17 November 2016: Refocus your lenses

seven2A seven-day winning streak of the Dow 30 was snapped yesterday. Are investors just marking time and should we prepare for phase two of the Trump rally that we have seen since the surprise election of the Donald? Or is the effect starting to fade and should we be looking for other clues to understand where the markets will be going?  Normally, the second option would be more likely, but with the election of Donald Trump, this also might be different. But there will be a moment that the abnormal will become the new normal. Investors are working hard to refocus their lenses and as soon as a sharper image of the markets arises, normal trading patterns will resurface. We might need some days to figure out whether or not we are back to normal, but we can be sure that it will happen. Our model White Chapel does not care too much, anyway, because it only looks at the underlying patterns.

white-chapel-logo-smallMany stocks took a breather after the post-election rally of the days before. The S&P 500 and the Dow made small losses. The NASDAQ had some room left to rise, after the beating it had taken shortly after the election. It added 0.36%. Volatility was also slightly higher and our XIV ETNs lost 0.8% as a result. Return for the year dropped to just below 290%.
White Chapel did not give a trading signal at the end of yesterday’s session and our model sees no reason for selling our XIV ETNs.

Accumulated capital at close of previous trading day

Return since start

Return this year

Return this quarter





Our initial capital was $10,000 at 1 January 2016. Our average Annual Return is 379%.


Totally out of the blue, and therefore much to his surprise, René was confronted with the following Google error message while performing a routine search on the terms ‘Greenspan’ and ‘conundrum’:
Our systems have detected unusual traffic from your computer network. This page checks to see if it’s really you sending the requests, and not a robot. Why did this happen?
That made René think. Good question. Why did this happen? By any means, he had no clue himself. And he would surely like to know more about the underlying mechanisms that had resulted into this cryptic error message. To say that it puzzled him, would be an understatement. Are we now living in a time where it has become suspicious doing Google searches on Greenspan and conundrum, instead of on Jay Z, Mary J. Blige, ‪‪Charlie Sheen‬, ‪Brooke Mueller‬‬, ‪‪Kendall Jenner‬, Pokémon Go or SpongeBob SquarePants, just to name a few?
René didn’t feel like filling out the captcha by hand. He leaves that kind of tedious tasks to his robot.