25 January 2017: Calm before the storm?

TPP? Torn. TTIP? Banned to the ’round shaped archive’. NAFTA? Renégotiate. US President Trump is turning free trade agreements into minced meat. This is not surprising, given Trump’s election rhetoric. What is surprising, is that stock investors are shrugging their shoulders, as if nothing is happening. In the short run, Trump’s current decisiveness may give (especially US) stock markets a warm feeling. But once other countries start recovering from the first shock, things may and definitely will get nasty. The US are quickly changing from the major force behind all these agreements to the biggest free rider in the world. Once the former agreement partners start realizing that, there is no other thing they can do than to punish the free rider. And we will be back in the days of trade wars and import levies. The current quiet in US stock markets can be nothing but the calm before the storm.

white-chapel-logo-smallUS indices made some strong gains yesterday and the VIX declined to a very low level of 11.07 points, which is the lowest level in almost two and a half years. Our UVXY ETFs took another blow to the chin, losing more than 9%. Return since the start dropped to 189%. Return for the year is at -28%.
At these extremely low levels of volatility, White Chapel is advising us to stick with our volatile securities, UVXY ETFs.

Accumulated capital at close of previous trading day

Return since start

Return this year

Return this quarter

$28,885

+188.85%

-28.34%

-28.3%

Our initial capital was $10,000 at 1 January 2016. Our average Annual Return is 170%.

Dutch wildlife goes contrarian. In the local newspaper, René read an article about the forest ranger of Brabants Landschap in West-Brabant (a conservation organization in the south of the Netherlands). According to him, hares and foxes are already displaying springtime behavior, despite the icy cold. Do animals know something we do not? Do they have extra senses? According to René, these are rhetorical questions. And if their contrarian behavior can be seen as an omen, it might very well be a good one!

Photo by oldbilluk. Some rights reserved