China trade war peace treaty will be good for markets. Italy populism is bad for markets. The big Australian is assigned for profits. Ethereum bounces.
Portfolio News
Italian Populism Italy has not been able to form a majority government for some time. The manouvering at the weekend pointed to an agreement between two of the populist parties to revolve leadership - i.e., not a coalition but some form of power sharing.
I did write a few days ago that markets seemed to be happy to shrug off geopolitical disruptions. My portfolios and bond markets are showing that this is one they are not ignoring. All my Italian stocks, mostly in financials, performed markedly down during the week. I am thinking that they will go back to relying on data once some form of government is created.
The populist parties reject EU austerity and want to renegotiate Italy's debt
The shared viewpoints are to guarantee lower incomes and deport migrants and reduce taxes and cut debts. I am not sure how they can do all of these without increasing debt, but that is the wonder of Italian politics. Dream. Promise. Fail to deliver. Lose next election.
http://www.bbc.com/news/world-europe-44168602
Tariff Tantrum It seems that the US and China have found a way to postpone the implementation of tariffs. Tantrum is over for now.
US Treasury Secretary Steven Mnuchin says.
The US trade war with China is "on hold" after the world's largest economies agreed to drop their tariff threats while they work on a wider trade agreement
The US had demanded a $200 billion reduction in annual trade surpluses. No figure was given in the press announcement.
This announcement will take one more level of uncertainty out of the markets. Following on from my observation that Russell 2000 made an all time high last week, I did go through a Peter Brandt video on Real Vision at the weekend where he discussed his favourite market indicator the Advance Decline Line. He compared the NYSE Composite Index and the NYSE Advance Decline Line. One is the liar and one tells the truth. The price is the liar and the advance decline line tells the truth.
What is the Advance Decline Line? It is the difference between the number of stocks that have gone up and the number of stocks that have gone down. Why does it tell the truth? Market indices are weighted by the market capitalisation of the stocks - i.e., the big stocks dominate the value of the index even though a large number of stocks may be moving differently.
Looking at the S&P500, we see the ADL (green line) making higher highs while the S&P500 has been making lower highs (black line).
His view is there are still upside opportunities in the S&P500 and the NASDAQ. Finding which stocks is the next challenge. With the China trade announcement, I will not be surprised to see a strong move ahead in US markets today.
Bought
Ethereum (ETHUSD). I opened a new Ethereum position on a 4 hour reversal on Friday. Price action was a long tailed low test bar (not really testing a level) followed by an indecisive bar - my pending order went in above the indecision.
Price targets are set for each open trade at two prior reversals on the daily chart.
I am trading these without stop losses as I have plenty of margin in the account and I am wary of whip saw price drops taking my trades out. [Beware: Do Not Copy This Unless You Know What You Are Doing!!] Your trades could land up looking like my trading bots.
Sold
BHP Billiton (BHP): Australian Miner. Shares assigned on expiry of covered call for 56% profit since August 2016. Original trade set up to capture rebound in commodities. I had bought the stock as I was setting up a bull call spread on options and my brokers required me to hold stock to be able to sell calls. Income trades have contributed an additional 3.26% over the last 4 months. I continue to hold the stock in this portfolio via the Australian listing.
Income Trades
May options expiry has come along. Of the 8 contracts written, one was assigned (BHP) and 7 expired worthless. Average income was 0.64% which is respectable as I only wrote contracts with 3 weeks to go to expiry. Net income was $750 which more than covers monthly research costs. I will open a Bloomberg.com subscription to get access to their reports - they now charge after 5 free articles. New trades will be set up overnight - I need to find a stock that I am happy to assign to replace the BHP position that was assigned.
Cryptocurency
Bitcoin (BTCUSD): Price range for the weekend was $661 (7.7% of the high). Price did not test the bottom of "no mans land" but it did find buyers all weekend with 3 successive higher highs.
CryptoBots
Outsourced Bot No closed trades on this account since Thursday (204 closed trades). Problem children was unchanged (>10% down) - (13 coins) - ETH, ZEC, DASH, ADA, PPT, DGD, GAS (-42%), STRAT, NEO (-44%), ETC (-40%), QTUM, BTG (-42%), XMR.
NEO remains the worst coin at -44%
Profit Trailer Bot No closed trades over the weekend. Dollar Cost Average (DCA) list was unchanged at 12 coins with 4 coins improving, 4 coins trading flat and only two worse ((BTG, AION). Of note was all coins trade positively in the last 24 hours (green numbers in the 24H column)
New Trading Bot Positions improved strongly to -28.3% (was -33.1%).
All coins improved with NEO remaining the worst with only one trade worse than -50%. This status is now close to 3 months - not the way a trading robot should work.
Currency Trades
Swiss Franc A reminder to rusty forex traders after both CHF trades stopped out.
- Spend a few days watching charts before you start trading again
- Focus on trading technically rather than mixing fundamentals and technicals
- Use Forex Options for fundamental trading over a longer time frame.
Two Swiss Franc trades stopped out on Friday for a 1% loss overall.
Australian Dollar (AUDUSD): Opened a forex trade short the Australian Dollar. The chart looks a little tidier with price cycling along the EMA nicely. I do notice that the last low was a higher low which indicates a possibility of a reversal.
With the China trade relief announced on Sunday (US time) I fully expect this trade to stop out when markets open as the Australian Dollar will bounce.
Forex Robot closed 2 trades (0.08% profit) and is trading at a negative equity level of 17.4% (lower than prior day's 21.8%).
Outsourced MAM account Actions to Wealth closed out 1 trades for 0.24% profits for the day.
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. Ethereum image comes from Ethereum.org. 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
Charts: http://mymark.mx/TradingView - this is a free charting package. I have a Pro subscription to get access to real time forex prices
Crypto Trading: get 6 months free trades with Bitmex for leveraged crypto trading. http://mymark.mx/Bitmex
Bitcoin: Get started with mining Bitcoin for as little as $25 http://mymark.mx/Galaxy
May 18, 2018