TIB: Today I Bought (and Sold) - An Investors Journal #268 - Building Materials, Corn, Oil Piplelines, US Banks, Altcoins (XLM), US Retail.
Stellar (XLM) becomes first approved Sharia coin. Markets like earnings. Profit taking in banks and oil and US retail. Doubling up in corn as price reverses. Uranium lands up in the tariff crosshairs.
Portfolio News
Market Jitters - Tariff Tantrum Markets are focused on earnings and moved ahead mostly.
There are mixed signals from the markets with US up and Toronto down especially on the back of more tariffs talk from the US and Donald Trump. Cars and uranium are in the crosshairs now. I did write about the flip flop and public opinion - CNBC are onto my theme too.
The uranium call is challenging. Where did that come from?
U.S. uranium producers Energy Fuels Inc. and Ur-Energy Inc. filed a petition in January asking the Commerce Department to investigate the matter under Section 232 of the 1962 Trade Expansion Act
Yes, it is easy to see the national security vulnerability especially as 90% of US uranium demand is imported. Yes, US uranium production has dropped by about 40% in the last 5 years. No, it is hard to see how a tariff will create a bunch of jobs quickly given the complete imbalance in uranium supply from the US compared to demand. Add on top of that the time it takes to get a uranium facility up to production given the heavy regulation there is. No, it does not make sense to saddle an already struggling nuclear power industry with rising uranium costs.
My uranium investments are spread geographically - maybe one of them will win an exemption. The Global X Uranium ETF (URA) has a mix of investments in mining, enrichment and nuclear power equipment. Its geographic mix is 50% Canada and only 6% USA. A tariff targeting Canadian producers would not be good news for my holdings (which are under water anyway).
Oil prices are confusing day to day is the best way to call it. My read is the shrinking gasoline inventories in driving season will be the key factor. WTI price did tick up a little on that news.
Bought
ETFS Corn ETC (CORN.L): US Corn Futures. I have been watching the price of Corn collapse since my first purchase. I have been patiently waiting for a reversal to average down my entry price a second time. I doubled my position. The daily chart shows the reversal.
What I like is that the market has been signalling the change in momentum with MACD (the lower window) showing divergence with level lows while price has shown lower lows.
See TIB 245 for the discussion on Corn which is predicated on expected growth in demand for corn from China. With trade wars going on, this may seem a strange purchase. China has mandated increased use of ethanol in advance of their electric vehicle strategy playing out. That corn will come from somewhere even if not from US. US corn will be channeled to where China eventually buys from - probably Australia.
All we need now is a safe growing season this summer in US. Forecasts are for reduced stock levels by season end and reduced production in Russia and Canada = good for prices.
http://www.farmfutures.com/crop-report/futures-gain-after-usda-report
Sold
Gascogne SA :(ALBI.PA): French Building Materials. Gascogne are running a renounceable rights issue to raise capital. I sold my rights as I do not wish to increase my holdings. That feels like free money and reduces my entry price by €0.24 per share
Enable Midstream Partners, LP (ENBL): US Oil Pipelines. 26% profit since May 2018. This stock was bought to gain access to US midstream oil. Consistent with what I have been doing to reduce company specific risk in the oil sector, the proceeds will go to NYSE Boone Pickens Energy ETF (BOON) or possibly to an alternate energy play. See TIB219 for the midstream oil rationale.
Bank of America Corporation (BAC): US Money Centre Bank. Sold one third of my holding in one portfolio for 212% profit since November 2012. I wrote in TIB266 that I did not think it was time to be going short the banks. Earnings reports from Bank of America and Morgan Stanley (MS) and Fifth Third Bancorp (FITB) have confirmed that. I decided to trim my exposure - I will not be going short just yet.
SPDR S&P Retail ETF (XRT): US Retail. 23% profit since July 2017 - nice return for a year's work. I wrote about this trade in TIB113.
You will think I am crazy buying into US Retail especially after I wrote about it relative to Walmart and Amazon in TIB82 and TIB98.
The trade was a contrarian trade at a time when analysts were talking up the decline of high street retail in US. They were wrong. I retain exposure in my other portfolios.
Expiring Options
Keycorp (KEY): US Regional Bank. I have a short term strike 20 call option trade which is just in-the-money. With the good bank reports its price inched up in the day to close at $20.60. I will be watching this closely as markets open on Friday
Cryptocurency
Bitcoin (BTCUSD): Price range for the day was $360 (4.9% of the low). Price held its line after passing through the resistance level (the solid green line). An important part of Jay Powell's (Federal Reserve Chairman) testimony in Congress was that he felt that cryptocurrency was such a small percentage of total assets that regulating them was low on the list of priorities.
Ethereum (ETHUSD): Price range for the day was $46 (8.9% of the high), Ethereum had a different sort of day with price crossing the resistance line (green dotted line) and falling back and closing on the one below (red dotted line). The key is price did make a higher high and did not make a lower low though it does look like what are called "train tracks"
CryptoBots
Outsourced Bot No closed trades. (213 closed trades). Problem children went back to 18 coins with BTS (-11%) rejoining the list. (>10% down) - ETH, ZEC (-47%), DASH (-54%), LTC, BTS, ICX (-55%), ADA (-40%), PPT (-62%), DGD (-57%), GAS (-66%), SNT, STRAT (-53%), NEO (-60%), ETC, QTUM (-56%), BTG (-62%), XMR, OMG.
Quite a few coins dropped 2 or 3 points. The money seems to have focused in on very few coins in the rally, mostly BTC and XLM.
Profit Trailer Bot Ten closed trades (1.29% profit) bringing the position on the account to 0.61% profit (was 0.41%) (not accounting for open trades). I added XLM to the whitelist directly after it exited the pending list. It was encouraging to see it make 5 winning trades on its return.
Dollar Cost Average (DCA) list increased to 2 coins with POWR joining ETC. Both are at one level of DCA - I only allow one level at -3.25%.
Pending list reduced from 12 coins to 11 with XLM hitting its breakeven sell order. Of the 11 remaining, 5 coins improving, 2 coins trading flat and 4 worse. Two coins (BTG and KNC) improved strongly though they have a long way to go.
Time to review some charts. Firstly POWR looks like it may now be getting its dump after the pump. Or maybe it is simply profit taking volume.
Stellar (XLM) also bounced on huge volume and the initial suspect is always pump and dump.
I did see a news flash that Stellar was named by the Shariyah Review Board (SRB) as a Sharia-compliant network for Payments and Asset Tokenization.
This is an important development as Sharia law prohibits riba, or usury, defined as interest paid on all loans of money. Interest is a feature of most fiat currencies, though not necessarily of payments.
https://en.wikipedia.org/wiki/Islamic_banking_and_finance
Add to this indications that Coinbase are exploring whether to add XLM to their platform (amongst others).
New Trading Bot Positions dropped 2 points to -50.2% (was -48.1%).
BTC traded flat and the other 3 coins all dropped 3 points. The market preferred BTC was the clear message for the day.
Currency Trades
Forex Robot did not close any trades and is trading at a negative equity level of 3.17% (lower higher than prior day's 3.2%).
Outsourced MAM account Actions to Wealth closed out one trade for 0.15% 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. Uranium supply image is credited below the image. 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: With Bitcoin price rising above $7000, economics of mining are improving. Get started with mining Bitcoin for as little as $25 http://mymark.mx/Galaxy
July 18, 2018
thank you, very useful for traders :)
Congratulations sir .. very interesting Post... upvoted sir..
Thanks
Most welcome sir..
Great contrarian call on the retail sector as they are now in the spotlight again as the majority of growth in sales are concentrated on a select few while overall industry trends are down. I feel that this will have an impact to certain commercial property REITs in the sector.
Thanks. I agree. With, say, 18 months of economic growth to go there are still cherry picking opportunities in retail.
The challenging part of commercial REIT's is that the obvious names that are big in shopping malls had already been smacked (last time I looked) (Simon and GGP). The sector has changed quite a bit with Brookfield buying GGP and Westfield selling to Rodamco.
Maybe the 3 in this article could be good candidates. The other thingI look for is long-dated options (Jan 2020). Many have poor option markets.
https://www.forbes.com/sites/bradthomas/2018/05/07/3-mall-reits-that-provide-lasting-differentiation
I would welcome ideas as you come across them.
I feel your idea is very brilliant, a very interesting investment to read, hopefully you can provide information like this at any time. @carrinm