Saturday, April 29, 2017

The Spirit of this Blog

I just want to remind you what you already know: success in stock trading will depend on how well we interpret the different scenarios that are foreseen for the next days, or weeks, and choose the ideal stocks according to them. The intention, or spirit of this blog, is to help in that purpose, giving the guidelines. So, if you look for the typical investment blog with predictions based on feelings (in other words, simply gambling), or 'infallible' purchase data based on a single isolated indicator with no fundamental analysis, or with a lot of different penny stocks each day, this blog is definitely NOT your place ...

'Greed and Fear', maintains its usual minimalist structure:
1. Briefly comment on the current news of the company (or commodity or sector), reviewing its environment, using as tool the fundamental and technical analysis, that my years in trading have shown me that necessarily go together for be profitable. 
2. Then present (shaded in yellow) the main idea or suggestion for the case.
3. Finally mentioned or recommend (in red) the stocks (or ETF) to be followed, and eventually suggested its purchase.

Investigating more, and eventually doing trades with them is now your responsibility, dear readers.

Finally, you can meet me at Linkedin and follow on Twitter or  StockTwits and comment from those pages, much more agile and immediate, requirements that every trader is looking for.

Blogs and sites that offer many winning trades abound. They based on an isolated indicator or in unfounded feelings. I usually distrust them: the stock market does not work like that.
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Thursday, April 20, 2017

Bitcoins and Cryptocurrencies: Introduction

One of the most requested assets today in investment portfolios and by retail traders are cryptocurrencies, such as Bitcoin, Litecoin or Ethereum, digital currencies that use blockchains (which act as a notary public) for the storage of the data of your financial transactions. I include myself among the many traders who underestimated this digital currency, because he did not understand its concept and distrusted that there is no Central Bank behind it, apart from its dark origins and its exposure to cyber attacks. Today they are the "fashion" currency: everyone wants to have bitcoins because of the accelerated price increase they have had since last year.

But, why should the bitcoin interest us, and how can it affect my future? I think that every trader, if he has an interest in the subject, should 'lose' 30 minutes of his life in watching the following video 'The Blockchain and Us' by Manuel Stagars, very illustrative on the subject. It does not deal with the complex technical explanation of its operability (that little or nothing interests us) but of its perspectives as a digital means of exchange and, finally, of life, in future societies. Here is his introduction.

In 2008, Satoshi Nakamoto invented bitcoin and the blockchain. For the first time in history, his invention made it possible to send money around the globe without banks, governments or any other intermediaries. The concept of the blockchain isn’t very intuitive. But still, many people believe it is a game changer. 

Economist and filmmaker Manuel Stagars portrays this exciting technology in interviews with software developers, cryptologists, researchers, entrepreneurs, consultants, VCs, authors, politicians, and futurists from the United States, Canada, Switzerland, the UK, and Australia.

The Blockchain and Us is no explainer video of the technology. It gives a view on the topic, makes it accessible and starts a conversation about its potential wider implications in a non-technical way. The film deliberately poses more questions than it answers. 

There are already futures in the currency market: there are pairs that operate the bitcoin with the dollar $BTCUSD, being, in my opinion, still reserved for knowledgeable traders of those markets, because to all the risks involved in the Forex, we must add the high bitcoin volatility. On the other hand, bitcoin has the advantage of being a currency without nationality, and therefore free of the geopolitical and economic swings of a country. As in any investment there are pros and cons ...

If, like my case, we do not operate with futures, there is the alternative of online exchange houses that allow their acquisition as any other currency, in exchange for a fee per transaction. The market governs the exchange rate. In Peru, some regional companies such as Ripio and Surbtc operate. What makes bitcoin attractive this 2017 is its price, look at its chart, today it is trading at $2,760.

In fact this wild growth brings its risks because we know that the stock market always corrects exaggerated increases like this, even more so when you do not know with certainty the real value of this young currency. Moreover, the idea of 'bubble' round strong on Wall Street for its resemblance to past cases. Here an opinion, in the eventuality of an upcoming crash of this cryptocurrency.

And since bitcoin is not the only circulating cryptocurrency (the ethereum, litecoin or dogecoin, they all have their own particularities and protocols), this variety and competition between them is what makes this new market even more interesting. Even at a governmental level, also Putin showed interest in the ethereum, of Russian origin, and its implementation there could raise its price. For the moment, I recommend caution in this new financial sector, and always remember this word: bubble.

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Monday, April 3, 2017

The attractive sector Biotechnology IBB, XBI

The biotechnology sector is becoming one of the most popular for trading on the NYSE, due to its attractive returns. Its index is the Nasdaq NBI and the main etf that follow it is the iShares Biotechnology Fund IBB and the S&P Biotech etf XBI. To follow at triple speed  in bull mode the Direxion Biotech LABU, is very often followed by traders who do not fear a volatility of 70%.

The first focuses on Big Market Caps as Amgen AMGN, Gilead GILD and Celgene CELG, the monsters of the sector, while the second covers more Small Market Cap, smaller biotech companies, which makes the etf more sensitive to volatility . The same both greatly outperform SPX in the last 6 years, as seen in the following graph.

As you can see, both etf had a spectacular rise between 2012 and mid-2015, where the mandatory correction came to a support from where, a year ago, comes in a lateral movement. Today they are at an interesting moment after months of uncertainty after the victory of Trump and his silence on the idea of controlling prices and patents of this sector and the pharmacist.

Technically the IBB index is testing its resistance to $303.30, forming a double top, so it is suggested to follow it these days to see if it expires. If it succeeds, it will generate a powerful breakout, since its MACD shows a bull trend, and if it does not overcome this resistance it will become a false breakout more, for oblivion. Ideal would also be to leave the overbought area in which it is located. On my radar.

The Biotech sector is above its 3 SMA averages (in sky blue) and bordering the upper 
Bohlinger (purple). Ideally, enter your 'value zone' (blue lines) for a more accurate trade.
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