Market View from Costa Rica

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Jaco Beach, Costa Rica

It seems like a lifetime ago since I last posted a blog in February. I’d made a lot of life-changing decisions since the start of the year. I left my amazing job; I travelled to many places; I finished the courses I needed to become a certified equities trader; I moved to Costa Rica where I now live with my spouse; and when I’m not working on my rusty Spanish or chilling on the beach, I’m trading for myself.

My life may seem as volatile as the market these last few months. I don’t view volatility as a bad thing, though. I feel that drastic changes force us to adapt and stay sharp. We should be in a better place by the time we make it to the other side.

I’ve been hearing from friends who are concerned about the market. It’s understandable. The bear market I’d been anticipating came hard and fast. As of yesterday, the Canadian market’s gains of 2018 and 2017 have been wiped out. My answer to my friends has been consistent: You can either get out now or you can hold on — either way, be ready for when the time comes to get back in.

I’m not new to market drops. I started to learn about stock trading in 2008. It was a good time to learn because I saw how bad things can get before they get better again. Each time fear and pessimism took over (in 2011 and 2015/2016), after the market freak-out, I eventually found bargains of some very solid stocks. And I learned from these times which stocks I really wanted to own in my portfolio for the long term. Should there be another 2009, I want to be ready to buy when there’s a recovery. My stock wish list is comparable to my Christmas wish lists as a kid: unrealistic but crazy optimistic that one day, it’ll all be mine!

My current outlook is a lot more short-term and I’m taking less risk by using fewer shares and making fewer trades. Some of my stocks I thought I would own for a long time, but I had to let go and bank on the gains while they were still there for me to take. I find myself sitting out more often on what normally would be great opportunities. Am I always right? Of course not. It’s just not the right market to jump on most opportunities. I feel that my best play is to think defensively and to be more hands-on by watching the prices of my stocks more closely than usual.

The US market is still above its lows from this year. If it takes that out and then eventually 2017’s lows, the move will cause more downward pressure on the Canadian market. To what extent, I’m not sure. I’ll be paying attention to the support levels of previous years.


My Stock Wish List

My wish list consists of mostly American stocks, some Canadian, and some ETFs. It’s likely to change and that’s fine, I have plenty of time to decide. I already own a few of these stocks, but I keep them on my wish list because I want to remember to buy more of their shares later on.

  • ADBE
  • AMZN
  • ADT.A.TO
  • AXP
  • BABA
  • COST
  • DIA
  • DIS
  • DOL.TO
  • FB
  • FDX
  • GOOGL
  • HD
  • JNJ
  • LULU
  • MA
  • MSFT
  • NFLX
  • NKE
  • QQQ
  • SBH
  • SBUX
  • SPY
  • TSLA
  • ULTA
  • V
  • WEED.TO
  • WTW
  • XIC.TO
  • XIU.TO

 

 

The Market Dumps

 

Dailies

The SPY, QQQ, DIA, and XIC ETFs on freestockcharts.com

While some investors have been freaking out, I’ve been casually checking the market and my portfolios. Is this the correction I’d been impatiently waiting for?

Looking at the daily charts of the SPY, the Qs, the Diamonds, and the XIC, you can see a few major things happening here. A big precipitous move often creates another one. Look at the XIC on Monday, Jan 29. It gapped down and just kept going. Something similar happened to the Dow on Tuesday. While there was some defending going on, it still broke its trend on Friday. The SPY and Qs had a huge down day like the others on Friday; however, their uptrends are still intact. It will be interesting to see if there’s a bit of a bounce before these go down even more and break their shorter-term trends.

 

Weeklies

When we pan out and inspect the weekly charts, it’s hard not to notice the glaring red candle on the XIC. Whoa, Canada! In one week, it wiped out all the gains made since mid-October. The other charts only came down past the gains from the last week or two. If this is the start of the move down for the US market, it might be wise to take some profits off your US stocks before they correct even further.

Monthlies

As for me, I’m just hanging onto everything and waiting for my next buying opportunity. In fact, I transferred more cash into my registered accounts so that I’ll be ready when I see a good trade is on.

I’m noticing some beautiful monthly corrections on the weed stocks. You can bet that I will be scaling into these before their next big move. If you have difficulty selecting which weed stocks to buy, then just buy the ETF, HMMJ. You can visit this link to get more information on the fund and its stock holdings. I created a watchlist on freestockcharts.com with all the stocks that are in the HMMJ ETF. I like to cruise through the charts and check out which ones are helping the portfolio or weighing it down.

Stock Picks

selloffs

Market ETFs: SPY, QQQ, DIA, and XIC on freestockcharts.com

The US market is making me nervous as the charts get higher with bigger candles. At some point, it’s gotta sell off, right? I notated on the charts the last months where the most selling happened.

Market cycles can either be four months for the shorter term, or eight to ten months. The SPY and DIA show their last major sell-offs were in March of last year. The Canadian market, on the other hand, looks like it could be halfway through its current move up. It could pause for a bit at the current highs before continuing its move. If the US market pulls back, it’ll be interesting to see how the Canadian market will react.

It’s been a hectic week for me and I’m gearing to go back to work tomorrow. I managed to do a quick search and I found some decent charts to check out:

  • BB.TO
  • PD.TO
  • ACBN.TO (watch for a consolidation setup on the daily chart)
  • ENB.TO

Be sure to check the sector and do your necessary research and take the right amount of risk so that you can feel confident in your trades/investments.


Oh, and happy new year!

 

The Transparent RRSP: Breakout, Breakdown

The week of December 18
  • I bought 35 shares of TPK.V at $6.55 on December 18. It cost $229.25 plus $0.35 in commissions. There is $11.86 in cash left in the RRSP account.
TPK

TPK.V price chart on freestockcharts.com

Last Monday, I put in a limit order to buy 35 shares of TPK.V at $6.55 and it was filled at that price. I was so glad as it went straight up right after…until it did a reversal on Wednesday. It’s now back to my entry price.

I did the above screenshot the day I bought the shares. I commented on the monthly chart that this stock could trade sideways even longer. Sometimes with these bottoming patterns, you’ll find that there are a few false takeoffs before it really takes off. My hope is that it continues to trade sideways for longer, offering even more entry opportunities to add to the position. That way, if and when it does take off, the upward move will have a better chance of being sustained even longer.

The market didn’t budge much this week and I don’t expect it will next week. Trade volume between Christmas and the new year is usually quite low. There might be a bit of selling, but I don’t plan on making any trade decisions within the next week.


Already people are posting with glee that they’re on vacation. I wish you all happy and safe holidays! I hope to catch up again next week when I’ll be in Vancouver. 

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The Transparent RRSP: Vacay

The week of November 27
  • I deposited $150 into the RRSP ahead of December. There is $351.89 cash in the RRSP account.

JP and I are going away for a week to Costa Rica (we’re going to the Pacific side). We decided to only bring our tablet and phones. Neither of us has plans to trade while we’re away. Our main focus is to relax, enjoy the warm weather, check out the real estate situation there, and read and swim at the beach. I might squeeze in some study time whenever I can. Derivatives and options have my brain turned in on itself – to take a week off could mean excruciating reviewing when I return.

The airfare was too hard to turn down: $770 CAD for both our tickets! Yes, we’re travelling at a time when the weather isn’t totally unbearable in Ontario yet. We do, however, plan to go to Florida in late February. That’s usually when the cabin fever is at its most intense and could use a warm disruption. Before I take off, I must, of course, look at the markets.


 

November markets

SPY, QQQ, DIA, XIU ETF charts on freestockcharts.com

 

I don’t know how the market will trade after the US Thanksgiving holiday. December could be positive because of a stronger retail sector around this time. The bearish correction in the fall that I was bracing/hoping for never came. (And that is why we trade the trend, even if we don’t believe it’s still there.)

The trade volume in the US markets seems to be coming down while the prices are going up. The confluence of those two factors often means that: 1) savvy investors start to take profits, and 2) the public starts asking those investors if it’s a good time to buy Apple. The best thing to do is wait for 3) to happen, which is an actual correction.

I was in the Caribbean on my first and last cruise in early 2015 when this happened:

Caribbean

XIC ETF on freestockcharts.com

When JP and I checked our email for the most expensive 10 minutes of our lives, we also checked the markets. At the time, we were only day trading, which meant we were holding no positions in our accounts. Although we weren’t losing money, we figured good opportunities would be short-lived. We were concerned about entering a more hostile trading environment in which small fish like us would get eaten by the bigger, well-funded fish.

After we returned and got our sea legs back, we looked at Canadian companies that traded on both Canadian and US stock exchanges. We discovered they were CHEAP. We bought just a few to hold long term and had a gangbuster year. I doubt the market will do that in the week that we’re gone. Perhaps next January?


I have some stock charts worth checking out:

  • FIRE.V (New and risky, but cheap. Take fewer shares.)
  • IMH.V (Same as above.)
  • TCW.TO
  • SSL.TO (I already have this in my RRSP.)
  • SMF.TO

Please check the company, the sector, the earnings, the market, and the fundamentals that you think are important. Always do your due diligence to trade with confidence while respecting your risk tolerance. I do think that the market could pull back early in the new year. You could wait until then before buying or take fewer shares now and more later.

‘Tis the Season to Spend Wisely

Holiday Shopping 2

Make a shopping list and start early

This is the time of year when the shopping frenzy begins; what follows is the eating and drinking. It’s all a big winter feast, after all! The easiest thing to do is close your eyes and just run with it knowing that in the new year, you can promise to make amends to your suffering bank account and bulging waistline. This frustrating cycle happens each year for so many of us.

I started doing my Christmas shopping about two months ago. Beforehand, I created a rough shopping list. I was able to keep an eye out for when these items went on sale. Seasonal items, like fudge, are typically more abundant and therefore cheaper closer to Christmas. I’m okay with getting these in December. This is a saner and more budget-friendly way to shop. It’s an easier way to monitor spending and not lose sight of financial goals. 

I’m not always this ready and organized. Last year was unusually busy for me. I only managed to do a quarter of my shopping online ahead of the holidays. The rest I bought at Metrotown and Downtown Vancouver the few days leading up to Christmas. For anyone who lives in Greater Vancouver, you know that these shopping areas are already super busy on a slow day. Big crowds mean it takes forever to get anywhere. Buying presents at the last minute left me feeling stressed out and under pressure. I was exhausted and frazzled by the end of it. The part I dreaded most was returning home and having to add up all my receipts. The final total caused me enough grief and gave me the motivation to plan ahead this year.

I know that a lot of people are drawn to the bustle of holiday shopping. The inviting Christmas displays that retailers put up invoke warm fuzzy feelings of generosity and make you want to give to others as well as yourself. A lot of awesome things go on sale at this time. We just have to remember that sales happen all year round. It’s not the only time that we can do our Christmas shopping. Although I handled last year’s Christmas differently than other years, I am aware that I’m prone to making bad, desperate choices if I don’t plan ahead. 

I’ve got some big financial goals that I want to follow through with over the next year. I can’t let overspending in one season delay my long-term goals. I recognize that I typically spend more this time of year, but the important part is that I budgeted for it.


Stock Talk

I keep saying this like a broken record: I find this toppy market quite dodgy to trade in. I usually can tell when my best trading ideas are higher risk, lower odds. I did, however, still look through the market. Here’s a list of stocks with decent charts:

  • UR.TO
  • POT.TO
  • BB.TO (Aggressive entry for a possible swing trade.)
  • CIX.TO
  • G.TO
  • WPM.TO

It looks like the precious metal charts are starting to shape up, although I’m just not interested trading the metals right now. Weed stocks have been getting a lot of recent action. As tempting as it is to jump into these, I would wait until they settle down and consolidate before buying. I’m watching and waiting for these to take shape again, so I’ll keep you all posted on new trade ideas for weed stocks. I might still trade some of the stocks listed above, but I’d take fewer shares and keep my outlook shorter term.

 

 

 

 

The Transparent RRSP: A Beauty Swing Trade

The week of October 30 
  • I deposited $150.00 into the RRSP account. There is 192.17 in cash now.

I’m still waiting for the market to correct, even by just a little on the weekly chart before I do anything. My focus is also elsewhere as I have an exam tomorrow for my Technical Analysis Course. Even though technical analysis is my ‘thing,’ it would be totally humiliating if I didn’t pass. I’m actually studying much more for this exam than I did for my last one. This also means I’m putting in zero effort in looking presentable around the house. JP drew this picture of me this morning:

 

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This is me.

 

If this is how I look right now, JP must really love me for what’s inside!

I haven’t been interested in opening any new positions in the last little while because I’d rather wait until the market has had a correction. For JP, his strategy in trading an extended market is to trade this bullish sentiment with shorter term trades. He took a beauty trade last week worth talking about.

MOGO

MOGO on freestockcharts.com

JP bought shares of MOGO.TO last Thursday. Then on Monday, KABOOM! He sold 2/3rds of his shares. On Tuesday, he sold some more shares. Now he has a small number of shares which he’ll keep in for a longer time period.

The thing is, MOGO has been on JP’s radar for quite some time now. It’s had a number of breakouts (November 2016, January 2017, February, and April). He either missed the breakouts or wasn’t paying close enough attention to during those times.

MOGO had been building a base over the last two months. It had consolidated, trading sideways with the price range tightening up on less volume. In a bullish market, this is a money setup. JP’s patience paid off with a handsome profit made over just a few days. He also bought shares of PUR.TO and DRM.TO. I hope these trades work out too!