TIB: Today I Bought (and Sold) - An Investors Journal #326 - US Banks, US Retail, FANG, Investment Management, Swiss and US Interest Rates
Breathe as tech stocks get some buyers. I join them on that idea. US retail gets my eye after a bounce. Rotating the US banking positions with profits going from leader to a laggard
Portfolio News
Market Selloff
The market took a breather and tried hard to work up some steam.
The last part of the day saw the momentum sag somewhat and the Dow actually closed down for the day. The headlines tell the story of what happened in Australia with the ASX wiping out two years of gain. Lurking behind the news is the faintest hint of softening on China
Peter Navarro will be excluded from the upcoming trade talk meeting at the G20 between Donald Trump and Premier Xi Jinping. This is a sign that the Administration wants to make progress in the meeting - Navarro is strongly anti-China trade.
Europe Muddles
Europe continues on its muddling ways with Italy and Brexit holding headlines
Coming out of left field is a demand from Spain to say that Gibralatar needs to be treated the same way as Northern Ireland. This could be a big stumbling block as Great Britain has steadfastly refused any Spanish claims on the colony for ever. Now Spain cannot block this deal but it gives a convenient excuse for Europe Muddlers to hold up a deal.
Meanwhile, Theresa May looks to have held off a challenge to her leadership for now but is rushing back to Brussels for more talking. The people voted - make a deal and get on with it.
https://www.vox.com/2018/11/21/18102759/brexit-deal-theresa-may-parliament-second-referendum
Pacific Drilling (PACDD): Pacific Drilling emerges from Chapter 11 with a major capital restructuring effectively handing over control of the business to creditors. My 400 shares are consolidated down to 0.04 shares rounded up to 1 share. That rounding up recovers more than 30% of my capital. There is a lesson in here. The trade idea came from my investing coach who identified offshore oil drilling as breakout candidates. What we did not do very well is assess which were likely to go bankrupt. There have been quite a few (Tidewater, Attwood, Hercules Offshore, Pacific Drilling, Gulfmark Offshore). I remain exposed to offshore drillers through Transocean (RIG) and ensco (ESV) and Gulfmark Offshore (GLF - now merged with Tidewater).
Bought
UBS AG FI Enhanced Large Cap Growth ETN (FBGX): Saw the flash from Jim Cramer suggesting today was a good time to buy Amazon and Alphabet.
So I topped up on this Growth ETN which I bought last week as 31% of its holdings overlap with the FAANG stocks which he thought had been oversold. Note: my holdings are really only small nibbles each time - I love low trading cots.
Amazon.com (AMZN): US Retail. In amongst all the gloom, the talking heads are talking about an upbeat holiday season. I added another few shares to my Amazon holdings. Happy Thanksgiving and shop hard folks on Black Friday and Cyber Monday.
Kohls Corporation (KSS): US Retail. I had jumped in an out of Kohls in August (TIB285) and out November (TIB318). I wrote on exit that the exit may have been impatient especially given how well the Amazon venture is going. I resisted the urge to jump back in last week when Jim Cramer added to his holdings. I got the urge today when I was listening to how upbeat the talking heads were about this shopping season. I wrote this in TIB285
There is a lot of consumer power walking US streets right now - no matter what the media tries to tell you.
Now here was the media telling me the consumer has money and will spend. A quick look at the chart shows that my impatient exit was plain luck. I wrote in TIB285 that we knew where the stop loss goes (on the dotted green line).
Well the selloff took price below that line which feels like a good re-entry point if the consumer does indeed spend these holidays. You will not be surprised to note that the reversal is right on a 0.786 Fibonacci retracement. Note: this is a weekly chart
Citigroup (C): US Bank. Jim Cramer suggested adding to Citigroup holdings based on the fact that its Price to Tangible Book Value had dropped back to 1. His view is that credit growth is still solid and their balance sheet is strong enough and does not warrant such a low Price to Book. I rotated out of JP Morgan and invested half the proceeds into Citi. Using Yahoo Finance data, Citi's PB is 0.85 and JP Morgan is 1.55. Close half that gap and there is a big return right there. Let's look at a chart of Citi (C - blue line) compared with the SPDR Banking ETF (KBE - black bars). This is an equal weighted ETF.
Citi has performed in line with the sector but has lagged my other portfolio holdings, Bank of America (BAC - orange line) and JP Morgan (JPM - red line) over the last 18 months. Close half the gap to JP Morgan is a 12% return plus dividend yield of 2.7%
Sold
JP Morgan Chase (JPM): US Bank. Rotation out of one bank into another bank. Booked 195% profit since January 2012.
Pinnacle Investment Management (PIN.AX): Australian Investment Management. Australian stock market was smashed and took out stop loss which was set below prior price floor for 16% loss in 2 days. I wrote up that I was wary of buying into investment management businesses during a selloff. Lesson learned is to go with my gut instinct and ignore the suggestions of the research house. This trade takes the returns well below the cost of the annual subscription. I will not renew when renewal comes up in a few weeks.
Shorts
Euroswiss 3 Month Interest Rate Futures (SZ): Closed 2 short contracts for 4 basis points loss and to release funds for margin purposes. My investing coach always used to say stop doing what is not working. It took some time but I heeded his advice. Swiss rates just do not budge upwards as the Swiss National Bank works hard to reduce the role of Switzerland as a safe haven. I remain convinced that they will have to move but December 2018 futures is too close in time. I did ask the other day which interest rates futures price would make a lower low. Well it seems that price really wants to make a higher high - here is the Euribor chart
Eurodollar 3 Month Interest Rate Futures (GEZ): I did deploy some of the released margin on a short Eurodollar contract based on a reversal on a 4 hour chart. This is not the tidiest reversal trade - maybe too late. The chart shows the entry point and the market deciding that it had reversed enough and retreated from that.
Cryptocurency
Bitcoin (BTCUSD): Price range for the day was $393 (9.3% of the low). Price made an inside bar which could herald the start of a new consolidation zone. The 4 hour chart shows the attempt at the recovery the prior day and a more steady sideways movement over the last few bars
Ethereum (ETHUSD): Price range for the day was $16 (13% of the low). This chart looks a little different with price moving back above the support level. A new high today could see a more progressive consolidation off that support level
CryptoBots
Outsourced Bot No closed trades. (222 closed trades). Problem children now at 19 coins. (>10% down) - ETH (-71%), ZEC (-65%), DASH (-67%), AE (-21%) LTC (-55%), BTS (-63%), ICX (-86%), ADA (-74%), PPT (-84%), DGD (-86%), GAS (-88%), SNT (-65%), STRAT (-79%), NEO (-85%), ETC (-65%), QTUM (-78%), BTG (-72%), XMR (-45%), OMG (-73%).
Coins moved in a tight band of 1 or 2 points, mostly up. GAS (-88%) remains the worst coin. STRAT (-79%) improved a level letting go the 80% down club.
Profit Trailer Bot No closed trades. Somehow the VPS on which the bot runs crashed. I do not know if this is a VPS problem or the bot causing the crashes but there have been a few. In the 5 years I have been running forex bots on a different VPS, I have never had a crash. This crash I suspect the VPS provider. The bot did spend a lot of the day in sell only mode.
Dollar Cost Average (DCA) list remains at 4 coins with BAT the best improver. Maybe it can break off this list.
Pending list remains at 9 coins with 5 coins improving, 3 coins trading flat and 1 worse.
PT Defender continues defending 7 coins. No change - just waiting
New Trading Bot Trading out using Crypto Prophecy. No closed trades.
Currency Trades
Forex Robot did not close any trades and is trading at a negative equity level of 1.9% (higher than prior day's 1.7%).
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 and The Street. 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
November 21, 2018
I have to admit that I have seen a lot of retail activity in these days before the US Black Friday event. I suspected there would be lower traffic in preparation for the event but it was very busy; unlike I had seen in years past. It has gotten me with a different perspective than what I originally thought.
Just what I have been figuring. Looking forward to see what the data tells us next week. Just got to hope the cold weather is not too severe in the North East. Have a restful time