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!

 

Travel Costs

 

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Playa Beisanz

 

Total Cost of the Best Trip Ever: $2400


Total Airfare for Two: $770

This covered two roundtrip tickets with Copa Airlines from November 28 – December 5. We booked through Canadian Fares online. I know that this was likely cheaper because the dates fell before peak season.

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Meal on Copa Airlines

Copa Air was impressive – flying with them took me back to how things were before food and alcohol became additional. We were shocked when they came out with the drinks – including alcohol – near the start and end of the flight. I got so nostalgic that I just went for the guava juice – something I hadn’t had since I was a kid. Then came the meals! I had to pinch myself. I haven’t eaten anything on a flight without whipping out my credit card in years.

Another plus side when booking with Copa: When you leave Costa Rica, you apparently have to pay a departure tax of $29 USD. This fee was included in the airfare. There are a few airlines that will automatically include this fee in the price and Copa is one of them. Otherwise, if you don’t have US cash or the Costa Rican equivalent to pay at the airport, you pay this tax at the booth by a cash advance on your credit card. Oh, and we didn’t have to pay for our checked baggage.

The only downside to this airline was having Barry Manilow’s song, “Copacabana,” earworm its way into my head for the entire flight going there and back.


Park ‘n’ Fly: $185

Our flight was at 8 AM. It made the most sense for us to stay at a hotel where we could park our car for eight days while we were away. With such an early departure and late arrival, I appreciated being shuttled to and from the airport. We usually book our park ‘n’ fly using points, but this was more of a last minute booking and we couldn’t swing it this time around.


Manulife Travel Insurance: $48

This covered the two of us. Neither of us is covered by any insurance plans at work, many of which also includes basic travel insurance.

There were times in the past when I thought travel insurance was a waste of money…until the one time I needed it and it was totally worth it. The insurance covered all the costly medical bills for this one unexpected incident.


Total cost of Airbnb: $327

We went on this trip for three reasons: 1) We always wanted to go to Costa Rica, 2) We wanted to have a warm getaway, and 3) JP and I are considering buying property somewhere nice and warm.

We decided to check out a place that was easy enough to get to near a lot of beaches. That way, if we bought a property that was accessible and attractive to many tourists, it would be easy to rent out on Airbnb. We settled for the town of Herradura, which is near the locals hangout, Herradura Beach, the bachelor party capital, Jaco Beach, and the surfer-covered Hermosa Beach. We booked a house through AirBnB which was a quick drive from all those places.

It was our first time booking anything through Airbnb. What an experience! We made friends with the neighbours and had them over on most nights where we shared food and drinks. They even took us on a hike through a river to these local waterfalls. They showed us around some resorts, beaches, bars, etc. I’m sure that’s not what usually happens with Airbnb and that this was more of a unique opportunity to make new friends.


Car rental: $258

We booked through Dollar in Costa Rica ahead of time, snatching the best online deal we could find. There are a number of car rental desks at the airport where they shuttle you to their actual locations off-site, as there is no spot for them at the San Jose airport.

We got a basic car with basic insurance. They tried to pressure JP into getting the premium insurance plan, but he wouldn’t budge. The guy became a bit of a prick after we said no! Apparently, all the cars in Costa Rica are standard. (Really?) The driving there is more aggressive in that there is no room for hesitation. JP really liked driving there!


Duty-Free Booze: $98

20171209_1330461036299762.jpgOn the way to Costa Rica, our stopover was at the Panama Airport. The next time we head to this area, we are definitely going to Panama! Well, we were drawn to all the duty-free stores glowing with enormous bottles of rum and tequila. We didn’t know how hard/easy it would be to find alcohol in CR when we arrived in the evening. We shopped around and bought a bottle of rum ($17 USD) and one of tequila ($24 USD) equal to $53.76 CAD. On the way back to Canada, we bought two big bottles of rum ($34 USD = $44.35 CAD). We just knew we couldn’t find bottles of this size and price back home. We paid with credit card both times.


Cash for food, gas, etc: $588 = ₡240,000

We read that most places only took cash. Credit cards could be used at more expensive places and you could still be charged extra transaction fees for using it. We figured to bring about $600 worth of CR Colones. We ordered the currency from our bank. The exchange rate with them was much better than at an exchange house. We just had to wait almost a week for the money to arrive (which came the day before we left!).

On our way to our accommodation, we stopped over at some food stands and stores to load up with enough chow to tide us over the next few days. We bought tropical fruits, tomatoes, beans, nuts, and rice. We nearly fell over after we figured that the few bags we purchased amounted to $80. The food prices in Costa Rica rival Japan’s. I mean, I have never tasted more exquisite avocados and pineapples, but come on! However, alcohol is much less expensive there. On most days we ate a lot of fruit and made our own meals. The place we stayed at had a great kitchen where JP whipped up the best dishes.

We allowed ourselves a couple of extravagant days when we bought day passes to hang out at a nearby resort which gave us access to the poolside bar/restaurant and beach. A pass cost us $30 USD each.

After a week in Costa Rica, we blew through most of our cash. We had enough to refill the gas tank before returning the car to the rental agency. With all the driving we did, including a day trip to Manuel Antonio in the south, we used only one tank of gas. Filling it up cost around $45 CAD. We gave the remainder of our colones to the shuttle driver who took us to the airport.


Roaming: $96

We paid $10 a day for data. We needed to navigate a lot on Google maps. Fun fact: They don’t use addresses in Costa Rica! Everyone uses landmarks. There were a couple of days when we didn’t need data, but I forgot to put my phone on airplane mode before midnight.  Before leaving, I also had to make a phone call from Canada to the caretaker of the house to arrange for the key exchange.


If you added the food we bought at the airport while waiting to depart in Canada, Panama, and Costa Rica, it comes to another $25 CAD. All told that is about $2400 or $1200 per person. Not bad for one of the most incredible trips I have ever taken. We went to four different beaches, witnessed the most stunning sunsets, saw so much wildlife, made new friends, and learned so much about that amazing country. Would we consider buying property there? Claro que si!

 

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Playa Herradura

 

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.

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!

 

 

 

 

 

 

Sector Action

The Canadian and U.S. markets closed strong this week. There was a bit of weakening on Wednesday, but some big moves for Microsoft and Amazon last night helped the NASDAQ as well as other tech stocks. The energy sector just had a strong couple of days which helped the rest of the market.

oils

Oil/energy ETFs HOU.TO and XEG.TO on freestockcharts.com

A lot of Canadian oil stocks were in play today. Here are a few:

  • RRX.TO
  • CPG.TO
  • CVE.TO
  • CFW.TO
  • TCW.TO
  • TOG.TO
  • ERF.TO

The charts for these either had good daily, weekly, or monthly charts – but none of them had great setups on all three of these timeframes. I decided to take a look at a couple of the energy ETFs, the HOU.TO and XEG.TO.

While it looks like the recent surge could take the sector higher, I checked to see if there is room to move up. The bullish move had already started in September, now nearing previous resistance as marked off on the charts. If the sector moves sideways a little longer with more buying and less selling, it could result in a more substantial move up.

This weekend, as you attend your costume parties and chat about the markets with your friends, try not to get too swept up in all the hype. It’s tempting to get really excited over all the market action that’s happened in the last while. Before you start buying up tech and energy stocks, watch how the market digests this over the next week or two.


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