TIB: Today I Bought (and Sold) - An Investors Journal #229 - eSports, Fast Food, US Regional Banks, Interest Rates, Electricity

Market mood turned positive with good US retail sales. Did the research on regional banks and stayed with FITB. Tencent surprises - good for my eSports addition. Climbing the staircase of French Electricity. Bitcoin may just shrug off the Brainard blues

Portfolio News

US Retail Sales Retail sales data was published in USA with April showing a modest 0.3% gain following a big month in March. With two solid months of sales, a mood of optimism crept into the markets.

https://www.marketwatch.com/story/us-retail-sales-post-second-straight-gain-2018-05-15

Macys (M) also published its earnings which surprised the markets and pushed shares up 10% in one session.

Coming out of a strong holiday season, Macy's is reaping the benefits of healthy consumer spending

https://www.cnbc.com/2018/05/16/macys-earnings-q1-2018.html

Bought

ENGIE SA (ENGI.PA): French Utility. Price has been holding above €14 for a while - I added another December 2020 strike 16 call option to the staircase of options. I will sell the strike 14 calls when price holds above the next rung (i.e., 16). See TIB216 and 218 for the rationale on Engie.

eSports Mogul Asia Pacific Limited (ESH.AX): Asia Pacific eSports. When I bought the first small parcel of ESH, I chased the price to get filled ($0.022). I did put in a pending order at $0.02. That order was filled as the Australian market pulled back in a few areas yesterday. I will put in another pending order at 1.8 cents for the last tranche.

In the discussion on eSports, I did talk about Tencent (0700.HK), the Chinese Internet giant.

They announced amazing results yesterday which propelled markets forward. I am invested indirectly in Tencent via the Guggenheim China Technology ETF (CQQQ) which has risen about 10% in the last month.

Fifth Third Bancorp (FITB): US Regional Bank. I did a complete review of US Regional Banks overnight to identify candidates with a modest price to book valuation (under 1 and then 2) and which had made a recent new highs (i.e., showing a willingness to break up). Seven names came up on the list (FIBK, PACW, UBSH, FITB, BBT, BXS, IBOC). Only Fifth Third Bancorp (FITB) and BB&T Corporation (BBT) offer options for January 2020 - all the others are for 2018 expiries. I reviewed the options chains for these two and chose FITB as it was offering a net premium on a bull call spread of $10 around the $3 mark. BBT was $3.50.

I added a January 2020 35/45 bull call spread for a net premium of $2.98. [Means: Bought strike 35 call options and sold strike 45 call options with the same expiry]. This offers maximum profit potential of 235% if price reaches the sold strike (45) at or before expiry. How does it look on the charts?

The chart is a challenge. It goes all the way back to 2008 before the GFC. Price has to pass that high to make maximum profit. The 2008 high was not the all time high - that was some time before. This trade looks like one trade too far and it will need the talk of 4 rate hikes in 2018 to be true. The rise in US Treasury yields is telling me that there is a chance that there could well be 4 rate hikes.

Shorts

Euribor 3 Month Interest Rate Futures (IZ9): When I was travelling I bought a March 2019 put option at a 100.125 strike. Well I thought I did. In fact finger trouble bought me a Call option. After many weeks of mostly going up, Euribor prices started to drift down. I bit the bullet and closed the offending trade for a 4.5 basis points lost. A mistake costing more than the price of a dinner out.

I did notice that during the day's trading price popped back up. I could have got out of the trade in live trading at a slightly higher price. I did not want to run the risk of a spike down.

Domino's Pizza Enterprises Limited (DMP.AX): Australian Fast Food. This short trade hit its stop loss on market open for a 15% loss since March 2018. This was a research house idea which never did go short - it just bobbed around above the entry price for week after week. Lesson learned when trading CFD's: if the trade does not make its move within 4 weeks cut and run and stop paying CFD financing costs.

On that subject, I am holding a long position on MacMahon Holdings (MAH.AX) using CFD's. It was doing the right thing but has since dropped back to loss status.

Eurodollar 3 Month Interest Rate Futures (GEZ): I showed yesterday how price spiked down to take out one of my profit targets. It was not a spike. It was a pressage of what was coming the next day with price moving firmly down again through my target (the blue line).

I have moved the take profit target on the December 2018 short I have another 5 basis points lower (to 99.25). It might be time to consider using a trailing stop loss strategy to see if I can eke out maximum profits from these trades. I do not have take profit targets on 2019 futures

Cryptocurency

Bitcoin (BTCUSD): Price range for the day was $405 (4.8% of the high).

Price remains in "no mans land". At least it did show signs of rejecting the lows wth a long tailed bar (ringed)

CryptoBots

Outsourced Bot Three closed trades on this account - 2 on ZEC (4.49% and 2.49% on trades placed on the day) and PPT (2.43%). Problem children was reduced by one with TRX dropping below the 10% threshold (>10% down) - (13 coins) - ETH, ZEC, DASH, ADA, PPT, DGD, GAS (-42%), STRAT, NEO (-44%), ETC (-40%), QTUM, BTG, XMR.

There remain a few trades that are worse than 40% down with ETC joining that erstwhile band. NEO remains the worst.

I did allocate a bit more capital to some of the robots which seemed to unlock them. Each robot holds 3 positions but seems to get stuck some times on fewer.

Profit Trailer Bot The bot did not close any trades. The Dollar Cost Average (DCA) list stayed at 12 with only 2 coins (EOS, BTG) trading flat.

The list looks quite sick. This is the challenge of using trading bots. When the sick list is long, it is not smart opening up trading new new trades even if they can make profits.

New Trading Bot Positions improved slightly to -29.0% (was -29.2%).

With the fall in BTC price during the day, this list looked quite a lot worse.

All coins traded better on the day

Currency Trades

Forex Robot closed 2 trades (0.08% profit) and is trading at a negative equity level of 22.1% (higher than prior day's 20.6%).

Outsourced MAM account Actions to Wealth closed out 1 trades for 0.01% 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. 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 16, 2018