Investors are getting increasingly critical about President Trump’s ability to get through proposals that stimulate business in the US. The now more than likely delay of ‘Trumpcare’ is an ominous sign for further trouble. Investors’ expectations of tax cuts, deregulation and infrastructure spending have pumped a lot of air into stock prices. Summer is drawing nearer and investors have to decide how they will enter their holidays. Will they try their luck and pack their expensive stocks in their holiday luggage or will they take their profit from the table by selling their stocks? With Donald Trump having trouble to achieve any political success, the latter option appears the most likely. Yesterday’s drop in stock prices may become a familiar pattern in the coming weeks.
All major indices took substantial losses. Especially tech stocks were out of favor. The NASDAQ closed no less than 1.61% lower. Also the S&P 500 (-0.81%) and the Dow (-0.46%) closed firmly in the red. Volatility rose sharply: the VIX closed almost 12% higher. UVXY ETFs regained some of the ground they lost the last couple of weeks: +6.64%. XIV ETNs took a step back: -3.38%.
In contrast to Monday, Danny Daredevil was the big winner among our models yesterday. His RSS rose to 345%. Adventurous Anny is still holding cash. Her RSS was unchanged. Solid Suzy and Lazy Larry were yesterday’s losers. Their RSS closed below 30% and dropped to 26%.
None of our models gave a trading signal at the end of yesterday’s session. If stock prices keep dropping, a trading signal for both Danny Daredevil and Adventurous Anny is becoming more and more likely.
RSS = Return Since Start | YTD = Year-To-Date | QTD = Quarter-To-Date | AAR = Average Annual Return
In his local movie theater, René went to see David Lynch: The Art Life, a documentary film about David Lynch, one of the most enigmatic and charismatic visual artists of our time. Many will only know him as the director of Twin Peaks (1990-91), a TV cult series that upended all conventions of serial television. Movie enthusiasts will also know him from his movies Eraserhead (1977), The Elephant Man (1980), Dune (1984), Blue Velvet (1986), Wild at Heart (1990), Lost Highway (1997) and Mulholland Drive (2001), most of which are jewels of contemporary surrealist cinema.
Less well known is the fact that a passion for painting forms a thread that runs throughout his artistic life. Lynch started out as a painter, and painting eventually led to cinema, more or less in a haphazard way: “I had some kind of a cubicle setup in this painting studio at the academy. And when I went into my little cubicle, it was very private. And there were other cubicles like that around where people could work in privacy. And I was painting a painting about four foot square. And it was mostly black but it had some green plant and leaves coming out of the black. And I was sitting back, probably taking a smoke, looking at it. And from the painting I heard a wind and the green started moving. And I thought, ‘Oh, a moving painting, but with sound.’ And that idea stuck in my head: a moving painting.”
The documentary is a must-see for Lynch enthusiasts. In the private setting of his home and his L.A. art studio, Lynch takes us by the hand by a series of monologues, leading us through his childhood and his development as a struggling artist in the early days up to the making of his first movie, Eraserhead. From an early age on, he was drawn to the ‘art life’ and committed himself to it in the face of resistance and incomprehension. The art life, as he describes it: “You drink coffee, you smoke cigarettes, and you paint, and that’s it.”