9 June 2017: Highest level of uncertainty

The UK elections got an outcome that implies the highest level of uncertainty. None of the parties that took part in the elections received a majority and the Conservatives scored far worse than expected. At the moment of the writing of this piece of text, almost everything is uncertain: Will Prime Minister Theresa May resign or not? Will there be another round of general elections? Will there be another EU referendum? Will the UK start the negotiations on the Brexit or will these be postponed for an indefinite period of time? Main victim of all this uncertainty is the British pound, which sank more than 2%. The price that the Brits pay for future isolationism is high. A globalized world cannot be pushed in another direction. The total chaos after the UK elections should be a clear signal to a certain person on the other side of the Atlantic…

The NASDAQ recorded another substantial gain yesterday, after former FBI Director James Comey’s appearance in front of the US Senate Intelligence Committee turned out to be no reason for concern. The NASDAQ closed at a record high, gaining 0.39%. The Dow (+0.04%) and S&P 500 (+0.03%) closed almost unchanged. However, volatility eased: the VIX closed more than 2% lower. VIX ETNs profited and gained more than 2%. UVXY ETFs had to pay the price and lost more than 4.5%.
Danny Daredevil had another bad day: his RSS dropped to 368%. Adventurous Anny is still holding cash. Her RSS remained at 39%. Solid Suzy and Lazy Larry saw their RSS climb back above 20%. Their RSS is at 22%.
None of our models gave a trading signal at the end of yesterday’s session.

Model Holds Start date

RSS

YTD

QTD

AAR

Danny Daredevil UVXY 1 January 2016

368.39%

16.19%

-0.08%

193%

Adventurous Anny Cash 6 March 2017

39.23%

39.23%

14.33%

257%

Solid Suzy XIV 6 March 2017

22.26%

22.26%

11.63%

116%

Lazy Larry
XIV 6 March 2017

22.26%

22.26%

11.63%

116%

RSS = Return Since Start | YTD = Year-To-Date | QTD = Quarter-To-Date | AAR = Average Annual Return

 

René’s Reflections @ Friday: Behind the numbers

My earliest recollections of stock market investing go back to when I was ten years old, or thereabout. My father had a subscription to the Algemeen Dagblad, a Dutch national daily newspaper. At the end of the newspaper, the stock quotes and stock market data were to be found. In order to squeeze them into one page, the newspaper editors used the smallest font available on their typesetting machines. Maybe the tininess of the font added to its mystery, but most of all I was intrigued by the plethora of numbers, going up and down everyday, more or less in unison, as if by an invisible hand or some kind of secret mechanism.
I reckoned there had to be a big, mysterious world, hidden behind these numbers with their daily fluctuations, a world only accessible to initiates. I imagined that, to the initiates who inhabited this world, these numbers stood for their cryptography – only to be used and understood by them, to their advantage only, and to the detriment and cost of the ignorants and the uninitiated. The latter group knew no better than that they were initiates themselves, and therefore part of this world. Only by the virtue of their ignorance and misconceptions, this system could maintain itself, and allow the small group of initiates to thrive. The system could keep itself alive easily, as there would never be a shortage of new candidates.
There is something that adults leave behind in their childhood: the ability to grasp the essence of complex matters, by using nothing more than their vivid imagination…