TIB: Today I Bought (and Sold) - An Investors Journal #210 - Africa, Pakistan, Social Media, French Electricity, Altcoins

Another rollwercoaster day. The axe falls on the FANGS = time to nibble. More work on Frontier Markets and uncorrelated trades in utilities. Bitcoin tests the lows some more.

Portfolio News

Falling FANGS The market is very nervous. One minute it is the tariff tantrum. The next minute it is the Federal Reserve. Then along comes the Cambridge Analytica/Facebook saga. What was it today? Who knows but technology stocks were the victim - the headline picture tells us a bit. The Uber self driving car trial was banned in Arizona and it looks like Uber will stop in California. This is bad for chip stocks - or so the market thought.

The bond market is distinctly sending a signal to be cautious

https://www.bloomberg.com/news/articles/2018-03-27/tech-stocks-tumble-again-in-sudden-wave-of-afternoon-selling

This is the key chart signalling the need for caution in equities rather than the direction of interest rates - 10 year yields test a break down lower.

https://www.bloomberg.com/news/articles/2018-03-27/treasuries-finally-give-in-to-tech-turmoil-as-10-year-below-2-8

What I am seeing is a divergence in technology stocks between the heavy hitters like Facebook and Alphabet and NVIDIA and the others. It is time to dig into the sub sectors and seek out future winners - especially in chips and networks.

Bought

VanEck Vectors Africa ETF (AFK): Africa Index. My bids for widening exposure to frontier markets were taken up. Here is the buy:sell chart for Africa - making a lower low after a period of sideways trading.

The country mix of AFK is a bit misleading as a number of stocks held are listed in London and Toronto.

The South African percentage at 29% is more emerging markets than frontier markets - the top 15 listing only has one South African company in in it - Naspers (the media business) at the top. The rest are much smaller pieces.

What I like in the top 15 is the mix of countries (South Africa, Egypt, Kenya, Morocco, Nigeria, Ghana, Ivory Coast, Gabon) and a number of gold producers - that helps as a hedging play.

http://etfdb.com/etf/AFK/

Global X MSCI Pakistan ETF (PAK): Pakistan Index. The buy:sell chart for PAK shows a more recent turning over to outperform the S&P500 for Pakistan.

Global X Social Media ETF (SOCL): Social Media. I do not know what the end point will be for the Facebook fallout. My experience is that markets tend to over-react. I put in a bid on this social media ETF before market open - I was not expecting a 12% drop in Twitter price to add to the woes. My bid was taken up at market open near the highs for the day and price promptly dropped 4.58% on the Twitter fallout.

The list of top 15 holdings shows the importance of Twitter and Facebook (22% of the holdings). What I like about this set up is that a number of Chinese social media businesses (32% of total) are included - they are less likely to be affected by the Facebook fallout

http://etfdb.com/etf/SOCL/

Commerzbank AG (CBK.DE): German Bank. Averaged down entry price on December 2022 strike 16 call options. With closing price down to €10.85 this option is now well out-the-money but there are 4.75 years to go to be right

Sold

Electricité de France S.A (EDF.PA): French Utility. I saw a news flash that EDF were investing in a large scale power storage business in Europe. This prompted me to review my positions in EDF. My view is that the more that EDF can migrate its reliance on French nuclear power generation the better its future will be.

https://uk.reuters.com/article/uk-edf-renewables-storage/edf-to-invest-8-billion-euros-in-power-storage-business-idUKKBN1H31CE

Rolled up June 2019 strike 9.6 call option to December 2019 strike 12 call option - adding more time and staying out-the-money. With €11.57 closing price and €1.34 premium (11.2% of strike) - this does not have far to go to break even. Locks in 122% profit since August 2017 - nice work for 7 months holding.

The profit result tells a story. How did price work out compared to what I plotted? Here is the updated chart which shows the call options just sold (in pink) and the strike 14's I am also holding. When I bought those there were no strike 12's listed.

The good news is price has broken through the 100% profit level for the pink contracts. The consolidation phase after the first WXY wave has run longer than I plotted last time. Next chart shows the new contracts with bought call (12) and 100% profit (in green this time).

I have moved the WXY clone across to start at the bottom of the current run up. That suggests to me that the new trade will comfortably make 100% but the strike 14 call options will need something more. The encouraging part of the chart is the top 100% profit target is less than half way to the mid 2015 highs.

Cryptocurency

Bitcoin (BTCUSD): Price range for the day was $469 (5.7% of the high) which is well below average. Yesterday morning we saw a bullish engulfing bar on a 4 hour chart. It was not followed by a move higher but by a big battle between buyers and sellers squeezed between two battle lines (the red dotted lines which come from the daily chart).

Price did drop below the support line of $7848 and tested it several times - so far it is holding though it is clear that we remain in a medium and short term downtrend.

CryptoBots

Outsourced Bot No closed trades on this account. Problem children (>10% down) list was unchanged - ETH, ZEC, DASH, NEO, ENG, EOS, STRAT, ETC, XLM, ADA, QTUM, BTG, ARK, GAS, OMG

Profit Trailer Bot Overall the bot closed 3 trades for an average profit of 1.72% bringing overall average to 1.50% out of 234 trades (was 1.50%)

Dollar Cost Average (DCA) list was increased by two with LSK and LTC joining the list. Litecoin announced that the Litepay venture was being sold off - a drop of only 3.36% was a lucky break - so far. Of the 7 that were on the prior list, 5 did worse and 2 did better squeezing out small gains in 24 hours (the green numbers).

New Trading Bot No change as this is now under buy and hold management and the bot is not trading - end of trial period. Overall loss average is dropped to -35% (was -31%) with NEO still the worst performer at -55% and -59%. Best performer is BTC at -19%

Currency Trades

Forex Robot did not close any trades and is trading at a negative equity level of 11.7% (higher than prior day's 10.8%).

Outsourced MAM account I run an outsourced forex trading account with Actions to Wealth. They closed out 3 trades for 0.58% loss 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 Bloomberg.com. ETF images come from etfdb.com - a fantastic resource. 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

March 27, 2018