11:35 a.m. New York time

I’ve added GH to my Genetics Portfolio, for a debit of $82.71.

11:20 a.m. New York time

In my Growth Portfolio for stocks, the algorithm tossed up WGO as a new position, which I entered for a $53.04 debit.

PWR dropped off of the portfolio. However, it is also listed in one of my secondary strategy portfolios, Value, and so I’ll keep the position, which I entered on Dec. 9 for a $40.47 debit.

In my Genetics Portfolio, today brings the height of the ridiculous. Two positions that I entered yesterday, AQB and NTLA, and one that I entered the day before yesterday, CTSL, all lost their qualifying strategy scores, dropping from the portfolio list. All three continue to show a buy recommendation from Zacks, with a score of 2.

That’s more action in portfolio construction than I want. Only one of the three, NTLA, is showing a profit. And no wonder! Such rapid-fire changes get us into random walk territory rather than a trend.

So, I’m abandoning the letter grades assigned by Zacks to represent a position’s likely performance under a value, growth or momentum strategy. Instead, I’ll retain the three symbols, and going forward shall rely only a Zacks  score of 1 or 2 among the prospects as a qualification for entry. I shall use the strategy scores as guidance for which qualifying prospect I enter first.

Under the new rule, I retain AQB, BMY, CSTL, INCY and NTLA in the Genetics Portfolio. All have a score of 2. In addition, I can now add five more qualifying positions: GH with a score of 1, and CGEN, CLLS, ONVO and PSTI, all with scores of 2.

I’ll add the five in gradually as funds become available, giving priority to GH.

A good change, I think. After all, as a wise mentor once said to me about rules, Rules are for your benefit, not you for the rules. Flexibility is the soul of profit.

By Tim Bovee, Portland, Oregon, December 20, 2019

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2:15 p.m. New York time

I added two stock positions to my Genetics Portfolio: AQB for a $2.03 debit and NTLA for a $15.22 debit. That catches me up with all the stocks in my portfolio pool that match my criteria: A Zacks ranking of 1 or 2 and at least one of the Zacks strategy scores — Value, Growth, Momentum — at A or B. The pool size is 25 symbols, and there are only five symbols fully qualified at present.

The stock underlying my short iron condor options position on XLY goes ex-dividend on Friday. The options position is within the profit zone and is unlikely to be assigned, so I’ll stand pat.

By Tim Bovee, Portland, Oregon, December 19, 2019

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12:20 a.m. New York time

I added a stocks position to my Genetics Portfolio, CSTL, for a debit of $27.06 per share.

In my options holdings, TLT goes ex-dividend on Thursday. The underlying stock pays dividends monthly. My short iron condor options position is out of the money and so is an unlikely candidate for early assignment, so I’m taking no action.

By Tim Bovee, Portland, Oregon, December 18, 2019

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1:45 p.m. New York time

I made a number of adjustments to two stock portfolios today.

Growth Portfolio:

Exited AMAT for $60.48 per share, a profit of $2.49. The position showed a 4.3% return over 19 days, or an 83% annual rate. The exit was triggered by analyst’s revisions to their assessments.

Exited CNNE for $37.17 per shares, a profit of $1.90. The position returned 5.4% over 52 days for a +38% annual rate.

I re-entered EBMT, whose trailing stop/loss was trigged yesterday by something rogue. The re-entry debit was $22.08 per share.

I added RS, which appeared on the screening, for a debit of $119.89 per share.

Genetics Portfolio:

I exited GH for $77.64 a share, a $3.39 profit, after it ceased to qualify for the portfolio due to a lowering of Zacks assessment of the stock’s momentum, from A at entry down to C.

I added two symbols: BMY for a $63.73 per share debit, and INCY for a $92.12/share debit.

By Tim Bovee, Portland, Oregon, December 17, 2019

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10:45 a.m. New York time

The 20% trailing stop on EBMT in the Growth Portfolio was triggered, exiting the position at $21.71 per share, up 0.28 from the entry level.

I’m not quite sure why the stop was triggered — 20% trailing from the current bid is $17.37, and the price hasn’t approached that level since entry, not even in intra-session trading. A rogue bid, perhaps?

Nonetheless, the symbol continues to meet my criteria for the portfolio, and assuming no change, I shall re-enter on Tuesday.

Looking ahead this week…

The December monthly options trade for the last time on Friday and expire thereafter. I’ve already exited my positions, each for a profit.

I’ll continue the slow population of my Genetics Portfolio on Wednesday, adding a new position in a symbol yet to be determined.

By Tim Bovee, Portland, Oregon, December 16, 2019

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1:55 p.m. New York time

I’m starting a somewhat different sort of portfolio, one that gives me an ability to provide a specific sort of business rather than a strategy. Initially, I shall be focusing on companies developing medical uses for genetics, and shall call the collection the Genetics Portfolio.

Like my current portfolios — the primary Growth Portfolio and secondaries Momentum and Value — the new portfolio will use Zacks Investment Research metrics as a way to pick from a pool of stocks. My strategy portfolios use the entire pool of symbols having a strong buy (rank 1) assessment from Zacks. The new sector portfolio, Genetics, will draw from a pool of genetics companies that are held by the exchange-traded fund ARKG.

The first buy in the new portfolio is GH, for $74.25 per shares. I shall be adding periodically as funding becomes available. My selection rules are that a purchase must have a buy (rank 2) or strong buy (rank 1) from Zacks, along with good grades (A or B) from at least one of the three strategy rankings, value, momentum and growth. A rank below 2 or strategy rankings that are all C or lower will be a signal to exit the position.

The sector portfolios are designed to take advantage of free trading — no fees — and also the fact that funds must publish their holdings periodically, providing a ready-made pool. The fund itself will provide a measure of how the subset I pick is doing. I’ve chosen Robinhood to house this strategy, and they are about to bring a partial shares system online, another attractive feature for a portfolio where my aim is to dedicate the same amount of money for each purchase.

Ideally, this method will outperform the fund that forms the pool from which I draw trades. The name of my pool? The Gene Pool, of course.

12:15 p.m. New York time

I’ve updated XOP Analysis with results.

12:05 p.m. New York time

I’ve exited XOP, the last of my options iron condor positions expiring Dec. 20, and shall update the analysis shortly with results.

In shares, I exited my position on FANH for $25.01 per share, a loss of $1.16. The trade resulted in a 4.4% loss over four days, or a -404% annual rate.

By Tim Bovee, Portland, Oregon, December 13, 2019

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10:40 a.m. New York time

I’ve updated APA Analysis with results.

10:10 a.m. New York time

I’ve exited my short iron condor position on APA for a $1.09 debit, a 15.5% profit. Analysis upcoming.

In shares, I’ve added IBP to my growth portfolio for a $71.50 debit.

(I have referred to my primary portfolio as “upgrades and revisions”. The word “growth” better describes the goal, and so I shall use that terminology going forward. The selection is based on expectations of growing earnings.)

By Tim Bovee, Portland, Oregon, December 12, 2019

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10:15 a.m. New York time

I’ve exited two shares positions from my upgrades and revisions portfolio, FSBW for $62.60 a share, a $2.63 profit, and SNE for $66.24, a 98 cent profit.

FSBW produced a 4.4% return over 13 days, or a 122% annual rate.

SNE tallied a 1.5% return over six days for a 92% annual rate.

By Tim Bovee, Portland, Oregon, December 11, 2019

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10:35 a.m. New York time

One of my short iron condor prospects, XLP, gained volatility, showing a 25.8% implied volatility rank in early trading. The best construction still showed a 5.8:1 risk/reward ratio, which is too rich for my blood. So I’m abandoning further attempts to add to my options holdings expiring January 17 and shall be content with the two positions entered yesterday: TLT and XLY.

An hour after the opening bell XLP’s IV rank had dropped to 14.9%, about the same as it did yesterday. So clearly a fickle IVR is a feature of XLP, not an anomaly.

My JAN17 series holdings will be managed on December 27, meaning the profitable positions will be exited, 21 days prior to expiration.

I exited four stock positions in my upgrades and revisions portfolio, AMED at $166.65, for a profit of 94 cents a share; DECK at $164.81, a $2 loss; IBP at $70.43, a $1.27 loss and SPAR at $17.71, a 30-cent loss.

Also, RH has been added back into my primary portfolio (revisions). It was removed but remained alive in my secondary portfolio (momentum). I entered the position on November 27 for a $204.53 per share debit

Results:

AMED produced a 0.6% return over five days, or a 41% annual rate.

DECK showed a 1.2% loss over 13 days for a -34% annual rate.

IBP stumbled into a -1.8% loss over four days, or a -162% annual rate.

SPAR tallied a -1.7% loss over one day for a -608% annual rate.

By Tim Bovee, Portland, Oregon, December 10, 2019

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The Consumer Discretionary Select Sector SPDR Fund (XLY)

Update 1/18/2020: As I expected, the remaining put leg of my short iron condor on XLY expired without value. The results I posted on January 15 stand.

Update 1/15/2020: The short iron condor position on XLY remains net out in the money, with two more trading days after today remaining. Rather than risk having short shares dumped into my account, I’ve exited the side built for a short $126 call, which was in the money, ensured by a long $128 call. 

Assuming the remaining puts do indeed expire with no value, I exited for a $0.77 debit, producing a $0.23 loss, with shares at $126.46, up $4.35 from their entry level. If my assumption is wrong, then I shall update this analysis after expiration.

XLY began rising on the third day after entry and continued to rise until peaking on the 4th day prior to today’s exit. The implied volatility rank fell to a mere 1.5%, down 28.7 points from the entry level.

Shares rose by 3.6% over 37 days, or a +35% annual rate. The options position produced a 29.9% loss for a -295% annual rate.

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I have entered a short iron condor spread on XLY, using options that trade for the last time 39 days hence, on January 17. The premium is a $0.54 credit and the stock at the time of entry was priced at $122.11.

The profit zone for this position is between $126.54 on the upside and $113.54 on the downside.

The implied volatility rank (IVR) stands at 30.2%.

Premium:	$0.54	Expire OTM
XLY-iron condor	Strike	Odds	Delta
Long	128.00	92.0%	8
Break-even	126.54	86.5%	13.5
Short	126.00	81.0%	19
Puts
Short	116.00	84.0%	16
Break-even	113.54	87.5%	12.5
Long	113.00	91.0%	9

The premium is 21.6% of the width of the position’s wings.

The profit zone covers a 3.6% move to the upside and a 7.5% move to the downside of the entry price, for total coverage of 11.2%

The risk/reward ratio is 3.6:1, with maximum risk of $196 and maximum reward of $54 per contract.

By Tim Bovee, Portland, Oregon, December 9, 2019

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