Financial Letter - May 5th, 2019
222nd Issue (since 01/24/2015)
CKL Inc. is now offering a portfolio to its customers based essentially on performance (0.9/10) made of only one US ETF plus options strategies on US ETFs. The 0.9 represents the annual administrative cost of management in percentage and the 10 indicates the percent of management fees above the high water mark. This kind of portfolio requires a capital of 250,000US$ and level 4 in option trading.
The short book on the Put/Call ratio is now available on Kindle and other electronic reading platforms . The title is: « L’antagonisme entre les options put et call: l’analyse du put/call ratio ». The authors of this short book are Charles K. Langford and Laurence P. Darveau.
The book “L’alchimie qui crée l’or – Le chasseur de tendances boursières II” is online (Amazon.ca and the title) on Kindle. It is in French. The book is now a “bestseller” in the category of business and finance. It's also available on all other electronic reading platforms (Kobo, iBook, etc.).
A second book is also available on electronic reading platforms like Kindle, Kobo, iBook, etc. Its title is “The Trend Hunter” and it is in English.
Visit our website at www.charlesklangford.com
Market Risk (Systematic Risk)
The market (SPY and its derivatives) ended the week at 294.03 points after reaching on Wednesday a historical high. The S&P500 index reached 2,953.99 points (last September the previous highest point was 2,940.91). The week was quite rough. Just after reaching the new high, the market started to fall as the FED said not increasing the interest rate and to be “patient”. On Friday, the April unemployed rate, the lowest in the last decades, boosted the market up. The week ended with a gain 0.002% for the SPY.
This week we should have probably some good news about the agreement between the U.S. and China. This should give the market a quite positive bias.
We believe the market is positively oriented but the chart 5 show a weakening of the uptrend in the last days of trading (see the diagonal support line)
The indicator CKL21 – see chart 4) shows the market (SPY) is now quite too bullish, revealing that a pause in the uptrend could be imminent. For more information about this indicator read the short text “Put/Call ratio” (see above).
The Langford Management
Presently our investments are in ETFs and ETN offering a high return, with a dividend yield between 5 to 10 % per year, at pro rata temporis, monthly. The market has still a strong positive bias. We don’t think for the moment to change the allocation because also the products with higher returns are also bullish.
In the USD accounts, still we have cash, in the form of FLOT, MINT, NEAR. In the CAD accounts, it is PSA or the equivalents. In the average, our portfolios are invested 60% in revenue and 40% in directivity.
In some, more aggressive accounts we have increased the capital synthetically with option strategies to profit of the actual upward strong momentum. In accounts that allow futures markets, we have futures contracts in long position on stock indexes.
Our portfolio management is always ad hoc, for each client. But also, we offer now five standardized mini-portfolios for clients interested:
- Bullish aggressive
- A contrarian as a hedge or profit
- Bullish and dividend oriented
- Against inflation
- Bullish, aggressive on non-traditional assets.
(The portfolio management fees of Charles K. Langford Inc. is 0.9% of assets, per year (equivalent to $900 per $100,000). The capital under management is invested exclusively in ETF, ETN and options)
Among a group of selected stocks and ETFs, the week just ended has given middle- and long-term buy signals for the following stocks and ETFs.
TREND FOLLOWING
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Middle-term bullish |
Long-term bullish |
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Canadian Market |
GRO.V |
ADE.V |
About Options
Investors that believe the current Canadian market offers interesting bullish opportunities, they can buy the call LB (stock closed at $42.79) June 21/40.00 @ $3.15 whose delta is 0.87 and gamma 0.08 (accelerator of delta). This call will offer a profit of 87% of the stock increase at a cost that is about 14 times lower than the present price. If the stock goes down, the maximum loss is the premium.
SPY - Daily - 2019/05/03
SPY - Weekly - 2019/05/03
VIX - 2019/05/03
Put/Call Ratio - 2019/05/03
SPX - Daily - 2019/05/03
