Eoin's personal portfolio: commodity long initiated and investment position increased
Comment of the Day

November 09 2022

Commentary by Eoin Treacy

Eoin's personal portfolio: commodity long initiated and investment position increased

Eoin Treacy's view

One of the questions subscribers ask most often is how to find details of my open trades. To make it easier I will simply repost the latest summary daily until there is a change.

I dipped back into the gold market today. I still have additional bids below the market which will be triggered in the event of additional volatility but three upward dynamics in six weeks is enough to suggests a low of at least near-term significance. I opened a long in the December contract at $16.76.

I also increased my investment long in the VanEck Vectors Gold Miners ETT paying $24.74 for another equal-sized position. My original position in the VanEck Vectors Gold Miners ETF was purchased on March 25th 2020 at $20.12. I bought another unit at $35.79 on December 1st 2020. I continue to shop for opportunities in the gold sector.

The discount rate is still rising so that is going to present an even bigger challenge for stock market valuations. Following an impressive rebound the Dow Jones Industrials Average was back in the region of the 200-day MA and posted a downside key day reversal on November 2nd. I opened a short in the December contract at 32,383.5. The Nasdaq-100 had not rallied as impressively but is also rolling over. I opened a short at 11119.4 in the December contract.

I remain convinced we are on the cusp of a global recession so I continue to hold my put options. I deployed 5% of my available capital to purchase this hedge on August 11th.

I purchased close to equal notional values of puts in Alphabet (GOOGL US 06/21/24 P60 for $2.10), Microsoft (MSFT US 06/21/24 P175 for $6.55), Apple (AAPL US 06/21/24 P100 for $4.55), Amazon (AMZN US 06/21/24 P100 for $8.70), Tesla (TSLA US 06/21/24 P200 for $7.65), Nvidia (NVDA US 06/21/24 P50 for $2.34), Berkshire Hathaway (BRKB US 01/19/24 P200 for $5.25), Exxon Mobil (XOM US 06/21/24 P50 for $2.76) and the Nasdaq-100 ETF (QQQ US 06/21/24 P195 for $7.58). The downside of buying long-dated options is the bid/offer spreads tend to be wide, so the relative cost of executing the trades is quite high.

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