Markets drag back some of the losses in a volatile day with volatility also coursing through currency markets. ECB drives volatility in European rates with an ill timed promise of "rabbit out of the hat" stimulus. A quiet trading day for me and a touch of madness.
Portfolio News
Market Selloff
Watched US markets open cautiously higher especially digesting positive Walmart (WMT) results.
The saner heads are separating out market reactions and economic data. Economic data suggests that US GDP numbers and jobs numbers are still robust. They are suggesting that a GDP recession is likely only in 2020 or even early 2021. Meanwhile bond markets are saying recession is here already. Bond investors are caught in a tough place - buy short duration and accelerate the inversion of the curve BUT very few want to buy long duration.
Europe Stimulus
European interest rates collapse following a report from an ECB official that they will be launching a major stimulus package in September.
This sort of pre-release of information does not help in nervous markets especially when it is laced with words like "better to overshoot than undershoot".
Price move was instant on Euriobr rates and the margin call bells were ringing again - triple whammy this week on Bitcoin, corn and Euribor.
https://www.wsj.com/articles/ecb-stimulus-package-may-beat-expectations-official-says-11565876685
Bought
Soybean Futures (SOYB): Price of soybeans tracked down with the collapse of corn futures even though plantings reports showed that acreage for soybeans had reduced. Price also moves on every whiff of news from China trade discussions. Neither of these types of price move are very rational. Added one new contract on a reversal on a 4 hour chart looking for something of a bottom in prices.
Expiring Options
Cisco Systems, Inc. (CSCO): US Network Equipment. With the big collapse in share price (down 8.6% to $46.25) following the soft guidance, I am facing a challenge in my portfolios. I am short strike 50 put options expiring this week. This means that I have to buy the stock at $50 or buy back the put options. My investment thesis is I was happy to buy the stock at $50 - hence the trade. My sense is the market has over-reacted to the guidance and that price could well recover above $50 - just not this week. My plan B trade was to sell September strike 52.5 call options. This is essentially a covered call written at 10% margin to the current price - I will buy the stock.
Cryptocurency
Bitcoin (BTCUSD): Price range for the day was $977 (9.7% of the open). Well that was a whipsaw day with price testing well below support at $9954 and closing near the day's high.
Ethereum (ETHUSD): Price range for the day was $16 (8% of the high). Price followed Bitcoin down to test support at $177 (from the April/May trading range) and closed up about where it opening. This low test bar off a level suggests a move upwards.
Ripple (XRPUSD): Price range for the day was $0.001987 (7% of the high). A quieter day for Ripple with an inside bar touching support and closing near the open.
CryptoBots
Profit Trailer Bot No closed trades
New Trading Bot Trading out using Crypto Prophecy. No closed trades
Currency Trades
Outsourced MAM account Actions to Wealth closed out 8 trades on GBPAUD, GBPJPY, AUDNZD for 0.9% profits for the day. No trades open
Own Trading Account In a moment of madness I opened up my forex trading systems and placed 3 trades. I did use the signals and relied on a fundamentals view - stronger Yen and weaker Pound and stronger Gold price. Lost 3 trades (short GBPJPY, short EURJPY, long XAUUSD) for 1% loss each. Prices spiked on all 3 trades in one 30 minute spell. Lesson 1: All 3 trades were in somewhat over extended territory after big moves. Lesson 2: Rely on the outsourced trader.
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 Wall Street Journal. 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 and crypto prices
August 15, 2019
The more institutions start to get involved in either the direct, the more violent swings will take place. I feel that money managers may just lock in gains and call it a year given the volatility and uncertainty.
Posted using Partiko iOS
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They all come back from holidays about now - the wise old heads will be back at work.
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