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August 28 Portfolio Update

Well this week was another snooze fest for the portfolio thanks in large part to the trade on the 2 year treasury note that I’ll expand on later. This week I finished up 0.27% while the MSCI world index finished the week up 0.75%. While I don’t really measure performance in comparison to a benchmark on such short time frames such as daily or weekly, I do have to admit that the past 2 weeks of chop for my portfolio and low gains (+0.57% total) have been a bit frustrating it feels much better knowing I outperformed the MSCI world index (-1.82% in that same time frame). The large positive contributors for the past week were my HE short and uranium holdings while the negative contributors were the ARKK puts, RIG and my 2 year UST trade.

I have to admit that it’s hard to figure out where the market is going from here and I don’t really know truthfully. There is no obvious trades to swing at right now and I think that’s ok! It’s perfectly fine to admit you don’t see a clear trade, a clear picture and just sit on your hands, and that’s exactly what I plan on doing until I feel more sure. Previously, I’ve had a much more bearish bias, even almost top ticking the market.

This made for a great trade in ARKK, where I locked in 183% gains total, and while I still maintain a bearish bias, I have to admit it’s not as clear now.

Why am I bearish? When I look at the market for this year I believe most of the action has been a result of liquidity and positioning. With liquidity drying up and positioning extended to the upside I think we’re in a position to dump down, with the overall target being 4200 (200MA).

Now I haven’t fully committed to full bear because my models have yet to confirm a down trend, meaning I’ve taken bearish positions in the stocks that have clearly entered down trends (ARKK for example). We can look at this chart to see the deteriorating market breadth I wonder if we see the 7 mega caps keep the overall market up in a chop fest. This could change and I could increase my short exposure, so be sure to follow me on twitter or join the discord community I am a part of to keep up with all trades.

The only change made to the portfolio was a close of my HE short, which I’ve been very active at trading in and out of, and a stop loss on my 2 year treasury future trade. We can see the reason why we got stopped out is real rates continue to climb. Bonds continue to be a very important key to markets along with FX vol.

Now let’s dive in to notable news for some of the positions.

$U.UN - Some interesting news regarding sanctions came out from Canada, which you can read here. To me this chart has clearly broken out and we are on the verge of some interesting moves higher.

BTU 0.00%↑ - Natural gas, specifically TTF (European natural gas) seems to have put in a bottom recently. We’ll have to see how this combined with increasing activity in China (if that comes to fruition) effects coal prices. Listened to this excellent podcast and was reminded of BTU’s share repurchase program which should eventually pay off.

FXI 0.33%↑ - Over the weekend China announced a set of measures meant to boost the stock market. Kind of ironic given it’s done nothing but clamp down on the market for the past two years but here we are. They very clearly are trying their best to avoid just outright stimulus. We’ll see how this works out for them but the market will at least like these measures and should benefit our calls. It’s funny timing as I was considering adding longer dated calls (January?), I’ll wait for now.

WEAT 0.16%↑ - Brutal weeks for grains as geopolitics and non-US weather continues to get ignored. I still think this is a mistake and continue to hold.

Below is a complete overview of my portfolio along with trades I’ve written about. I’ll likely make some changes in the portfolio in the coming weeks. There won’t be a portfolio update next week as I’ll be traveling later this week. Please feel free to ask me about any positions I hold further.

Thank you so much for reading! If you haven’t done so, please like and subscribe, it really helps with growth! If you’d like to stay more updated on trades or other ideas that might not warrant a full article then follow me on twitter here. Alternatively, I’m a part of a discord that is completely free. It’s just a collection of traders from all different backgrounds that talk about the markets, so come check it out here!

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