dubious claims that inflation is too low, but the markets and prices are saying otherwise.

Buckle up, much higher prices are coming. The Fed is behind the curve again, just as it was in 2007. We all know what happened next.

With that in mind, We’ve already urged Private Wealth Advisory clients to start prepping. We’ve opened SIX targeted trades all designed to profit from inflation as it surges in the financial system. As we write this, all SIX of them are soaring higher despite the stock market trading sideways.

We’ve helped thousands of investors manage their risk and profit from market collapses. During the EU Crisis we locked in 72 straight winning trades and not one loser, including gains of 18%, 28% and more.

All for the the small price of $179: the annual cost of a Private Wealth Advisory subscription.

To take action to prepare for what’s coming… and start taking steps to insure that when inflation rips through the system you don’t lose your shirt.

Click Here Now!

Phoenix Capital Research

 

 

Janet Yellen has a BIG problem on her hands.

The Fed has been tapering its QE programs to the tune of $10 billion per month or so. The problem with this is that the Fed is once again behind the curve and the markets are already smelling inflation.

Indeed, the US Dollar just took out key support yesterday.

 

 

 

 

 

 

 

This is a HUGE problem for the Yellen Fed. They are already tapering QE but the markets continue to display inflationary tendencies. What is the Fed to do? Raise rates? It’s already said that won’t happen for another year. And tapering QE more aggressively could tank stocks.

Meanwhile, food prices are roaring higher. Wholesale beef prices are up 21% from this period last year. Pork prices are up 56%. Agricultural commodities in general have moved sharply since the beginning of the year.

 

 

 

 

 

 

 

The problem with inflation is that it is a lot easier to create than contain. The Fed continues with its dubious claims that inflation is too low, but the markets and prices are saying otherwise.

Buckle up, much higher prices are coming. The Fed is behind the curve again, just as it was in 2007. We all know what happened next.

Be aware, there are warning signs flashing throughout the financial system…

With that in mind, We’ve already urged Private Wealth Advisory clients to start prepping. We’ve opened three targeted trades to profit from the stock bubble bursting. As we write this, all of them are roaring higher.

We’ve helped thousands of investors manage their risk and profit from market collapses. During the EU Crisis we locked in 72 straight winning trades and not one loser, including gains of 18%, 28% and more.

All for the the small price of $179: the annual cost of a Private Wealth Advisory subscription.

To take action to prepare for what’s coming… and start taking steps to insure that when inflation rips through the system you don’t lose your shirt.

Click Here Now!

Phoenix Capital Research

 

 

About that jobs report.

Upon closer inspection, the report was a total disaster. You wouldn’t know this from the financial media’s coverage, but it was.

The establishment survey shows a gain of 288,000 jobs last month. However, the household survey shows that that the economy lost 73,000 jobs in April.

This is critical. The household survey does not allow for “duplication of individuals,” meaning that if someone holds more than one job, they’re only counted once. In contrast, if someone is working multiple low paying jobs, every single job will be counted in the establishment survey.

Put it this way. If you go from one solid full time job to working as a waiter, cab driver, and tossing pizzas, the establishment survey will show that the economy created TWO jobs (one job lost plus three started= two jobs net) whereas the household survey will show NO growth (one person lost a job and started working elsewhere).

With this in mind, you should be paying attention to the household survey. The household survey shows 73,000 jobs were LOST. This negates the claim that 288,000 were created.

Aside from this oddity, we find that 806,000 people left the labor force. Moreover, reentrants (folks returning to the labor force after being unemployed) fell 417,000. And new entrants (folks entering the labor force for the first time) fell 126,000.

So the number of people in the labor force fell as did the number of people returning to the labor force and the number of folks entering the labor force for the first time.

And yet somehow the jobs picture is supposedly rosy?

In all honesty, this report was totally abysmal. Anyone who spent 2-3 minutes digesting it knows this. But this doesn’t stop the media from trumpeting the drop in the unemployment rate (due to nearly 1 million people leaving the labor force), nor does it counter the claims that 288K jobs were created.

The economy is showing serious warning signs. The fact that stocks are holding up based on misguided hope and delusion makes for a very dangerous environment similar to that of late 2007.

Be aware, there are warning signs flashing throughout the financial system…

With that in mind, We’ve already urged Private Wealth Advisory clients to start prepping. We’ve opened three targeted trades to profit from the stock bubble bursting. As we write this, all of them are roaring higher.

We’ve helped thousands of investors manage their risk and profit from market collapses. During the EU Crisis we locked in 72 straight winning trades and not one loser, including gains of 18%, 28% and more.

All for the the small price of $179: the annual cost of a Private Wealth Advisory subscription.

To take action to prepare for what’s coming… and start taking steps to insure that when this bubble bursts you don’t lose your shirt.

Click Here Now!

Phoenix Capital Research

 

 

The financial media are gaga over the alleged great jobs numbers from last week.

We’ve been over this saga many times. The methodology for calculating jobs gains is not even close to accurate. The unemployment rate is now a marketing gimmick rather than an accurate economic metric.

Indeed, here are some staggering statistics that indicate just how messed up the US economy is right now.

• The labor participation rate is the lowest since 1978.
• There are over 90 million Americans without a job right now.
• An incredible 20% of all American families do not have a single member who is employed.
• There are over 47 million Americans on food stamps.

There is simply no way to spin these numbers. The US Federal Reserve has spent over $3.2 trillion and generated virtually no real job growth (accounting for population growth).

See for yourself:

When you account for how the potential labor pool has grown, the number of employed Americans has gone almost nowhere but down since the 2008 recession “ended.”

At the end of the day, spending money doesn’t create real job growth. An employer only hires someone if they believe that the person’s output will have a net benefit for the firm (meaning the money the person’s output brings in is larger than the money the firm pays them for their work).

That’s what creates a sustainable job. Spending money just to create some position where a person sits at work 50% of the time doing nothing is of no real long-term value to the economy, the person, or the firm.

In simple terms, the great attempt to prop up the US economy through spending and printing money is at an end. The world takes a long time to catch on to these changes, but the shift has already begun. It’s now just a matter of time before stocks figure it out

Be aware, there are warning signs flashing throughout the financial system…

With that in mind, We’ve already urged Private Wealth Advisory clients to start prepping. We’ve opened three targeted trades to profit from the stock bubble bursting. As we write this, all of them are roaring higher.

We’ve helped thousands of investors manage their risk and profit from market collapses. During the EU Crisis we locked in 72 straight winning trades and not one loser, including gains of 18%, 28% and more.

All for the the small price of $179: the annual cost of a Private Wealth Advisory subscription.

To take action to prepare for what’s coming… and start taking steps to insure that when this bubble bursts you don’t lose your shirt.

Click Here Now!

Phoenix Capital Research

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The Central Bank intervention fiasco continues to unravel before our eyes.

Globally all Central Banks have kept an eye on the Bank of Japan, which announced the single largest QE program relative to its GDP in history. That one single QE program announced in April 2013 is equal to over 20% of Japan’s GDP.

Japan experienced two brief quarters of improved economic activity, before things turned south again. Turns out that printing trillions of dollars to buy bonds doesn’t create growth.

The latest example is Sony, the Japanese electronics giant which just announced a 70% COLLAPSE in its profit outlook. Sony’s CEO had stated previously that a weak Yen, caused by the Bank of Japan’s QE program was actually a “disadvantage.”

We now have concrete proof as Sony’s profits outlook evaporates.

This is the death knell of QE. We now know for a fact that the Fed and other Central Banks are aware that QE doesn’t create jobs nor does it improve the broader economy.

All that leaves is stocks… which have benefitted enormously from QE, with the S&P 500 rising to new record highs boosted by the Fed’s money printing.

However, ultimately stocks react to profits. And as Sony has proven, QE hurts rather than helps profits. Indeed, Sony’s stock is down over 1.5% on the earnings outlook drop. And it’s essentially breakeven since the Bank of Japan announced its massive QE program.

 

 

 

 

 

 

The writing is on the wall. QE is good for very little these days. If the Bank of Japan can spend over $1.4 TRILLION and corporate profits fall while stocks go nowhere, it’s the end of the line for Central Bank money printing.

Be aware, there are warning signs flashing throughout the financial system…

With that in mind, We’ve already urged Private Wealth Advisory clients to start prepping. We’ve opened three targeted trades to profit from the stock bubble bursting. As we write this, all of them are roaring higher.

We’ve helped thousands of investors manage their risk and profit from market collapses. During the EU Crisis we locked in 72 straight winning trades and not one loser, including gains of 18%, 28% and more.

All for the the small price of $179: the annual cost of a Private Wealth Advisory subscription.

To take action to prepare for what’s coming… and start taking steps to insure that when this bubble bursts you don’t lose your shirt.

Click Here Now!

Phoenix Capital Research