Markets take a pounding following the tariff tweets. One surprising spot in my portfolios is lithium - adding a little more. Looking to diversify marijuana bets too. And added to Nasdaq hedges.
Portfolio News
Tariff Trade War
It's on as tariff war heats up. Markets fall all around the world.
I watched the open of US markets - they made a bold attempt to hold the line below a 1% fall and then began to slide across the boards. News that the China trade delegation will travel did not help much. Talking heads were less clear that the Trump tweets were just a part of the negotiation games he plays. It seems that Donald Trump thinks the US is now in a much stronger position than China. I found this article this morning that points to why he feels so confident - two US numbers are very strong 3.2% GDP growth and 3.6% unemployment.
I would add in two more numbers - Dow Jones up nine weeks in a row and the longest winning streak since 1995 and China markets fall 6% on Monday and US only 1%. The guts of the article are more concerning. US companies that have not reduced exposure to China are being told that they had a year = bad luck now. I sometimes wonder. Supply chains have taken years to build up - they do not switch over in 1 year. It would take more than 1 year alone to get planning approvals to build a new plant pretty well anywhere in the world.
Treasury markets started to follow the drop too with a changing sentiment emerging.
It could get worse. The GDP numbers were good BUT they are not going to stay good - simple recipe for yields to slide.
Australian Rates
Reserve Bank of Australia chooses to hold interest rates
A cut had been expected by more than half the economists. The RBA cites rising wages, rebounding resources sector and strong infrastructure spending though they did express concern that inflation was not picking up. Australian is in the middle of an election cycle (May 18). Opposition Labour Party has said they will reduce the inflation target the RBA must apply. Labour are also citing a rate cut as an indication that the current government is not doing a good job. Labour have a good chance of winning. My guess is the RBA chose not to cut as they wanted to keep the powder dry in case Labour wins and they do not want to support Labour views by signalling problems in the economy. Now there has been precedent in the past of a rate change during an election campaign - not this time.
For my portfolios the result was a spike in the Australian Dollar by 0.5% - I doubt this will hold as the trade war escalates. China is Australia's largest trading partner.
Crypto Craze
Binance gets hacked and loses 7,000 Bitcoin (around $40 million)
Well they say that trading can continue - no chance - here is the result of my login attempt on one account.
The other account did not get as far as that. I did eventually get access - all looks fine. They say that any losses will be covered. The hack was well orchestrated and used a number of compromised accounts. They say that the hackers got hold of login details and 2FA details.
https://binance.zendesk.com/hc/en-us/articles/360028031711
I did notice earlier this week that one of my login attempts was blocked for 2FA failure. I fixed it by resynchronising computer clock after a power failure. Probably a coincidence but always good to use 2FA to protect any coins in a hot wallet. Better to keep them offline
https://cryptoslate.com/worlds-biggest-crypto-exchange-binance-reports-7000-bitcoin-hack/
Bought
Aphria Inc (APHA.TO): Canadian Marijuana. Increased holding in one portfolio to diversify marijuana holdings as I watch price of Tilray (TLRY) slide, the largest holding in this portfolio. The chart compares US listings of Tilray (black bars) with Aphria (APHA - blue line), Aurora Cannabis (ACB - ochre line) and Canopy Growth (CGC - green line). Now 94% growth from August 2018 is great but pales in comparison to the others.
I am holding a position in Aurora Cannabis but not in Canopy Growth - the rate of change feels quite heady to me. What the chart does tell me is that Tilray have started to do something different during 2019 in that the share price has not kept pace since breaking the downtrend, whereas the others have.
Pilbara Minerals Limited (PLS.AX): Australian Lithium. Nibbled another small holding. Market activity and market chatter is growing about the prospects of a deal, probably intensified by the Wesfarmers (WES.AX) bid for Kidman Resources (KDR.AX). Kidman are developing a lithium concentrate plant near Perth with SQM. Of note for me was on a down day in US on Monday, major lithium stock, Sociedad Química y Minera de Chile S.A. (SQM) went up. Idea came from my builder - something of a stock picker.
Shorts
Prohares UltraPro Short QQQ (SQQQ): Nasdaq Index. Added to my hedging position in one portfolio using this leveraged inverse ETF. This averages down my entry price after the strong run up in Nasdaq over the last 6 weeks or so. I also wrote a covered call immediately with June expiry - wanted July but they are not available (see below). The chart shows the sold call as a red ray (I have May and June expiries) a full 21% above trade price.
Price has bottomed after the big run up in Nasdaq since the October selloff. The last run up after a drop would take price past the sold call but probably after the May expiry (red dotted line). As this is a hedging trade I do not mind getting assigned and giving away opportunity. If the May expiry does not get assigned, I will sell another month.
]Note: This is an inverse ETF. It goes up when index falls]
Income Trades
Prohares UltraPro Short QQQ (SQQQ): Nasdaq Index. Sold June 2019 strike 11 calls for 3.32% premium (3.32% to purchase price). Trade price $9.04 (new trade). Price needs to move another 22% to reach the sold strike (new trade). Should price pass the sold strike I book a 22% capital gain.
Cryptocurency
Bitcoin (BTCUSD): Price range for the day was $284 (5% of the low). Price also spiked through the next resistance level up ($5921) and sagged back to close below. This is the first time price has been through this level since November 2018.
Ethereum (ETHUSD): Price range for the day was $15 (8.7% of the open). Price also spiked through the next resistance level up and sagged back to close below. It did clear the previous highs.
CryptoBots
Profit Trailer Bot No closed trades
New Trading Bot Trading out using Crypto Prophecy. No closed trades
Currency Trades
Outsourced MAM account Actions to Wealth closed out 1 trade on AUDNZD for 0.46% profits for the day. Well they did trade on RBA meeting day but chose to be on the long side of the AUDNZD cross. No trades open
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 and CNBC. 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
Bitcoin: Get started with mining Bitcoin for as little as $25 http://mymark.mx/Galaxy
May 7, 2019
