Markets make new highs and for the most part I am taking profits especially in technology. Detailing a Google trade and a move in Uranium. Bitcoin does a swing high and low all in a week. Yields rise a little reflecting maybe a better mood.
Portfolio News
Market Rally
Markets continue to push higher highs as earnings come in better than expected.
Consumer spending is the main driver pushing stocks like Amazon (AMZN) and Mastercard (MA) and Visa (V) higher.
https://www.cnbc.com/2019/11/09/here-are-the-most-loved-stocks-on-wall-street.html
Treasury yields might just be a better bellwether of what the market thinks
Things are not as bad as markets thought a few short weeks ago with inversion not featuring now.
The on-off rhetoric of the China trade discussions is not helping. Markets seem to think there will be a deal but gets very skittish whenever there is a delay or even talk of a delay. See the agriculture chart below.
Bought
Alphabet Inc. (GOOGL): US Technology. With price opening a little more strongly at $1,272, I was looking to add to the stock position I was holding with a call spread risk reversal with January 2022 options. I picked one strike-out-the money for the bought call (1275) and looked for a 10% advance in price for the sold call (1400). Then I looked to see which sold put (same expiry) would give me a cash positive trade. I picked $1,000 which is just above the 52 week low at $977 and is somewhat equidistant (i.e., also 10% down). Net premium was a negative $5.25 (i.e., I got paid $525 for exposure to a 10% upside to GOOGL).
The chart shows the bought call (1275) as a blue ray and the sold call (1400) as a red ray and the sold put (1000) as a dotted red ray with the expiry date the dotted green line on the right margin.
Trade is looking for price to break the horizontal resistance line and rise some 10%. Price has to drop and stay below price levels not seen since the end of 2017 before the sold put would be assigned. That is where the risk is in the trade - it requires a $100,000 purchase if the stock is assigned. The trade management challenge is going to be whether to buy back the sold put if price does reach up to the target of $1400 or just let it run to expiry - 26 months is a long time to carry that risk. Maybe a better trade structure would have been to look to sell a put at a higher strike closer in time.
AXA SA (CS.PA): French Insurance. With closing price of €24.08 rolled up December 2021 strike 24 call options to average down December 2020 strike 28 call option. Locks in 3.3% profit since May 2019. This seems a strange thing to do - go up in strike for a closer in expiry. What the trade does is preserve capital with €370 in and only €80 out.
ING Groep N.V. (INGA.AS): Dutch Bank. With closing price of €10.37 rolled up December 2022 strike 10 call options to December 2022 strike 12 call option. Locks in 25% profit since May 2019. I was happy to find strike 12 options listed - they were not when I bought strike 14 calls earlier in 2019.
AbbVie Inc (ABBV): US Pharmaceuticals. Jim Cramer add to the Action Alerts Plus portfolio. I added a small parcel in one portfolio - will nibble a bit more when price drifts.
Cameco Corporation (CCJ): Uranium. Noticed the big move in Centrus Corp (LEU) stock over the last 10 days or so. Cameco has lagged behind - chart looks like it may have found a bottom and could break up from the downtrend break. The chart shows an existing options trade which is looking like it will run out of time unless price spikes like Centrus has. - hence buying the stock this time.
The right hand downtrend line is newly drawn and has just been broken. The comparative chart to Centrus (LEU - black bars) shows Cameco (purple line) lagging now by 132 percentage points - close half that gap and this is a tidy move. It is very much a longer term investment idea.
SBI Holdings (8473.TK): Japan Financials. Averaged down entry price. Primary interest in SBI Holdings is it runs a crypto exchange in Japan and has a strong interest in the development of Ripple (XRP).
Chicago Wheat Futures (WEAT): Wheat. Added two new contracts in the week on the back of improving trade rhetoric. The delay in deal signing put paid to the nice bounce in price.
Sold
iShares STOXX Europe 600 Technology (EXV3.DE): Europe Technology. Profit target set on partial holding at 52 week high for profits of 15% since December 2017.
Invesco China Technology ETF (CQQQ): China Technology. Profit target set on partial holding at 52 week high for profits of 23% since February 2017.
Swiss Re AG (SREN.SW): Swiss Insurance: With price closing at SFr103.75, closed out December 2019 strike 96.71 call options for 26% blended profit since April/September 2015. In pension portfolio closed out December 2021 strike 100 call options for 73% profit since January 2018. In personal portfolio this close was for 60% profit since August 2019.
Allianz SE (ALV.DE): German Insurance. With price closing at €225.05, closed out December 2020 strike 200 call options for 113% profit since July 2017
Eurostoxx50 (ESTX50): Europe Index. Closed one more in-the-money call option, December 2024 strike 3500 for 30% loss since January 2016. Just out of patience and can use the capital elsewhere.
Credit Suisse Group AG (CSGN.SW): Swiss Bank. With price closing at SFr12.92, closed out December 2021 strike 12 call options for 32% blended profit since January 2019. I am holding a few out-the-money options - no roll up this time.
NVIDIA Corporation (NVDA): US Semiconductors. Sold partial holding to take profits after a strong run following a Jim Cramer idea. Locks in 26% profit since May 2019. I remain exposed to the stock and a call spread risk reversal that is strongly in-the-money but not quite at the level of the sold call (225)
Centrus Corp (LEU): Uranium. Seems I was hasty selling this in one portfolio last week at $5 - this sale at $6.62 of a portion in one portfolio - switched to Cameco Corp (CCJ). Something is afoot in uranium stocks. (See Cameco discussion above)
Toyota Industries (6201.TK): Japan Industrials. Starting to take profits more actively in Japan once a stock passes 15% profit and holds there with a view to rotate into averaging down existing holdings or applying a new screen. Profit taking close for 18% profit since March 2017.
Burlington Stores, Inc (BURL): US Retail. Followed Jim Cramer idea to take profits for 14% profits since July 2019. Nice call on US retail by Jim Cramer = not as dead as the market thought.
Caterpillar Inc (CAT): US Industrials. Jim Cramer idea to trim profits as China trade story improves. Closed out whole holding for 7% blended profit since August 2018 and February/August 2019. Trade did benefit from averaging down with last tranche recording 12% profit in 3 months.
Soybean Futures (SOYB): Soybeans. Closed one contract for $1.40 (0.15%) per contract profit as I was a little uncomfortable with the trade rhetoric - got that one right as price fell quite hard on the latest rumbles from Donald Trump.
Shorts
Vanguard FTSE Europe Index Fund ETF (VGK): Europe Index. Put in place next hedging trade on Europe. With price opening at $56.09 looked for a 5% and 10% drop - bought December 2019 54/52 bear put ratio spread for a small net premium of $0.05
Direxion Daily MSCI Real Estate Bear 3X Shares (DRV): US Real Estate. Bought a small parcel to average down entry price and also round up a holding so I can write covered calls on the holding. With price closing at $26.23 was looking to sell a strike 30 call option for income.
Income Trades
Roku, Inc. (ROKU): With price at $146.50, sold a December 2019 strike 85 put option. Hard to see price dropping that far BUT that would be a good entry point.
VanEck Vectors Gold Miners ETF (GDX): Gold Mining. With price at $27.52, sold a November 22, 2019 strike 26 put option. This yields 0.83% premium and offers 5.8% coverage from the opening price for the next 17 days (under 3 weeks).
4 covered calls written at 0.54% average premium with coverage of 9.31%. Average premium for month is 1.21%
Cryptocurency
Bitcoin (BTCUSD): Price range for the week (Nov 4-10) was $925 (10% of the open). Price pushed higher from the start of the week and then drifted lower before a big move down running into the weekend to test below support at $8891 and recovering.
Closed one trade for $280.87 (3.05%) per contract profit on the early spike up in price. Replaced two contracts on 4 hour reversals (the dots on the chart) leaving 3.9 contracts open
Ethereum (ETHUSD): Price range for the week was $14 (7.7% of the open). Price advanced longer than Bitcoin making the high over the cycle after two days passing the prior higher high. Pull back did not push down to support at $177 and turned above it.
Closed three trades for $24.15 (2.25%), $5.50 (3.02%), and $0.82 (0.45%) per contract profit. I was using trailed stop losses and applied one incorrectly to a trade which closed for a $40.89 (-18.13%) loss = ouch mistake wiping out a few good trades. How does this happen? My trading strategy is high risk trading with no stop losses (always long). I start trailing stop losses when trades become profitable enough to cover the spread - did not get it right on this trade.
No replaced trades and 48 contracts open
Ripple (XRPUSD): Price range for the week was $0.04477 (15% of the open). A quite different price action with price pushing higher above the $0.30 level and then testing in one day all the way back below support at $0.27735 and then holding just above that level.
No closed trades and 150 contracts open.
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 16 trades for 1.65% losses for the week. Trades open on AUDCAD, USDCHF, XAUUSD (0.06% positive). Not a good week to be short USD and trading AUD on a Reserve Bank meeting week.
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
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
November 1-8, 2019