SWAG on Coffee $KCN6


As we have claimed several times, SWAG works on all markets and that includes commodities. How? Same thing as how SWAG works on Forex, equities and bonds, the Almighty SMA(20) and EMA(13) crosses. Let’s run down how we did it on “coffee”.

From the previous post we talked about “Who Trades Coffee?” well, it’s not just a question, it’s a question with substance as after that post we submitted our market order for KCN6 at 2 x 37,500lbs and in the 5-minute SWAG chart we already gained 0.67% still far away from our target of 20% but that is $567.96 in profits after commission and others

kcn6-5

kcn6-5m

Being the second most traded commodity in the market, there’s no way anyone can hype “coffee”, the old way of controlling price is destroying excess supply might still be in practice today. When you learn how to use SWAG in commodities, there nothing else to do except exploit the power of its core indicators such SMA(20)/EMA(13), Parabolic SAR just how it’s done in other instruments or markets.




Who Trades Coffee?


Next to oil, no, it’s not gold, I’m sorry, but coffee is the second most traded commodity in the market. Originally cultivated in the hills of Ethiopia, coffee has been revered as the beverage of the gods and has been traded in different markets for thousands of years.

coffee

Coffee, in the modern market is traded through the futures contract, we’ll be discussing futures contract, of course, in the near future as part of our livestream at Soul Of The Market.

An example of a coffee commodity futures contract.

 

Coffee Contract Specifications
Ticker Symbol Open Outcry: KC (ICE)
Electronic: EKC (ICE)
Contract Size 37,500 pounds
Deliverable Grades Arabica Coffee: A Notice of Certification is issued based on testing the grade of the beans and by cup testing for flavor. The exchange uses certain coffees to establish the “basis.” Coffees judged superior are at a premium; those judged inferior are discounted.
Contract Months March, May, July, Sept, Dec
Trading Hours Intercontinental Exchange (ICE): Monday-Friday 1:30am-3:15pm EST
Last Trading Day One business day prior to last notice day
Last Notice Day Seven business days prior to the last business day of the delivery month
Price Quote Cents and hundredths of a cent up to two decimal places
Tick Size .05 cent/pound = $18.75 per contract
Daily Price Limit
(Not applicable in electronic markets)
None

If you try to buy or sell a coffee contract you’ll see something like this

kcn6

This means that “Coffee” (KC) July (N) 2016 (6) is currently priced at $1.1925/pound because future commodities such as coffee, sugar, orange juice are quoted in cents per pound. In this case a trader $119.25 is equal to $1,192.50 per pound, so how can you afford that? We’ll discuss later on the subject about margins. The value of the commodity contract is always based on the current price of the market multiplied by the actual value of the contract itself. In this instance, the contract size is 37,5000 pounds

$1.1925 x 37,500 = $44,718.75

How can a retail investor from an emerging market like the Philippines can afford that? Without access to capital? This is where margins come in, commodities are always traded in margins and the margin changes based on the market volatility and the current face value of the contract. Looking at the screenshot above, the maintenance margin is at $4,800 but the initial margin that this particular account is already at $5,280. This means the account owner can buy “coffee” without exceeding the margin impact. This is how anyone who understands futures contract takes advantage of the opportunity to trade commodities like “coffee”.




Top Ten Most Traded Commodities


The list of the most common commodities and the exchanges they are normally dealt through are given below:

  1. Crude Oil and derivatives – The most commonly traded commodity is Crude Oil, and its various derivatives such as heating oil and gasoline. These commodities are mostly traded in the New York Mercantile Exchange [NYMEX], ICE Futures, the Dubai Mercantile Exchange [DME] and the Central Japan Commodity Exchange [C-COM].
  2. Coffee – The second most traded commodity is Coffee [value wise]. Coffee is mainly traded through the New York Board of Trade [NYBOT], the Kansai Commodities Exchange [in Osaka, Japan], the Singapore Commodities Exchange [SICOM] and Euronext [London].
  3. Agriculture – Common commodities in agriculture include wheat, corn, maize, oats, rice, soybeans and they are traded in the Chicago Board of Trade [CBOT], the Kansai Commodities Exchange [in Osaka, Japan], the Risk Management Exchange [RMX-in Hannover], the Minneapolis Grain Exchange, the Winnipeg Commodity Exchange [WCE], The Tokyo Grain Exchange [TGE] and Euronext.
  4. Animals and Animal Products – Animals and animal products such as live and feeder cattle, beef, frozen and fresh pork bellies, and eggs are mainly traded in the Chicago Mercantile Exchange [CME], Euronext, the Risk Management Exchange [RMX-in Hannover] and the Central Japan Commodity Exchange [C-COM].
  5. Cocoa, Butter, Orange juice and Sugar – Items like cocoa, butter, orange juice and sugar are also commonly traded in the New York Board of trade [NYBOT] and Euronext.
  6. Metals – Metals such as aluminum, nickel, copper, lead and ferrous scrap are mainly traded in the New York Mercantile Exchange [NYMEX], the London Metal Exchange [LME], the Shangai Futures Exchange [SFE], the Central Japan Commodities Exchange, Hedgestreet Exchange [in California], and the Tokyo Commodities Exchange [TOCOM].
  7. Precious Metals – The other commonly traded commodities are precious metals such as gold, silver and platinum and they are traded in the New York Mercantile Exchange [NYMEX], the Brazilian Mercantile and Futures Exchange [BMF], the Dubai Gold and Commodities Exchange [DGCX], the National Commodity Exchange Limited [in Karachi, Pakistan] and the Tokyo Commodities Exchange [TOCOM].
  8. Plastic –  Plastic is traded in the London Metal Exchange [LME] and the Dalian Community Exchange [DCE-China]
  9. Natural Gas –  Natural gas is traded in the New York Mercantile Exchange [NYMEX] and ICE Futures.
  10. Bio-fuels – Bio-fuels is another upcoming commodity and is now being traded in the Brazilian Mercantile and Futures Exchange [BMF], the Bursa Malaysia [MDEX], the Chicago Board of Trade [CBOT], the Chicago Mercantile Exchange [CME] and the New York Board of trade [NYBOT

Commodities_2048x2048

source: http://www.investorguide.com/article/11836/what-are-the-most-commonly-traded-commodities-igu/




Crown Asia Outlook


I have created a SWAG cheat sheet where $CROWN is included here

Cheat Sheet

If you like the see the fundamentals here it is, it’s generally getting better.

Annual

For the fiscal year ended : Dec 31, 2015
Currency(and units, if applicable) : Php

Balance Sheet
Item Current Year Previous Year
Current Assets 732,098,166 604,236,040
Total Assets 1,000,023,332 829,048,098
Current Liabilities 132,644,088 251,101,291
Total Liabilities 150,111,755 266,148,679
Retained Earnings/(Deficit) 133,150,397 58,003,420
Stockholders’ Equity 849,911,577 562,899,419
Stockholders’ Equity – Parent 849,911,577 562,899,419
Book Value 1.35 1.19
Income Statement
Item Current Year Previous Year
Gross Revenue 1,078,724,070 852,504,574
Gross Expense 932,372,037 758,782,599
Net Income/(Loss) Before Tax 146,352,033 93,721,975
Net Income/(Loss) After Tax 100,146,977 65,380,323
Net Income/(Loss) Attributable to Parent 0 0
Earnings/(Loss) Per Share (Basic) 0.17 0.14
Earnings/(Loss) Per Share (Diluted) 0.17 0.14

Quarterly

For the period ended : Sep 30, 2015
Currency(and units, if applicable) : Php

Balance Sheet
Item Period Ended Fiscal Year Ended(Audited)
Current Assets 748,512,362 604,236,040
Total Assets 1,011,010,686 829,048,098
Current Liabilities 176,586,813 251,101,291
Total Liabilities 192,306,528 266,148,679
Retained Earnings/(Deficit) 103,498,935 58,003,420
Stockholders’ Equity 818,704,158 562,899,419
Stockholders’ Equity – Parent 818,704,158 562,899,419
Book Value 1.30 1.19
Income Statement
Item Current Year (3 Months) Previous Year (3 Months) Current Year-To-Date Previous Year-To-Date
Gross Revenue 303,253,785 226,764,638 799,235,469 622,371,238
Gross Expense 261,505,267 189,033,574 698,507,286 559,213,183
Net Income/(Loss) Before Tax 41,748,519 37,731,064 100,728,184 63,158,056
Net Income/(Loss) After Tax 29,219,220 26,998,293 70,495,515 44,042,108
Net Income/(Loss) Attributable to Parent 0 0 0 0
Earnings/(Loss) Per Share (Basic) 0.05 0.06 0.15 0.12
Earnings/(Loss) Per Share (Diluted) 0.05 0.06 0.15 0.12

 

But then again, what drives stock prices to go up or down? Supply and demand, no matter how good the company is if the supply and demand for its shares in the market is not attractive then no one’s going to buy it. Let’s look at the stock data.

Status Open Market Capitalization 1,476,072,000.00
Issue Type Common Outstanding Shares 630,800,000
ISIN PHY1804M1000 Listed Shares 630,800,000
Listing Date Apr 27, 2015 Issued Shares 630,800,000
Board Lot 1,000 Free Float Level(%) 47.37%
Par Value 1.00 Foreign Ownership Limit(%) 40%
Last Traded Price Open Previous Close and Date 2.34 (Apr 25, 2016)
Change(% Change) down  (%) High P/E Ratio
Value Low Sector P/E Ratio
Volume Average Price Book Value
52-Week High 3.33 52-Week Low 1.50 P/BV Ratio

What the SWAG is telling us is SMA (20) is over EMA (13) with MFI below 20% oversold and Parabolic SAR about to stop and reverse.

CROWN-05032016

RECOMMENDATION: BUY

HOLDING PERIOD: T+90

As mandated by law, being a Certified Securities Representative, I can not guarantee against loss.




[WATCH] This Under Armour Ad Is Simply Genius


“Just do it” is out, “I will” is in. Who would not know Michael Phelps? 18 gold medals! That is dedication, that is thoroughness, that is not blinding flash of inspiration. Rule Yourself. Michael Phelps just showed the world how it’s done.

https://www.youtube.com/watch?v=Xh9jAD1ofm4




More Energy For $EDC


As discussed from the Live Stream…

EDC’s geothermal power projects engage in two principal activities: 1) the production of geothermal steam for use at EDC and its subsidiaries’ geothermal power plants; and 2) the generation and sale of electricity through those geothermal power plants pursuant to take-or-pay power offtake arrangements. EDC operates commercial operations in four of its 14 geothermal service contract areas namely, Tongonan geothermal project; Southern Negros geothermal project; Bacon-Manito geothermal project; and Mt. Apo geothermal project.

EDC is also into hydro power generation through its 60% equity interest in FG Hydro Power Corporation, which operates the Pantabangan-Masiway hydroelectric plants in Nueva Ecija. The Company likewise holds 10 wind energy service contracts covering areas in Ilocos Norte and Negros Occidental.

The Company’s subsidiaries include EDC Drillco Corporation; EDC Geothermal Corp.; EDC Holdings International Limited; EDC Wind Energy Holdings, Inc.; EDC Chile Limitada; and EDC Bright Solar Energy Holdings, Inc.

Let’s look at the fundamentals…

Annual

For the fiscal year ended : Dec 31, 2014
Currency(and units, if applicable) : Peso

Balance Sheet
Item Current Year Previous Year
Current Assets 25,066,785,202 24,340,366,326
Total Assets 124,499,464,926 105,005,504,336
Current Liabilities 18,250,762,866 8,907,923,561
Total Liabilities 80,879,378,449 68,760,545,431
Retained Earnings/(Deficit) 21,095,090,585 13,204,236,334
Stockholders’ Equity 43,620,086,477 36,244,958,905
Stockholders’ Equity – Parent 42,130,005,019 34,238,167,498
Book Value 2.32 1.93
Income Statement
Item Current Year Previous Year
Gross Revenue 30,867,199,917 25,656,270,470
Gross Expense 17,826,601,488 19,542,217,284
Net Income/(Loss) Before Tax 13,040,598,429 6,114,053,186
Net Income/(Loss) After Tax 11,818,009,028 5,628,069,837
Net Income/(Loss) Attributable to Parent 11,681,155,539 4,739,577,464
Earnings/(Loss) Per Share (Basic) 0.62 0.25
Earnings/(Loss) Per Share (Diluted) 0.62 0.25

Quarterly

For the period ended : Sep 30, 2015
Currency(and units, if applicable) : PHP

Balance Sheet
Item Period Ended Fiscal Year Ended(Audited)
Current Assets 27,981,883,395 25,066,785,202
Total Assets 132,489,462,123 124,499,464,926
Current Liabilities 16,134,062,203 18,250,762,866
Total Liabilities 87,058,046,747 80,879,378,449
Retained Earnings/(Deficit) 23,015,433,191 21,095,090,585
Stockholders’ Equity 45,431,415,376 43,620,086,477
Stockholders’ Equity – Parent 43,850,786,008 42,130,005,019
Book Value 2.42 2.33
Income Statement
Item Current Year (3 Months) Previous Year (3 Months) Current Year-To-Date Previous Year-To-Date
Gross Revenue 8,548,705,916 7,755,499,596 25,324,102,231 22,982,750,535
Gross Expense 7,120,101,059 3,267,705,656 18,527,750,287 11,390,318,979
Net Income/(Loss) Before Tax 1,428,604,857 4,487,793,940 6,796,351,944 11,592,431,556
Net Income/(Loss) After Tax 1,283,389,866 4,063,254,494 6,083,890,516 10,543,721,394
Net Income/(Loss) Attributable to Parent 1,256,786,123 4,091,477,633 5,865,342,606 10,376,801,597
Earnings/(Loss) Per Share (Basic) 0.07 0.22 0.31 0.55
Earnings/(Loss) Per Share (Diluted) 0.07 0.22 0.31 0.55

And then let’s look at the stock for $EDC

Status Open Market Capitalization 98,574,504,000.00
Issue Type Common Outstanding Shares 18,740,400,000
ISIN PHY2292T1026 Listed Shares 18,750,000,000
Listing Date Dec 13, 2006 Issued Shares 18,750,000,000
Board Lot 100 Free Float Level(%) 49.26%
Par Value 1.00 Foreign Ownership Limit(%) 40%
Last Traded Price 5.23 Open 5.33 Previous Close and Date 5.26 (Feb 04, 2016)
Change(% Change) down  0.030 ( 0.57%) High 5.36 P/E Ratio
Value 85,793,951.00 Low 5.20 Sector P/E Ratio
Volume 16,367,700 Average Price 5.24 Book Value
52-Week High 9.13 52-Week Low 5.14 P/BV Ratio

 

Currently there are 9,233,525,739 shares circulating in the market. So there are only two roles here, a whale and a plankton. Do you know where you are?

As far as SWAG-SAGO is concerned there is a good opportunity for this stock.

EDC-02072016

Recommendation: BUY/ BUY ON WEAKNESS / ACCUMULATE

As mandated by law, as Certified Securities Representative, I CAN NOT GUARANTEE AGAINST LOSS.




A Simple But Cool Invention


When we talk about startups it’s not always about some self-proclaimed geeks who spend a month learning Javascript to build another app for Android or iPhone late night at the basement.

Cooler hacks doesn’t even require programming like this semi-automatic soap wrapper.

https://www.youtube.com/watch?v=mXnB0DRE_gM

Unlike software, inventions like this one always qualifies for an appropriate patent and patent is an intangible asset that is valuable to companies that owns them.

Full details of this project:

Name of Project: Semi-automatic Wrapper
Objective: The aim of this device is to enable small start-up manufacturers to increase their packaging ability and improve package quality with relatively little investment.
Description: This device is made of either wood or plastic consisting of guides, tuckers and folders and a pusher to advance the bars being wrapped. It requires no power to operate it. It can wrap bar rectangular products such as banded soap and bar shaped candies, using pre-cut paper and produces envelope type wraps. The manual operation consists of positioning the bar and paper wrapper, application of glue and moving the pusher. The folding of the wrap is done automatically by the device.
Discussion: This proponent is a retired mechanical engineer with long experience in soap and food manufacturing as engineer, consultant and private entrepreneur as designer, inventor and fabricator of various equipments. His conclusion is that large manufacturers, which can afford high speed sophisticated automatic machines, dominate the industry and the market while the small entrepreneurs are at the tail end of the competition. Small start up businesses can not and would not invest major capital on high speed automatic machines because of small market and the uncertainty of public acceptance of the product. Moreover, much of the capital must go to marketing, promotion and R&D. Thus, the need for low cost equipment that performs with efficiency while maintaining factory-type quality.

Funding requested is for patenting to the amount of US$6,000. There is already a working prototype of this device.

You can donate for funding at GoFundMe https://www.gofundme.com/tmgerw6s




What's The Deal on LBC Express?


LBC Express Holdings, Inc. (LBC), formerly Federal Resources Investment Group, Inc. (FED), was formed on July 12, 1993 and used to engage in the manufacture of various adhesives and sealants and other chemicals for hardware, construction, do-it-yourself and industrial applications. In order to tap potential business opportunities, FED deemed it necessary to broaden the scope of the Company’s primary purpose by changing it to that of a holding company.

On July 22, 2015, a total of 59,101,000 shares of common stock of FED were issued out of its unissued capital stock in favor of LBC Development Corporation (LBCDC) following the completion of a mandatory tender offer by LBCDC to all shareholders of FED. As a result of said issuance, LBCDC became the owner of 59.1% of the issued and outstanding capital stock of FED. In October, FED conducted a concurrent issuance of 1,146,873,632 common shares to LBCDC and 178,991,839 common shares to three individual investors. The increase in LBCDC’s shares in FED resulted in a higher shareholding at 84.6%.

FED subsequently applied for the change in corporate name to the present one, which the SEC approved on October 12, 2015. The Company, however, maintained its primary purpose of being a holding company. FED executed on October 2, 2015 the deed of transfer whereby the Company acquired from LBCDC 1,041,180,493 issued and outstanding shares of stock of LBC Express, Inc. (LBEI).

LBC, through LBEI, provides logistics services via a network of 1,000 branches located nationwide. The LBC Group has also set up branches in various locations in North America, the Middle East, Asia Pacific, Europe and Oceania.

Recently, LBC has an unsettled issue with PDIC amounting to about PHP1.8B, just one of the many problems it is going through. Anyway, a business with no problems is not a business. If we have to keep on listening to the mainstream media the owners of this company should shut down this business and end their misery. But as you walk around the streets and observe keenly it’s business as usual with LBC.

Let’s have quick look of the fundamentals, yes the boring stuff, you know.

Annual

For the fiscal year ended : Dec 31, 2014
Currency(and units, if applicable) : PhP

Balance Sheet
Item Current Year Previous Year
Current Assets 2,799,659 5,200,716
Total Assets 2,799,659 17,693,975
Current Liabilities 1,924,000 1,428,643
Total Liabilities 1,924,000 1,428,643
Retained Earnings/(Deficit) -111,104,531 -95,714,858
Stockholders’ Equity 875,659 16,265,332
Stockholders’ Equity – Parent 0 0
Book Value 0.02 0.39
Income Statement
Item Current Year Previous Year
Gross Revenue 148,533 17
Gross Expense 15,535,236 4,237,071
Net Income/(Loss) Before Tax -15,386,703 -4,237,054
Net Income/(Loss) After Tax -15,389,673 -4,237,054
Net Income/(Loss) Attributable to Parent 0 0
Earnings/(Loss) Per Share (Basic) -0.37 -0.10
Earnings/(Loss) Per Share (Diluted) -0.37 -0.10

Quarterly

For the period ended : Sep 30, 2015
Currency(and units, if applicable) : PhP

Balance Sheet
Item Period Ended Fiscal Year Ended(Audited)
Current Assets 4,138,615,414 3,224,774,421
Total Assets 5,943,910,704 4,880,184,261
Current Liabilities 4,915,721,764 2,889,794,836
Total Liabilities 5,621,504,561 3,554,318,775
Retained Earnings/(Deficit) 414,129,041 133,861,985
Stockholders’ Equity 322,406,143 1,325,865,486
Stockholders’ Equity – Parent 357,946,979 1,339,790,549
Book Value 3.22 32.42
Income Statement
Item Current Year (3 Months) Previous Year (3 Months) Current Year-To-Date Previous Year-To-Date
Gross Revenue 1,980,474,146 1,742,502,716 5,764,018,829 5,242,315,377
Gross Expense 1,828,483,377 1,630,504,977 5,193,477,018 5,111,803,879
Net Income/(Loss) Before Tax 151,990,769 111,997,739 570,541,811 130,511,498
Net Income/(Loss) After Tax 101,193,688 62,523,888 389,338,545 85,795,429
Net Income/(Loss) Attributable to Parent 106,298,946 67,893,542 407,032,450 96,790,301
Earnings/(Loss) Per Share (Basic) 2.09 1.66 8.02 2.37
Earnings/(Loss) Per Share (Diluted) 2.09 1.66 8.02 2.37

As normal part of the routine, the stock data.

Status Open Market Capitalization 14,743,448,970.14
Issue Type Common Outstanding Shares 1,425,865,471
ISIN PHY5228G1023 Listed Shares 40,899,000
Listing Date Dec 21, 2001 Issued Shares 1,425,865,471
Board Lot 100 Free Float Level(%) 68.53%
Par Value 1.00 Foreign Ownership Limit(%) 40%
Last Traded Price 8.70 Open 10.50 Previous Close and Date 10.34 (Jan 11, 2016)
Change(% Change) down  1.64 ( 15.86%) High 10.50 P/E Ratio
Value 2,412,930.00 Low 7.50 Sector P/E Ratio
Volume 265,300 Average Price 9.10 Book Value
52-Week High 27.55 52-Week Low 10.34 P/BV Ratio

The closing price of 8.7 is less than the average price of 9.1 meaning there’s a good opportunity to trade this stock with only 265,300 shares or roughly 1% of the 28,027,007 shares circulating in the market has been traded as of this writing, in other words only few holders are interested to sell this stock, why? The others probably sensed a good opportunity to hold.

And the opportunity we are looking at is probably in the form of SMA(20) above EMA(13) or the SWAG that will eventually cross, the bearish Parabolic SAR that will not stay forever bearish, the Money Flow Index (Smart Money) at the below oversold level which will eventually move up.

LBC-01122016

 

Recommendation: BUY ON WEAKNESS

Holding Period: 90 trading days

Apply position sizing, risk management methodologies that you already know. As mandated by law, being a Certified Securities Representative, I CAN NOT GUARANTEE against loss.




[WATCH] 70mph Downhill Sierra Madre


Derek Delgado of Waray Longboards visited Manila for a family vacation. Unexpectedly, he will have his stoke of his lifetime bombing the hills of Sierra madre in Tanay, Rizal. And if you think some of our “interstate” highways are “bako-bako” then you’re living under a wrong dynasty.

I did a downhill myself from that same point and I know how it feels.

https://youtu.be/sC1tWIEVTKE

 




Our Faith Goes To Music


Eulogy from the Charlie Hebdo cartoonist. Just straight to the point and keeping it real indeed.

charlie-hebdo