Markets continue to lean back to value stocks away from momentum. Yields rise again. Trade action is profits in Swiss insurance deployed into Swiss pharma. Also averaging down in quality cloud computing names.
Portfolio News
Market Flip Flop
US markets trade up on news flow from China on trade.
The rotation into value continues with high multiple stocks sold off in favour of more steady plays but still not strongly into defensives
The "trade of the decade" headline caught my eye. My view is this becomes the trade of the decade only if Trump can pull off the deal of the decade - solve China trade.
Given that the S&P 500 is heavy in bond proxies and secular growth, we would expect higher upside potential in small caps, cyclicals, value, and Emerging Market stocks than the broad S&P 500
Marko Kolanovic, global head of the macro quantitative and derivatives strategy team at J.P. Morgan
I am positioned in quite a few of these sectors though not in US small caps - might just need to revisit that idea - maybe some call spread risk reversals on the sector as a whole.
Treasury markets continue to push yields higher - 20 basis points higher on 10 year in a week = almost one rate cut less wanted.
Markets do have their eye on European Central Bank - Draghi did speak last night but clearly did not say anything - Euribor market did not budge.
Biggest move in my portfolios are JC Penney (JCP) again with a 23% jump but overshadowed by General Moly (GMO) up 24%. Japan also moving ahead with only 1 stock out of the 20 I hold down.
Bought
Twilio Inc (TWLO): Cloud Computing. Averaged down entry price in one portfolio after price had slipped 15% since I bought. Bought a smaller portion than normal - was watching the way the whole Software As A Service sector was being pushed lower (rotation out). Jim Cramer idea based on a view that last guidance pointed to strong revenue and earnings growth and solid customer metrics.
Novartis AG (NOVN.SW): Swiss Pharmaceuticals. Jim Cramer idea based on solid product pipeline and solid last earnings and a particular leaning to an upcoming MS drug. I bought a parcel of stock large enough to allow me to buy a call spread. I have been invested in Novartis before with good success.
Also bought June 2021 92/100 bull call spread for a net premium of SFr2.11 offering maximum profit potential of 279% if price moves 15% from SFr87.31 opening price. I would have preferred to buy closer in-the-money but SFr8 is the only spread available that far out in time. Let's look at the chart which shows the bought call (92), and 100% profit as blue rays and the sold call (100) as a red ray with the expiry date the dotted green line on the right margin.
The bought call (92) is below the recent highs but the maximum profit line will need an all time high. Looking back since 2013, I have noted a few price runs after periods of consolidation. I modelled the earliest one and copied it across to a few other runs. This trade will need a run like that to make the maximum - there are just under 2 years for it to do that.
Note: Novartis does have ADR's listed in US under ticker NVS. I chose to invest via Swiss listing as I had some Swiss Francs and the options market goes out further in time.
Sold
Zurich Insurance (ZURN.SW): Swiss Insurance. Closed out remaining holding for 75% profit since April 2016. This trade precedes the time my wife signed the black book prohibiting her from purchasing shares in Zurich, pending acquisition action (now completed). I remained exposed to Swiss insurance through options on Swiss Re (SREN.SW).
Expiring Options
Eurostoxx 50 Index (ESTX50): Europe Index, Closed out December 2019 strike 4000 call options - not quite 100% loss but close. Trading cost ate 30% of the proceeds. Cannot see price moving 14% in 3 months let alone 30% to make a profit on the trade.
Cryptocurency
Bitcoin (BTCUSD): Price range for the day was $388 (3.8% of the high). Price tests down to support at $9954 again going a little lower but closes back above.
Ethereum (ETHUSD): Price range for the day was $8 (4.4% of the high). Price trades around the $177 level all day also going a little lower - no surprise to see it sitting there as I took the snapshot.
Ripple (XRPUSD): Price range for the day was $0.00891 (3.4% of the high). Price drifts lower staying below that $0.26 level all day. This is either poised to break higher or pushing harder lower to test support at $0.24754
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 4 trades on USDJPY (losing) and AUDNZD (winning) for 1.03% losses for the day. No trades open. I am surprised it took that long for the trader to decide to close the USDJPY trades - they did trade quite a lot worse which tells me the trader closed the trade rather than a stop loss.
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
Bitcoin: Get started with mining Bitcoin for as little as $25 http://mymark.mx/Galaxy
September 11, 2019
Insurance looking good for earnings growth despite the weather activity as rates will surely improve after the season. This should improve margins which were only for the market leaders in the past.
Posted using Partiko iOS
It will pop up on the value screens as I work them again. Currently invested in US insurance via an industry ETF (KIE) and AIG only.