4 January 2017: A lot of air

Last year, stock markets struggled the first weeks of the year. Investors were uncertain about the growth potential of the world economy. This year, everything seems different. And although a lot of air has been pumped into stock prices, the group of investors who are critical about this high level of prices is outnumbered by the slightly euphoric masses. It is probably not before the end of the first 100 days of Donald Trump’s presidency that investors will have a more realistic picture of the state of the economy. Until then, optimistic investors might just as well keep bumping…

white-chapel-logo-smallUS stocks had a positive start of the year yesterday. All major indices made substantial gains: the S&P 500 and the NASDAQ added 0.85% and the Dow gained 0.60%. Volatility eased sharply: the VIX closed more than 8% lower and our UVXY ETFs lost 14%. White Chapel started the year in the red. Our average annual return dropped to 241%.

Trading signal: as a result of a change of momentum, White Chapel gave a trading signal at the end of Tuesday’s session: an “I” (inverse) signal. As a result of that, we sold our volatile positions (UVXY ETFs @ $7.31) this morning and bought inverse ETNs (XIV ETNs @ $50.77).

Accumulated capital at close of previous trading day

Return since start

Return this year

Return this quarter

$34,552

+245.52%

-14.29%

-14.3%

Our initial capital was $10,000 at 1 January 2016. Our average Annual Return is 241%.

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Yesterday, when René was about to step into his car, he noticed that one of his rear tires was flat. The cause of the flat tire was immediately apparent, as a sharp piece of white plastic stuck out of it. It looked like it was part of some fireworks igniter. Probably it had penetrated the tire while he parked the car. It seemed that René had chosen the wrong spot: exactly there, where a lot of fireworks debris was left behind by people who love fireworks more than cleaning up their mess.
Did you know that these days many new cars are not equipped with a spare tire anymore? Not too long ago, we could replace a headlight (or a tire for that matter) by ourselves. Nowadays, we need the help of a service station to get us back on track. Having said that, one of the merits of our fast paced society is, that within an hour after your service call, you will be on your way again. Meanwhile, you can kill the time by humming a rhyme.
We gaan nog niet naar huis (We’re not going home yet)
Nog lange niet, nog lange niet (Not any time soon)
En we gaan nog niet naar huis… (And we’re not going home yet…)