TIB: Today I Bought (and Sold) - An Investors Journal #366 - Swiss Insurance, German Banks, Food Services, Altcoins
Even Europe wants to rally despite auto tariff risk. Profit taking in Swiss insurance and Food Services and one covered call on German Banks
Portfolio News
Market Rally
Europe markets continued to rally with no lead from US (on holidays).
This despite rumblings that US could introduce auto tariffs.
The US Commerce Department delivered a report to Donald Trump. While the Trump rhetoric is aimed at China, the biggest casualty of auto tariffs will be Europe. The US auto industry is also expected to cop a bashing with a massive increase in component costs if the 25% tariff is introduced. Donald Trump has 90 days to consider the report.
Sold
Sodexo S.A (SW.PA): Food Services. Fitch re-rated Sodexo to negative - enough for me to hit the exits for 4.8% profit since July 2018. This is part of a progressive process of reducing exposure to Europe. Note: In TIB 261 I did write
What I like is the mix of industry sectors served is somewhat uncorrelated with economic growth (health care and seniors, universities, schools) and certainly tariff free.
What has changed? I did note then that the operating margins were declining. Add in a negative report from Fitch and that bothers me more especially with slowing growth in Europe. I continue holding stock in one of my other portfolios.
Swiss Re Ltd (SREN.VX): Swiss Reinsurance. Sold December 2020 strike 92 call options for 5.8% profit since November 2016. Closing price of SFr 97.18 is well above the strike. I remain exposed to December 2021 92 and 100 strike call options.
A quick update on the charts which shows one of my remaining December 2021 strike 92 trades. Price goes back to 2012 lows. All I have added to the chart is a new pink arrow price scenario.
Price appears to be on a pink arrow scenario though this will require price to make a higher high for the trade to pass breakeven. The patterns are supportive with higher highs and higher lows since 2016. I was not prepared to invest any more in the 100 strike call options.
Zurich Insurance Group AG (ZURN.VX): Swiss Insurance. Sold December 2021 strike 280 call options for 82% blended profit since January/June 2017. Closing price of SFr 320.90 is well above the strike and above the next higher strike. I remain exposed to December 2021 320 strike call options and the stock in this portfolio. I am holding December 2019 strike 280 call options in another portfolio, which are not profitable yet.
A quick look at the charts which shows the two outstanding strikes (280 and 320).
With price now holding onto 320 for the 3rd time, it is time to sell the 280's. It is hard to tell whether the 320's are ever going to be profitable. What I do know is when price gets compressed in a range like this, the break can be dramatic.
Income Trades
US markets closed - will tackle those tonight. I decided to take a different tack on European banking stocks. Normally I choose stocks that are in profit and look to write calls at a 5% price move above current levels (10% for tech stocks). European banking stocks are not doing well and will continue that way while interest rates are negative. I want to stay invested as it is an effective way to run the interest rate trade at low margin. For the most part, the banks are comfortably within the stress test levels for a calamitous sell off (apart from Italy). I am adding a few banks back to covered call writing BUT I will look to write covered calls with a 10% margin. If the market wants to take me out with a move bigger than 10% that is fine by me.
Deutsche Bank AG (DBK.DE): German Bank. Sold March 2019 strike 8.4 calls for 1.16% premium (0.78% to purchase price). Closing price €7.73 (lower than last trade - May 2018). Price needs to move another 8.7% to reach the sold strike (easier than last trade). Should price pass the sold strike I book a 27% capital loss but income to date amounts to 18.9% of purchase cost.
Cryptocurency
Bitcoin (BTCUSD): Price range for the day was $302 (8.4% of the low). I was expecting price to go higher and to slow down at the resistance level at $3774 - it went straight on past and seems keen to test $4000.
Ethereum (ETHUSD): Price range for the day was $17 (13% of the low). The momentum continues with price smashing through the $132 resistance level. Next resistance level is around $160 - do not be surprised to see a pause for breath before price heads that way.
CryptoBots
Profit Trailer Bot One closed trade (2.44% profit) bringing the position on the account to 5.76% profit (was 5.17%) (not accounting for open trades).
Dollar Cost Average (DCA) list drops to 5 coins with EOS sent to PT Defender duties. All coins traded worse on a big day for Ethereum. Robot did spend some time in Sell Only mode.
Pending list moves to 12 coins after fixing QTUM and EOS problems with 1 coin improving, 2 coins trading flat and 9 worse.
PT Defender now defending 12 coins. It did complete one defence trade for EOS thinking it was complete - it was not. I had to fix average price records and add it back.
New Trading Bot Trading out using Crypto Prophecy. No closed trades. Did add a DCA trade on FUEL given a strong bounce from the oversold zone after the selloff. This entry is a little alter than I normally do.
Currency Trades
Outsourced MAM account Actions to Wealth closed out 1 trade for 0.19% profits for the day. 4 trades open on USDCAD, CHFJPY, GBPNZD.
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
Crypto Prophecy provides a useful tool to identify oversold and overbought coins - https://mymark.mx/CryptoProphecy
February 18, 2019
Will be interesting to see how carmakers respond to thos uncertainty as theis cycle of nee car sales have seemed to peak. Given the long cycle of strength they have enjoyed, it would probably hurt to see revenues take a hit due to the potential changes in demand.
Posted using Partiko iOS
Looks like a long cycle of declining demand. Honda announced they are closing UK plant because of the shift to electric vehicles. That could be a saving face way of not mentioning Brexit BUT there is credibility in their statement. Is it time to short autos - pick the laggards in EV development?