In the week the S&P500 makes a 54th high, my trade activity was replacing a few wild rides in uranium and shipping and buying into a few oversold results stories. And banked some nice profits in altcoins taking the funds back to Bitcoin
Portfolio News
In a week where S&P 500 rose 0.63% to touch all time highs a few times, my pension portfolio rose 0.87% driven in part by a surge in Japan stocks and in uranium stocks
The telling headline was the way Dow Jones reacted to the softer jobs report - not a panic as it seems the miss was because of supply problems rather than demand problems = not enough workers
The other telling headline came from Japan - it looks like they could be heading into the well known cycle of new PM every now and then. Read the view from Japan
Big movers of the week were Global X Uranium (URA) (+20.7%), Northern Minerals (NTU.AX) (+17.9%), JinkoSolar (JKS) (+15.7%), Honey Badger Silver (TUF.V) (+15.4%), Teekay Corporation (TK) (+14.7%), Loop Industries (LOOP) (+14.2%), Nippon Steel (5401.T) (+10.1%)
So the themes swing back to alternate energy and shipping. NTU is a rare earths explorer in Australia
Faller of the week was American Eagle Outfitters (AEO) down 17.4%
Crypto booms
Bitcoin price drifted lower with a small test lower down 3.3% and finishing the week 4% higher than the open. The 4 hour chart shows this as a parallel channel but the moving averages are aligned for he start of a new uptrend.
Altcoins caught a bid with Ether up 20% and coins like DOT and LINK up over 30%. The big rise of the week was HIVE up from open to peak 104% and closing the week 42% up
I have not really being paying attention - I might have seen the run in STEEMBTC and got a chance to dump some more STEEM. I want to switch over my STEEM holding into HIVE or LEO and have to go through BTC to do it.
Bought
Navios Maritime Holdings Inc (NM): Shipping. With the huge runup in price last week, there are signs that shipping markets are on the move again. In one portfolio, the approach was simple - add a small parcel of stock.
In my pension portfolio, I have a strike 5 covered call which is under water with price opening at $5.67. Average cost for the underlying holdings is appreciably higher than that. I was certainly not expecting the price to move 45% in a week. No question of closing out the covered calls though that would realize a smaller loss than going to assignment. I did not want to replace the whole tranche to average down the loss. I did buy a small parcel at $5.36 - that will average down the loss a little.
My instinct is the recovery trade will keep shipping stocks buoyant and price is unlikely to drop hard other than for the occasional bout of profit taking. As implied volatility is quite high, I decided to sell a September expiry strike 5 put option for the whole tranche. This gives me some premium back. Over the next few days I will be watching price momentum and decide whether to average down further.
Probably best outcome for me will be price dropping below 5 before September expiry and then moving higher in coming months. The shape of the chart tells me that there is plenty of upside to recover any losses I have to take - I might well be averaging down fully and more.
Stuhini Exploration Ltd (STU.V): Silver Mining. Averaged down entry price - nice to see a 10 percent price pop in two days after doing that.
Capital Product Partners LP (CPLP): Oil Shipping. Following my review of the chart last week, I added another small parcel. here is the chart again
Wells Fargo & Company (WFC): US Bank. Jim Cramer idea to add after the recent selloff which he viewed as overdone. In this portfolio, this was a replacement for stock assigned at last options expiry at 1.17% discount to assigned price. Always good to get back on a stock at a discount. Wrote a covered call for 1.17% premium with 3.4% coverage. This feels like a good stock to continue writing naked puts.
American Eagle Outfitters, Inc (AEO): US Consumer. AEO announced results which disappointed the market and price dropped 10%. In one portfolio, I have a naked put which is now likely to be assigned if price stays where it is between now and expiry. I bought a parcel of stock equivalent in size which will average down entry price if that put does get assigned. I also sold another naked put below the ruling price at 3.3% premium to grab back some premium (and also reduce average entry price if it too gets assigned.) I wrote a covered call on the new stock at 1.6% premium with 7.2% coverage
The encouraging part was Jim Cramer sent out a note after my trade saying he was adding to his holding in Action Alerts Plus portfolio as he felt the market have over-reacted.
Cameco Corporation (CCJ): Uranium. Cameco share price has been advancing after the July pull back and has now passed my covered call strike for part of my holding. I bought a replacement parcel of stock at 7.3% premium to likely assigned price. Wrote a covered call at 2.6% premium with 3.2% coverage. That coverage is not enough as price closed 8.14% higher on the day. Looks like I might have to chase this again.
I did the chase thing and bought a replacement parcel at 34% of the likely assigned price. I will not write a covered call on this new parcel and will let this run. My holdings in the Global X Uranium ETF (URA) also look like they will be assigned. Uranium is movng.
KraneShares CSI China Internet ETF (KWEB): China Internet. Price certainly seems to have found support despite the Chinese government placing limits on hours of online gaming for children. I added another small parcel of shares at a slightly higher price than prior week entry.
Commerzbank AG (CBK.DE): German Bank. Read an article in Wall Street Journal about the way the European Central Bank is incentivising banks to provide credit. The view was this was a good driver for profitability. I added to my relatively small holding in one portfolio just below the level of the sold calls I am holding. I also added in a naked put just 3.7% below the prevailing price for 1.1% premium
Shorts
Invesco QQQ Trust (QQQ): Nasdaq Index. With price opening at $381.04, the sold leg of my hedge ratio put spread is a long way out-the-money - just shy of 15%. The design of the hedge is to protect from a fall between 5 and 10 percent. I bought back the 332 strike put options and sold a strike which is 10% below the market = 342. The buy back was at 81% profit and the additional premium was 48% higher than the bought back premium. I did this in each of my 3 portfolios. In one I did manage to run the trade twice and had to reverse it for a small loss ($22.22 small - across both legs. The bigger element was trading costs).
In my other portfolio, I avoided the trading mistake and locked in 78% profit and the additional sold premium was 37% higher than the bought back premium (strikes were a little different). This seems like bit of a contortion but what it does is lock in another $100 per trade in profit if price does not drop more than 10% from new levels.
I do note in the book I used to guide my hedge trading, The Second Leg Down by Hari P Krishnan, that he uses weekly options to do the ratio put spreads - for me that is a lot more work - 4 times a month vs once a month and the occasional tweak.
Cryptocurrency
Solana (SOLBTC): With the big run up in price I took one third off the table and banked 132% profit since June 2021. This is the nature of profit taking - price is now 203% ahead
Fantom (FTMBTC): Also took profits on part holding locking in 203% profit since August 2021 - price continues to move and is now 260% ahead.
Avalanche (AVAXBTC): I did a quick review of the Top 20 coins by market capitalisation and noted one come into the top 20 for the first time. Avalanche is an umbrella platform for launching decentralized finance (DeFi) applications, financial assets, trading and other services. AVAX is the coin that will be used to access services. I added a half size position relative to the other coins in my Top 10 by Market Cap portfolio. This basically deploys coins from one Top 20 coin (SOL) to another.
The chart shows the entry point - I have done a half slot only as there is a chance this could turn over and offer a lower entry point.
https://coinmarketcap.com/currencies/avalanche/
Income Trades
In pension portfolio I wrote 7 covered calls (6 US and 1 Europe) and 4 naked puts (all US). In my other portfolio wrote 6 covered calls and one naked put (all US).
One naked put based on Action Alerts Plus buy lists was Mastercard (MA) Payment Services.
Currency Trades
My short AUDNZD trade hit a trailed stop loss profit for 0.25% profit - not enough to pay signal service for the month.
Euro (EURUSD): Sold Euros to fund life insurance premium due in a few days - payable in US Dollars.
Cautions: This is not financial advice. You need to consider your own financial position and take your own advice before you follow any of my ideas
Images: I own the rights to use and edit the Buy Sell image. News headlines come from Google Search. All other images are created using my various trading and charting platforms. They are all my own work
Tickers: I monitor my portfolios using Yahoo Finance. The ticker symbols used are Yahoo Finance tickers. Crypto tickers come from TradingView
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August 30 - September 3, 2021