TIB: Today I Bought (and Sold) - An Investors Journal #285 - US Retail, Europe Interest Rates, US Interest rates, Copper Mining, Covered Calls

Markets reach for new highs. Trump fortress under attack after hours. US Retail is diverging. Bitcoin bounds in a one minute spike.

Portfolio News

Market Jitters The day's session was all but jitters

A strong showing in Europe and solid earnings season gave the US market strength and courage to make a recod intra-day high. Jitters returned after hours with the guilty verdict handed down in the Paul Manafort case and more importantly a guilty plea by Michael Cohen for breaking campaign funding laws on the instructions of an "unnamed candidate". The lawyer speak was rivetting (if that is ever possible) pointing fingers without naming names. The talking heads said this will pass - well until it affects the mid-term election.

Interest rate markets are doing the flip flop.

Read the headlines and in one the talk is about the 10 year dropping and in the other about the curve being the flattest in 11 years. Challenging times - only one is right. I did listen to one interview which suggested that recessions on average arrive 18 months after curve inversion and 3 months after the stock market peaks. Note: curve inversion is not a leading indicator - it just describes what is happening. That gives 15 months, he said - which is pretty well what I have had in my head.

In the Australian market. the Prime Minister survived a leadership challenge and a no confidence vote in Parliament. The ASX dropped close to 1% - helped along by a result from BHP (BHP.AX) that the market did not like.

Bought

OZ Minerals Limited (OZL.AX): Australian Copper. Signal from research house. OZ Minerals presented good results which disappointed the market a few days ago. They showed it. Price has since recovered somewhat and made a clear reversal.

Risk in the trade is a declining copper price and the chart does look like it may have turned over to confirm the downtrend. At the back of my head is information that says the world is facing a supply challenge - anyone that can step up production will be able to benefit. I am not alone - here is a Bloomberg article from just 6 days ago.

https://finance.yahoo.com/m/865c6427-a85a-3b13-9bc8-768acdb0cb18/copper-outlook-still-strong.html

Kohl's Corporation (KSS): US Retail. US Retail has been the surprise party for 2018 thus far. There are two clear camps - those that are making the transition to the digital age (like Walmart and Nordstrom) and those that are not (like JC Penney). Kohl's have made big strides in their joint venture with Amazon - they get it and it showed in their results. For the analysts though they did not show enough and price was pushed down in pre-markets. I bought a small parcel before the market open. Jim Cramer was saying "just buy it". I signed up for his base level service on a 14 day trial - we shall see what wins.

The chart shows what he was talking about. Price has broken up and been tracking along well. Any pull back and retest is normal and a good entry. One of the talking heads said yesterday, he was keen on this because he knows exactly where to put the stop loss - behind the green line. The good news for my pre-market trade is I got the "fear sellers" at $76.40 and grabbed the market momentum to $80 - for free.

One more chart to illustrate that Kohl's do get it - look at the close to 100% points gap to the retail sector (XRT - orange line) opened up in 12 months.

Shorts

Eurodollar 3 Month Interest Rate Futures (GEZ): US Interest Rates. I have been watching interest rates edge down and waiting for reversal. All I hear from US markets is strong growth (Jay Powell likes that word). That has to push rates higher. With a slight recovery in Bitcoin price, I had margin in my IG Markets account. I added another short contract (just 1 small contract)

Euribor 3 Month Interest Rate Futures (GEZ): Europe rates have also been drifting lower. I have watched the chart reach a level and hold it (lower than the previous highs). As soon as price pushed below the range I added another short contract. These futures expire in December 2020 - rates have simply got to be higher than 0.25% by then.

Income Trades

3 new trades taken up overnight. The BAC and JPM trades are new entrants in one portfolio as I widen my call writing across all my portfolios. Key column is the % to close one - a little lower than I like for these 3 but still averaging close to 1% for the month.

I also added another Commerzbank (CBK.DE) trade in my core pension account. I had been holding back on writing fully as price has slid below one of my entry points for half my holding. However, I have been writing covered calls on Commerzbank for several months and have now reduced my entry point through income trades by 42% - nice work on a stock that has been going nowhere. This is the art of covered call writing - find stocks that are going sideways or down a little.

Cryptocurency

Bitcoin (BTCUSD): Price range for the day was $267 (4.1% of the high). Price made more train tracks and closed just above the resistance line.

It is the move after that that has accelerated ahead in front of my eyes as I was reviewing yesterday's trade action.

This has to be news driven - maybe a leak about the SEC decision. I was on Binance - website became very, very slow and unresponsive. One news possibility was the timing of the move happened when Bitmex took its servers down for planned maintenance. The website is operating but not allowing trading.

https://www.ccn.com/newsflash-bitcoin-price-spikes-near-6900-as-bitmex-goes-offline/

Ethereum (ETHUSD): Price range for the day was $17 (5.9% of the high). Price made another inside bar on a quiet day.

Price too has jumped ahead nicely off the support line on whatever news was driving Bitcoin.

With Bitmex trading coming back online, one of my ETH contracts closed out for $40.5 per contract profit (14.4%). The 15 minute chart shows what happened - a spike. This is what the SEC does not like. In regulated markets these sorts of trades cannot happen and get reversed out.

CryptoBots

Outsourced Bot No closed trades. (213 closed trades). Problem children stayed at 18 coins. (>10% down) - ETH (-58%), ZEC (-61%), DASH (-71%), LTC (-48%), BTS (-49%), ICX (-79%), ADA (-64%), PPT (-70%), DGD (-74%), GAS (-84%), SNT (-57%), STRAT (-74%), NEO (-80%), ETC (-45%), QTUM (-75%), BTG (-74%), XMR (-46%), OMG (-64%).

A mixed day with coins moving in tight ranges 1 or 2 points either way. DASH (-71%) and NEO (-80%) dropped to next level. GAS (-84%) remains the worst.

Profit Trailer Bot Two closed trades (1.55% profit) bringing the position on the account to 1.39% profit (was 1.38%) (not accounting for open trades).

Dollar Cost Average (DCA) list dropped back to one coin with XRP and BAT closing out profitable trades and EOS dropping below 2% cutoff. ZRX traded flat.

Pending list remains at 13 coins with 8 coins improving, 4 coins trading flat and 1 worse. Best move of the day was KNC up 5 points.

PT Defender continues working on 4 coins with first EOS trade waiting to close out.

New Trading Bot Trading out using Crypto Prophecy. I made 2 news trades during the day on ADA and ZEC. The lucky trade was the long on RDNBTC from the day before which enjoyed the benefits of a pump and dump to drag it past its two take profit targets.

The other trades were based on a signal of extreme price drops from Crypto Prophecy and price moving below the one hour Bollinger Band on my crypto screener. Chart for ZEC shows a willingness to trade from bottom to top of the bands without trading along the bands

The ADA trade is a little different as it wanted to trade along the lower band before bouncing - I waited for the entry.

For exits, I am taking half off at 1.013% profit (same as my PT bot) and the other at the half way mark for the bands.

Currency Trades

Forex Robot did not close any trades and is trading at a negative equity level of 7.3% (lower than prior day's 8.2%). A weaker US Dollar helped.

Outsourced MAM account Actions to Wealth closed out 1 trade for 0.07% 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 and CCN.com. 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

August 21, 2018