3 March 2017: The Fed in the spotlight?

Will the Fed be able to steal the spotlight from Donald Trump in the upcoming weeks? Some investors expect the Fed to raise interest rates as soon as their next meeting, mid March. In the last six years, this meant really something to investors: a lowering of interest rates implied that stock prices would go up and a rise meant that stock prices would go down. It was as simple as that. But circumstances have changed. A rise of rates these days could also be interpreted as a sign of a strong US economy. And in that case, many investors will interpret a rise as a bullish signal. So, it might be the case that the Fed is indeed able to steal the spotlight from Donald Trump around 15 March, but that Janet Yellen’s performance will not make investors blink for a second.

white-chapel-logo-small

Yesterday, US Markets retreated from the gains they made the day before: all major indices lost at least 0.5%. Volatility eased substantially and the VIX is once again back below 12 points at 11.81. Our UVXY ETFs were able to make a small gain nevertheless: +0.4%. Our return from the start rose to 240%.
White Chapel moved closer to a trading signal, but it remains the question if it will be able to reach the threshold before swinging back.

Accumulated capital at close of previous trading day

Return since start

Return this year

Return this quarter

$34,041

+240.41%

-15.55%

-15.6%

Our initial capital was $10,000 at 1 January 2016. Our average Annual Return is 185%.

RS_v05-small

René’s Reflections @ Friday: BANG!

A couple of days ago, I parked my car in an underground parking in the city center of my hometown. Just as I locked the door, another car pulled up right behind me. I could hear that it was driving a bit too fast for the gear it was in. If cars could speak, this one would not hesitate to raise its voice above the sound of its engine to make itself audible, begging the driver to slow down or shift gear.
I turned around to see if taking cover might be a good idea. After all, who could tell if this driver wasn’t just as lousy behind the steering wheel as he was a gear shifter?
It was a dark gray MPV. Behind the wheel was a man in his mid-sixties. On the passenger seat sat a woman of about the same age. Most likely his wife, but it could also be a colleague, a hitchhiker, his mindfulness trainer, or his… maybe his mistress? It’s all possible. And who am I to say anything about the odds of one over the other?
The man was looking around for a parking space, as he passed me by. The woman pointed to her right in the direction of an open space he overlooked, but he didn’t notice her gesture as he was too preoccupied with his own little quest. He seemed to be focused on one thing and one thing only: to find that perfect space to park his car. He turned left and disappeared behind the corner. After a short while, he stopped the car. For a moment, nothing happened. Then I heard the car being shifted into reverse gear. I could guess what had just happened: the woman had spoken. I leave it to your imagination what the exact phrase could have been, but it probably boils down to something like: “You might as well listen to me every once in a while.”
I decided not to walk, and to stay close to my car as long as the MPV was not at a safe distance from me.
Driving backward around a corner is an art. Not everyone can do it. There are those who know for sure they can do it, and those who don’t know they can’t. No matter which of the two you encounter, you better find some high ground as quick as you can!
The MPV passed me by again, this time in reverse. The man looked at me. I looked at him. Wondering what the heck he was doing. Driving backward while looking at anything but what was behind him, not even in his rear view mirror. I raised my hand to stop him, when I realized that he was on a collision course with a shiny Belgian Audi. His reaction came too late. A loud “BANG!!!” followed by the sound of breaking glass. The man left his car, shook his head, and started a quick damage survey on both cars. All the time, the woman didn’t even flinch. She stayed in the car, motionless. I guess she was the one least surprised.
And the moral of the story is…?
Don’t listen to a woman? If the thought even crossed your mind, that’s hilarious.
Don’t drive an MPV backward? No.
Avoid crowded parkings, or any parking for that matter? Maybe. But no.
Don’t dither. Don’t look back when you shouldn’t. And by all means, do look back when you should.
But there’s much more to this little story (which, by the way, happened in reality, exactly as described.)
Depending on the reader, the moral will vary. May it provide you with a nice starting point for your own reflection, over the weekend.