VIX ETFs: Trading Like Hot Cakes

VIX ETFs: Trading Like Hot Cakes

Bets on stock-market volatility are gobbling up a record share of U.S. stock trading. A frenzy of trading in the five largest exchange-traded products that profit either when volatility spikes or declines accounted for 7.2% of total composite stock market volume Thursday, an unprecedented feat for these hot-potato products, according to WSJ Market Data Group. […]

Next Week

Next Week

Next Week

August 18, 2017

Central Banks: Iceland, Indonesia and Hungary have planned monetary policy reviews next week, and Draghi and Constancio of the European Central Bank speak publicly.

Holidays and Special Events: The Hindu holiday of Garesh Chaturthi begins Friday, and the annual Jackson Hole central banking symposium, hosted by the Kansas City Fed, runs from Thursday through Saturday.

Scheduled U.S. Economic Data Releases: New and existing home sales, the Richmond and Kansas City Fed manufacturing indices, the FHFA housing price index, durable goods orders and weekly jobless insurance claims, mortgage applications, consumer comfort, chain store sales and energy inventories.

Japanese Statistics: Consumer prices, all industry index, machine tool orders, index of leading economic indicators, preliminary manufacturing purchasing managers index and department store sales.

Selected Other Asian Indicators: Malaysian, Hong Kong and Singaporean consumer prices. Indian and Chinese indices of leading economic indicators. Thai GDP, Hong Kong trade and Singaporean industrial production. South Korea consumer sentiment and producer prices.

Euroland: Preliminary consumer confidence, ZEW index of investor sentiment, index of leading economic indicators, and flash PMI readings for August.

Members of the Euro Area: French and German preliminary PMI results. German GDP, consumer confidence, ZEW index of investor confidence, and import prices. French business sentiment and consumer confidence. Spanish PPI, GDP and trade balance. Irish and Finnish PPI. Dutch and Belgian consumer sentiment. Greek and Portuguese current accounts. Austrian industrial output and Finnish unemployment.

U.K. and Switzerland: British GDP, public sector borrowing, BBA-reported mortgage approvals, Rightmove house price index, and CBI surveys of industrial trends and distributive trades. Swiss trade surplus and industrial production.

Nordic Europe: Danish and Norwegian consumer confidence. Norwegian, Swedish and Icelandic unemployment. Norwegian GDP, Icelandic wages, Danish retail sales, and Swedish producer prices.

Eastern Europe: Czech consumer and business sentiment. Polish unemployment.

Australia, New Zealand, Turkey and South Africa: Australian and South African indices of leading economic indicators. New Zealand trade, South African CPI, and Turkish consumer confidence.

Canada, Mexico and Brazil: Mexican and Canadian retail sales. Mexican and Brazilian current accounts. Mexican GDP and unemployment. Brazilian consumer sentiment and Canadian wholesale turnover.

Copyright 2017, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

Tags: Economic Data Calendar




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Commodities Technical Analysis, August 21st — August 25th

Commodities Technical Analysis, August 21st — August 25th

The technical analysis, that includes the indicators’ data and major pivot points for WTI Oil, Gold, Silver and Copper as traded on spot market as of August 20th, 2017:

Crude Oil

Indicators

Moving Averages RSI Parabolic SAR CCI
Long Neutral Long Neutral

Crude Oil - Indicators as of Aug 20, 2017

Floor pivot points

3rd Sup 2nd Sup 1st Sup Pivot 1st Res 2nd Res 3rd Res
44.69 45.65 47.21 48.17 49.73 50.69 52.25

Crude Oil - Floor pivot points as of Aug 20, 2017

Woodie’s pivot points

2nd Sup 1st Sup Pivot 1st Res 2nd Res
45.80 47.52 48.32 50.04 50.84

Crude Oil - Woodie's pivot points as of Aug 20, 2017

Camarilla pivot points

4th Sup 3rd Sup 2nd Sup 1st Sup 1st Res 2nd Res 3rd Res 4th Res
47.39 48.09 48.32 48.55 49.01 49.24 49.47 50.17

Crude Oil - Camarilla pivot points as of Aug 20, 2017

Fibonacci retracement levels

0.0% 23.6% 38.2% 50.0% 61.8% 100.0%
46.60 47.19 47.56 47.86 48.16 49.12

Crude Oil - Fibonacci retracement levels as of Aug 20, 2017

Gold

Indicators

Moving Averages RSI Parabolic SAR CCI
Long Neutral Long Neutral

Gold - Indicators as of Aug 20, 2017

Floor pivot points

3rd Sup 2nd Sup 1st Sup Pivot 1st Res 2nd Res 3rd Res
1235.16 1251.11 1268.66 1284.61 1302.16 1318.11 1335.66

Gold - Floor pivot points as of Aug 20, 2017

Woodie’s pivot points

2nd Sup 1st Sup Pivot 1st Res 2nd Res
1251.51 1269.45 1285.01 1302.95 1318.51

Gold - Woodie's pivot points as of Aug 20, 2017

Camarilla pivot points

4th Sup 3rd Sup 2nd Sup 1st Sup 1st Res 2nd Res 3rd Res 4th Res
1267.78 1276.99 1280.06 1283.13 1289.27 1292.34 1295.41 1304.63

Gold - Camarilla pivot points as of Aug 20, 2017

Fibonacci retracement levels

0.0% 23.6% 38.2% 50.0% 61.8% 100.0%
1267.07 1274.98 1279.87 1283.82 1287.77 1300.57

Gold - Fibonacci retracement levels as of Aug 20, 2017

Silver

Indicators

Moving Averages RSI Parabolic SAR CCI
Long Neutral Long Neutral

Silver - Indicators as of Aug 20, 2017

Floor pivot points

3rd Sup 2nd Sup 1st Sup Pivot 1st Res 2nd Res 3rd Res
15.83 16.19 16.59 16.95 17.35 17.71 18.11

Silver - Floor pivot points as of Aug 20, 2017

Woodie’s pivot points

2nd Sup 1st Sup Pivot 1st Res 2nd Res
16.20 16.62 16.96 17.38 17.72

Silver - Woodie's pivot points as of Aug 20, 2017

Camarilla pivot points

4th Sup 3rd Sup 2nd Sup 1st Sup 1st Res 2nd Res 3rd Res 4th Res
16.58 16.79 16.86 16.93 17.07 17.14 17.21 17.42

Silver - Camarilla pivot points as of Aug 20, 2017

Fibonacci retracement levels

0.0% 23.6% 38.2% 50.0% 61.8% 100.0%
16.54 16.72 16.83 16.92 17.01 17.30

Silver - Fibonacci retracement levels as of Aug 20, 2017

Copper

Indicators

Moving Averages RSI Parabolic SAR CCI
Long Neutral Long Neutral

Copper - Indicators as of Aug 20, 2017

Floor pivot points

3rd Sup 2nd Sup 1st Sup Pivot 1st Res 2nd Res 3rd Res
276.39 281.48 287.08 292.17 297.77 302.86 308.46

Copper - Floor pivot points as of Aug 20, 2017

Woodie’s pivot points

2nd Sup 1st Sup Pivot 1st Res 2nd Res
281.61 287.34 292.30 298.03 302.99

Copper - Woodie's pivot points as of Aug 20, 2017

Camarilla pivot points

4th Sup 3rd Sup 2nd Sup 1st Sup 1st Res 2nd Res 3rd Res 4th Res
286.80 289.74 290.72 291.70 293.66 294.64 295.62 298.56

Copper - Camarilla pivot points as of Aug 20, 2017

Fibonacci retracement levels

0.0% 23.6% 38.2% 50.0% 61.8% 100.0%
286.57 289.09 290.65 291.92 293.18 297.26

Copper - Fibonacci retracement levels as of Aug 20, 2017

If you have any questions or comments on this commodity technical analysis, please feel free to reply below.

World Out Of Whack: Ruskies, Sanctions, And Bitcoin – Coincidence?

World Out Of Whack: Ruskies, Sanctions, And Bitcoin – Coincidence?

Hands up if you’ve got kids.

This is how it works. And tell me I’m wrong.

Your progeny sees something, wants it, and whines asks for it. Could be an ice-cream, a fluffy toy, or that juicy sandwich you just prepared. Sometimes they get it, often they don’t. Time progresses and your tolerance regresses.

“Daddy, I want….”

“No!”

“But you don’t know what I want.”

“The answer’s still no.”

It’s as automatic as your knee flex when Dr. Sergei brings out his little rubber hammer and pops you on the knee. Boing. No!

Automatic responses come from habit, and habit is, at least initially, a function of risk and reward.

This is bureaucracy in a nutshell.

Let me explain…

Take Mikhail, a middle aged bureaucrat, who, through a combination of lack of foresight and time working for the beast, has had all the life and common sense sucked right out of him. Innovation and risk are as foreign to Mikhail as sushi to a Masai warrior.

Mikhails job pays him to tick boxes and ensure all boxes are ticked. Mess it up and he gets a pink slip, the money for his kids’ university, and wife’s shoe fetish stops flowing. Risk. Pain.

Along comes Ivan with something out of the box. A new business, in a new industry. It doesn’t even fit in any of Mikhail’s boxes. Risk. Pain.

Dr. Sergei’s hammer. Boing. No!

Ever wondered why countries with high levels of bureaucracy never have much innovation?

Think about it..

If Mikhail says yes and it works out, Ivan gets a yacht and Mikhail gets to keep his pension. If he says no, he still gets his pension. If, on the other hand, Mikhail says yes and it fails with the finger pointing going to him, he risks losing that pension. What would you do?

It’s all risk, no reward for Mikhail.

So along comes Bitcoin, and governments (not just the Ruskies) initially banned it.

The Problem with Bitcoin

Is that nobody actually asked for permission from Mikhail. Permission wasn’t granted but then it was never needed. A protocol doesn’t give an “isht” about any central authority and can’t be argued with. That’d be like arguing with soil.

When Sophia in Moscow wanted to use Bitcoin, she did. And when Yoshiko in Tokyo wanted to, she did. A government that said no-no, bad, dangerous, scary, only to have the kids go ahead and play in the traffic anyway, looked awfully like a eunuch – impotent.

The about turn notably from both Japan and Russia isn’t because the paper pushers suddenly took a swig from the innovation and risk bottle but because they’re largely powerless to stop it.

Providing Authority After the Fact

Imagine your snotty little kid Johnny, rather than asking you for something, simply goes ahead and takes it.

Imagine further that there was absolutely nothing you could do to stop him. Would it not, at least ostensibly, be far easier to turn around and just say, “Oh no, it’s OK. Johnny Snotnose has my blessing.”

After all, suggesting it’s not sanctioned would reveal a weakness, especially if you couldn’t bring out the cane for Johnny.

Weakness, as mentioned last week, is anathema to leaders who rule with fear.

And so it is that last month, at the St. Petersburg Economic Forum, Vlad met with Vitalik Buterin, developer of Ethereum, where reportedly the Russian President viewed the technology as a “promising tool to assist Russia in diversifying its economy beyond oil and gas”. According to a statement on the Kremlin’s website, Putin said:

“The digital economy isn’t a separate industry, it’s essentially the foundation for creating brand new business models.”

Now, before you sing with the choir of libertarians thinking Vlad just joined the ranks, just remember that along with all bureaucrats everywhere they will want their slice of the pie – a topic I discussed just the other day.

Anyway…

Far from banning Bitcoin and crypto currencies, Russia is now, via a politically connected (hey, this is Russia) oligarch, raising US$100m to mine crypto currencies.

Here’s a question for you: What does Russia have a lot of?

Vodka? Yes. Brides online? Yes. But get your head out of the gutter, what else?

Energy, very cheap energy.

Mining cryptos requires cheap energy, something Russia has a helluva lot of.Click To Tweet

Sure, there are other countries out there with cheap energy such as Saudi Arabia, but the problem with the Middle East… actually there are a lot of problems with the Middle East, but just one of them is that it’s bloody hot. This matters when you’re running servers, which give of more heat than one of their suicide bombers.

This makes mining farms in hot places an economically tough call. Russia, on the other hand, has both cheap bountiful energy as well as sub-zero temperatures. Perfect for crypto mining. Something you can do while swilling vodka and searching for a bride.

There is more…

Russia’s central depository is building its own crypto currency wallet:

“Russia’s National Settlement Depository (NSD), the central depository for Moscow Exchange, the largest exchange group in Russia, is developing a blockchain platform to provide deposit and settlement services for digital assets and cryptocurrencies.”

These are significant events because they signify that crypto currencies are not only now being taken seriously by business but increasingly by governments.

Enter Geopolitical Tensions

Washington being brilliant just sanctioned Russia and managed to piss of both Vlad and Angela in one fell swoop.

This after accusing Xi of being a naughty boy and now pressuring him to “do something” about young Kim. This is the sort of fragmentation I promised you last year was the future with the incoming “strong men”, and with fragmentation comes a deeper desire to de-risk one’s position.

Tell me, if you were Vlad or Xi sitting on a pile of Benjamins, would you feel more or less comfortable?

Yeah, that’s what I though, too.

Wiley buggers, those Ruskies.

Question



– Chris

“We can ignore reality, but we cannot ignore the consequences of ignoring reality.” — Ayn Rand

25 Best Paying Cities for Nurses

25 Best Paying Cities for Nurses

Nurses are often the unsung heroes of the healthcare industry, assisting doctors and patients and keeping hospitals running smoothly. Yet nurses’ wages vary greatly across the country, ranging from a healthy six-figure salary to just over $45,000 a year depending on the city.

Of the 25 cities in which registered nurses are paid the highest salaries, 19 are located in California. One reason for this is the strength of California’s nurses union, the California Nurses Association. According to the group, nurses “represented by CNA/NNOC have many of the best collective bargaining contracts in the nation.” Many cities in California also have high costs of living, which often result in higher salaries. For example, nurses in the famously expensive San Jose and Santa Cruz metro areas earn over $130,000 per year.

Conversely, many of the areas where nurses are paid less have lower costs of living, including small rural areas in Alabama and Tennessee. For instance, in the relatively small area of Florence-Muscle Shoals, Alabama, registered nurses earn $46,190 – about $22,000 less than the national median salary. However, registered nurses earn more than the median salary for all jobs in each area, including in the 25 areas where nurses earn the least.

Click here to see the best paying cities for registered nurses.
Click here to see the worst paying cities for registered nurses.

In order to identify the metropolitan areas that pay registered nurses the highest and lowest salaries, 24/7 Wall St. reviewed data from the Bureau of Labor Statistics’ Occupational Employment Statistics program for May 2016. The largest hospital for each area is based on the number of employees.

Trader Tax Advantages and How You Can Get Them

Trader Tax Advantages and How You Can Get Them

trader tax advantages

 

The good news is that if you are a full-time, hardcore Forex trader, there are some significant tax advantages available to you that aren’t available to more casual market participants. The bad news is that it’s pretty tough to qualify for them. But we’ll get to that in a bit. Why would it be a good idea to qualify as a ‘trader’ for federal income tax purposes?

First of all, you get to deduct a lot more. If you’re a full-time trader, rather than a garden-variety do-it-yourself investor, you get to list your deductions on a Schedule C. Essentially, the IRS then recognizes all your trading expenses as business expenses. Everyone else has to use Schedule A. That difference right there can potentially save a trader a chunk of change when it comes time to file income taxes.

The Schedule C Advantage

Normally individual investors have to deduct their trading and investment expenses on Schedule A of their individual income tax return. The IRS treats them as miscellaneous itemized deductions, and as such, they are generally subject to a 2 percent of adjusted gross income threshold before they become tax deductible. This means if an investor has an annual income of $100,000, and $5,000 of trading expenses, he can only deduct $3,000 (assuming no other miscellaneous itemized deductions).

A trader in the exact same situation, but who qualified for trader tax status, lists trading expenses on Schedule C, Profit or Loss from Business. Schedule C expenses aren’t subject to the 2 percent threshold that applies to miscellaneous itemized expenses, and therefore the trader would be able to deduct all $5,000. The same deal applies to interest expense if any. This is significant for forex and commodities traders, who are often highly leveraged and therefore may have significant interest expenses. Traders can deduct every penny of interest on their Schedule C, where individual investors must list investment interest expense as a miscellaneous itemized deduction on Schedule A. (Note: Commissions and other costs of acquiring or disposing of securities are not deductible but must be used to figure gain or loss.). This became an even more significant issue beginning in 2013, as so-called “Pease limitations” restricted the amount of miscellaneous itemized deductions you could take if your income was over $250,000 (singles) or $300,000 (married filing jointly). Furthermore, while investors can only deduct interest expense to the extent of investment income, traders have no such limit. If interest expenses exceed investment income, traders can deduct any amounts left over against ordinary income. This is true even if interest expenses exceed investment income by more than $3,000.

The Section 475 Mark-To-Market (MTM) Election

This is a significant tax advantage available to qualified traders that aren’t available to ordinary investors. The IRS allows those qualifying as traders to elect mark-to-market (MTM) accounting on securities and Section 1256 contracts. The rules are laid out in Section 475 of the Internal Revenue Code. The rule lets you treat any covered security you hold (other than for inventory, which isn’t applicable to most individual traders) as though you sold it for its fair market value at the end of the year. So you don’t have to sell anything to recognize a taxable loss (or gain) for that matter. Gains are treated as ordinary income, and losses are treated as ordinary losses. Ordinary losses are better to have than capital losses because you can use them to offset all types of income, including ordinary income, capital gains, interest and portfolio income and passive income.

In contrast, usually, any investor in a Section 1256 contract has to accept capital gains tax rules. That hurts because if you have more than $3,000 in net losses after your gains are canceled out, you can’t deduct the excess losses above the $3,000 mark against income. If you’re a trader, you can get around this limitation by making the Section 475 MTM election with the IRS (though you have to do so by April 15th. You can’t look back in time and make the election).

Tip: If you have a large 1st quarter loss, you may want to consider making this deduction to ensure that you can maximize your write-offs. Many advisors recommend it to the vast majority of their clients, because the downsides are few and far between, compared to the upsides of MTM election.

If you blow the election deadline, you can still form a new entity and trade through that, as long as you make your election within 2 months and 15 days of forming the entity.

Carryback of Losses

Got excess losses? Investors are out of luck on anything over $3,000, as we mentioned. They have to carry those losses forward and apply them in future years. But if you’re a trader, and you qualify for the MTM election, that election allows you to carry losses backward in time, and get a refund from a limited number of prior tax years!

The Alternative Minimum Tax

If you are subject to the alternative minimum tax, most of your investment expenses get ‘clawed back,’ or disallowed under the AMT. That’s not true, however, if you qualify as a trader under IRS rules. Your expenses get treated as deductible business expenses under either set of tax rules. Investors, as opposed to traders, have to list capital gains and losses on Schedule D.

Do I Qualify for Trader Status? 

While the tax advantages of trader status are significant, it’s not easy to qualify for them. According to the IRS,

  • You must seek to profit from daily market movements in the prices of securities and not from dividends, interest, or capital appreciation;
  • Your activity must be substantial; and
  • You must carry on the activity with continuity and regularity.

Obviously, Congress wrote in a lot of wiggle room, because each of these standards is very subjective. The law has never specifically defined terms like “substantial” and “with continuity and regularity,” nor has Congress offered traders much in the way of safe harbors. So where the statute doesn’t provide much guidance, we must look to actual enforcement actions, regulations and case law for guidance. In a recent U.S. Tax Court case, Endicott v. Commissioner, the court specifically ruled that executing in trades 75 times in one year and 99 times in another was not sufficient to qualify as continuous and regular trading. This was despite the fact that Endicott did, in fact, devote substantial time to monitoring his investments on days in which he did not execute any trades.

Furthermore, the judge held buy-and-hold investing against him. Yes, it seems strange to think of someone who engages in 99 trades in a year as a ‘buy-and-hold’ investor. But the facts in the case led the judge to conclude that Endicott was looking to dividends and capital gains to generate his profits, rather than adhering to the IRS’s requirement that he depends on daily market movements. Endicott’s average holding period per trade during the years covered by the dispute was 35 days, during which time Endicott collected $120,000 in dividends or more. Furthermore, Endicott, a retired business owner, collected over $350,000 in consulting fees during the same period. With so much income from an outside source, the court held, Endicott as an individual could not be considered to be a full-time trader.

So what do you need to do?

Robert Green, CPA, an accountant who specializes in providing services for active traders, has laid out what he calls his “Golden Rules” for qualifying for trader status. Given the precedents established by case law and private letter rulings, Green suggests the following are the real criteria to establish oneself as a trader for tax purposes:

  • Trade full-time or part-time, all day, every day.
  • Minimum 4 hours per day, average, working your trading business.
  • No real lapses in activity. You trade all year long like you’re working a full-time job.
  • Trade on 75 percent or more of available trading days.
  • You should be making 1,000 trades or more each year.
  • Most of your trades should be day or swing trades
  • Your demonstrated intent should be to make a living as a trader.
  • You have invested heavily in tools, education, software, etc.
  • You have a home office or dedicated office space outside the home.
  • Your account size should be big relative to your overall assets.

Furthermore, Green says, algorithmic trades don’t count. You have to be the one pulling the trigger. In addition, your profit model should rely on buying and selling frequently at a profit. The more you rely on long-term holding, interest and dividend income, and capital gains you attempt to treat under capital gains tax rules, then the more questionable your status as a trader becomes.

For more specific information, see Green’s book, the Green Trader Tax Guide.

If you find that you do qualify for trader status and receive trader tax advantages on your forex income, share your thoughts with us!

Contributor:  Jason Van Steenwyk

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Metals Market Update for Aug. 17

Metals Market Update for Aug. 17

Gold Prices (LBMA AM)

17 Aug: USD 1,285.90, GBP 998.12 & EUR 1,096.74 per ounce
16 Aug: USD 1,270.15, GBP 985.13 & EUR 1,082.29 per ounce
15 Aug: USD 1,274.60, GBP 986.92 & EUR 1,084.05 per ounce
14 Aug: USD 1,281.10, GBP 987.34 & EUR 1,085.48 per ounce
11 Aug: USD 1,288.30, GBP 993.67 & EUR 1,096.47 per ounce
10 Aug: USD 1,278.90, GBP 985.39 & EUR 1,091.67 per ounce
09 Aug: USD 1,267.95, GBP 974.80 & EUR 1,079.79 per ounce

Silver Prices (LBMA)

17 Aug: USD 17.02, GBP 13.23 & EUR 14.55 per ounce
16 Aug: USD 16.68, GBP 12.96 & EUR 14.25 per ounce
15 Aug: USD 16.89, GBP 13.12 & EUR 14.38 per ounce
14 Aug: USD 16.97, GBP 13.09 & EUR 14.39 per ounce
11 Aug: USD 17.09, GBP 13.18 & EUR 14.53 per ounce
10 Aug: USD 17.08, GBP 13.14 & EUR 14.57 per ounce
09 Aug: USD 16.59, GBP 12.76 & EUR 14.14 per ounce

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