TIB: Today I Bought (and Sold) - An Investors Journal #119 - German Banks, Shopping Centres, Bitcoin, STEEM

Exit one German Bank one day and enter another the next seems confusing. I am short US and UK shopping centres once more. Bitcoin nerves continue but market feels a little more steady.

Bought

Deutsche Bank AG (DBK.DE): German Bank. Long standing pending order to average down entry price on December 2021 Strike 16.07 call options was hit. This may seem confused as I sold Commerzbank options the day before - the key to what I am doing is buying more time (to 2021). I added the first of these 2021 call options in March 2017. Since then price has been zigzagging around the strike price and stubbornly does not want to break higher. Implied volatility has come down (i.e, options have become cheaper) which means it makes a lot of sense to average down an entry price. Let's look at the chart which shows the bought call (16.07), breakeven, 100% and 200% profit as blue rays with the expiry date the dotted green line on the right margin.

The chart runs from the post GFC- recovery high in late 2010 through the European Debt Crisis lows in 2012. Price recovered and then fell away again on the back of the prospects of massive fines and penalties from US Department of Justice for mis-selling bonds between 2005 and 2007. These were agreed at $7.2 billion in January 2017 - so that is fully in the price now.

http://money.cnn.com/2017/01/17/news/economy/deutsche-bank-fine/index.html

It is hard to find a historial price pattern to see if this trade can reach 200% profit. The best I can see is to go from the 2012 lows to the point where the drop happened in early 2014 (left hand blue arrow) and start that from the 2016 lows. That gets the trade to 100% profit. A consolidation then for a few months and another run up will get price past 200% before expiry.

Another way to look at it is we can see that price was above the level of 200% profit less than 2 years ago (before that fine was levied). What I also know is that negative interest rates have been in place since June 2014. These are likely to come off sometime in the next 2 years say. That should give a kicker to net interest margins and improved profitability from mid 2019 for the next 2 years. This feels like a long waiting game and I have to hope that there are no more skeletons in the cupboard. There have been a few. Read this list of travails - http://www.corp-research.org/deutsche-bank

Shorts

Westfield Group (WFD.AX): US/UK Shopping Centres. Australian stock market (ASX) had a big drop on Friday - down 1.5% at one stage and closing down 1.42%. I have been successful over the last few months shorting Westfield - one of the largest shopping centre operators in US and UK but listed on ASX. I have been looking to get back short. On the day Westfield share price was holding up better than the market.

The chart shows that price has been recovering after the last strong drop and seems to have found a resistance level. See TIB82 for the full shopping mall rationale - since that post UK consumer spending numbers have been posting lower.

Cryptocurency

Bitcoin (BTCUSD): Bitcoin price volatility continues. There is a lot of misinformation and uncertainty surrounding the emergence of Bitcoin Cash (BCC) as a possibility. The way the Bitcoin Cash people use the Bitcoin name certainly confuses things. I had set a price target for my most recent half position below previous highs - as the high was a little over $2,800 I set the target below the round numbr at $2,795. Market had a few goes at testing $2,800 and finally touched high enough to close my trade for a $146.61 per contract profit (5.5%) - nice work for one day. In TIB90 I did a bit of a step back review of trading in Bitcoin to May 2017. My Bitcoin trading was appreciably behind buying and holding 10 Bitcoin for the time. In June I changed my strategy.

The table shows the results year to date and for June and July. Net profit is now well over $10,000 most of which has come from the changed strategy. Average profit per trade is more than double because I have been using price targets and not trailing stop losses to exit. If I had bought 10 Bitcoin (the standard contract size ) at the price labelled Start and held to the price labelled End and held them all the time I would have been further ahead year to date but not for June and July. The important part of changing strategy is I have no losing trades in June and July [Note: I do have two open trades - both negative]

The total profits achieved are the equivalent of 4.06 Bitcoin of which 3.85 came in the last 2 months. Happy Days - now a smart investor would take those profits and buy the 4 Bitcoin. I might just do that.

Sunday and Monday trading has seen price pull back. There is talk that BCC will come in at around the $400 mark which means that Bitcoin (BTC) should drop by that amount or more in the shorter term.

It seems to me that the panic is out of the market and we are certainly not seeing a $400 drop - maybe a $150 value for BCC. Of course we will not really know until BCC is out of the price - currently it is in the price. We need to see the fork to know for sure. What I do know there is a fair amount of scared money in the market. I looked at trading a MIND THE GAP trade on my broker (IG Markets) on Sunday evening - and was told I could only close trades. As I have plenty of margin in the account to cover price dropping by half, maybe they were scared of having to pay out for the price jump.

Edit: Forgot to add. My Bitcoin investing program passed a key milestone - 105 days of returns of 0.94% per day to pass 100% return. 31 more days to build the profits. http://mymark.mx/USIBitcoin to join me.

STEEM: I use Payza for some of my payments. I needed to top up the account to fund further payments. They now provide a facility to sell altcoins. I tested this out by selling STEEM at $1.34 per STEEM. Pretty good as I earned all of those from my writing and curating. I had bought STEEM too when the price was around 10 cents.

http://mymark.mx/Payza to explore Payza.com

Currency Trades

Forex Robot did close trades (0.20% return) and is trading at a negative equity level of 4.9% (higher than prior day's 4.7%). You can follow the robot live at http://mymark.mx/LiveUSITech

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

Forex: You can start your own forex robot trading if you have a reasonable amount of capital to start (I recommend $5,000 or more as that gives you more trading pairs and lower negative equity). Software is a one-off lifetime fee of €600. Register at http://mymark.mx/USITech

July 28, 2017