23 June 2017: Close to a meltdown?

Stock prices have been rising and rising the last seven months. Investors have been very enthusiastic. The crucial question is: have they become overenthusiastic, have we reached the state of euphoria and are we close to a meltdown? Some say yes, others say no. In the graph below, we included the trajectories of the NASDAQ Composite index in the 18 months before the meltdowns in 2000 and 2008. And the graph for the same period up until now. What do you think: are we close to a meltdown of the stock markets?

 

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US indices closed almost unchanged. Shares of financials and consumer staples went down, those of companies in the health-care and biotechnology sectors went up. The S&P 500 closed 0.05% lower, and the Dow slipped 0.06%. The NASDAQ recorded a small gain:+0.04%. Volatility eased: the VIX closed 4.65% lower. UVXY ETFs lost 1.73% and XIV ETNs gained 1.02%.
All of our models were holding XIV ETNs yesterday and made a profit. Danny Daredevil‘s RSS rose to 344%. The RSS of Adventurous Anny closed above 40% yesterday. Solid Suzy and Lazy Larry saw their RSS rise to above 26%. The average annual returns of our models stay within a range of approximately 100-200%.

Model Holds Start date

RSS

YTD

QTD

AAR

Danny Daredevil UVXY 1 January 2016

343.52%

10.02%

-5.39%

174%

Adventurous Anny Cash 6 March 2017

40.10%

40.10%

15.04%

209%

Solid Suzy XIV 6 March 2017

26.44%

26.44%

15.45%

119%

Lazy Larry
XIV 6 March 2017

26.44%

26.44%

15.45%

119%

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

 

Two of our models gave a trading signal at the end of yesterday’s session: Danny Daredevil and Adventurous Anny. Danny switched from XIV ETNs to UVXY ETFs and Anny sold her XIV ETNs for cash at the opening of today’s session.

 

 

RS_v05-smallRené’s Reflections @ Friday: Future Me

One of the more fascinating things about the Internet, and technology in general, is that the only limit to its possibilities is the imagination. Just think of something, no matter how wild, unthinkable, absurd, or far-fetched it may seem. If it doesn’t exist already, somewhere someone will probably be thinking about it or working on it. The website futureme.org is just one of the many wonderfully absurd examples that the quirky corners of the Internet has to offer. Here, you can send messages to your future self. Or as they explain: “Usually, it’s the future that will reflect back on the present. We decided to flip that around. So send your future self some words of inspiration. Or maybe a swift kick in the pants. Or just share some thoughts on where you’ll or what you’ll be up to in a year, three years…more? And then we’ll do some time travel magic and deliver the letter to you. FutureYou, that is. Getting a surprise from the past is actually kind of an amazing thing.”
I found out about futureme.org in April 2006 and I can second that it is quite a surprising experience to receive a message from your past self. J.R. Moehringer, Pulitzer Prize winning correspondent of the LA Times, put it like this: “Most of the great philosophers have struggled to define this elusive thing called Self. Plato, Descartes, Locke, Hume, they all gave slightly different answers to the same haunting question: Who am I? FutureMe.org freshens this age-old question by reframing it in e-mail-ese, the telegraphic code of our daily lives, which creates a sharper sense of immediacy than the prosaic letter. Forced to address ourselves through the language and lens of a new technology, one that stretches and shortens our notion of time, we can’t help but ask: Is this me at 42 the same me I will be at 62? Am I just one me in the midst of a single unified narrative, or a series of mes connected by one strand of memories, one starting point, one name?”
While that’s all very nice and interesting, I can’t help but wonder: is anyone working on pastme.org? I would love to receive a message back from my future self!