17 July 2017: “We are overvalued!”

When we look around, we see a world that is transforming and changing, in a dramatic and undeniable way. Yesterday’s certainties are today’s follies, and yesterday’s values are no longer today’s values. We see these changes on many levels of daily life. Take politics for example. Back in the old days – say a year ago – there was a general sense that politicians were decent people. Some of them (or most, or even all of them, depending who you ask) may have had their way of getting creative with the truth and with the facts, in order to reach their goals. Goals which were not necessarily aligned with the greater good. But as long as their lies, half-truths and disinformation stayed beneath the surface of public consciousness, they managed to get away with it. This has changed. Today, we see politicians drop their mask of credibility and decency easily, openly and shamelessly, without any consequences – so far.
Changes can also be seen in corporate culture. The most recent example of this is the CEO of a public company who puts out a statement, saying that the stock price of his company has become way too high.
Whát?
Yes, that’s right: the CEO of a public company who puts out a statement, saying that the stock price of his company has become way too high. Although not strictly unique, it is highly unusual to say the least. According to Brian Sozzi in an article at TheStreet, Elon Musk said at the National Governors Association Summer Meeting in Rhode Island that ‘shares of Tesla are trading at a level “higher than we have any right to deserve” based on optimism about the company’s future.’
What will be next? And how is thát going to affect the trading floor?

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US markets bathed in a sea of green on Friday. Major banks posted stronger-than-expected results, and investors anticipated a possible delay of interest rate hikes after dovish comments of Fed Chair Janet Yellen that indicated a more gradual approach to tightening monetary policy. All through the trading day, the major indices were on the rise. The Dow closed 0.39% up, the S&P 500 ended 0.47% higher and the NASDAQ gained 0.61%. Volatility eased for the sixth day in a row. The VIX dropped 3.9%, descending even further into rare single digit territory. It closed at 9.51, its third lowest finish ever recorded. Almost 25 years ago, in December 1993, it closed lower on two occasions: at 9.48 and 9.31. XIV ETNs profited from this drop in volatility and gained 1.9 percent. UVXY ETFs lost 3.7 percent.
Danny Daredevil is holding UVXY ETFs and paid the price for the ongoing decline in volatility: his RSS dropped to just below 239%. Adventurous Anny is holding cash. Her RSS remained at 33%. Solid Suzy and Lazy Larry saw their RSS rise to 32%. All four models have about the same AAR at the moment.
None of our models gave a trading signal at the end of Friday’s session.

Model Holds Start date

RSS

YTD

QTD

AAR

Danny Daredevil UVXY 1 January 2016

238.34%

-16.07%

-22.27%

121%

Adventurous Anny Cash 6 March 2017

32.57%

32.57%

-4.39%

119%

Solid Suzy XIV 6 March 2017

32.26%

32.26%

5.67%

118%

Lazy Larry
XIV 6 March 2017

32.26%

32.26%

5.67%

118%

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

 

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René enjoyed watching the Wimbledon men’s final yesterday. Switzerland’s Roger Federer defeated Croatia’s Marin Čilić in straight sets, winning a record-breaking eighth Wimbledon title.

The number eight is considered to be a lucky number in Chinese and other Asian cultures. Eight (八; accounting 捌; pinyin bā) is considered a lucky number in Chinese culture because it sounds like the word meaning to generate wealth (發(T) 发(S); Pinyin: fā). Property with the number 8 may be valued greatly by Chinese. ― Wikipedia

Roger Federer, born on 8/8, played his 8th head-to-head match against Marin Čilić yesterday. In a match that earned him his 8th Wimbledon title, he made just 8 unforced errors, lost only 8 games, and ended the match with his 8th ace. At the presentation ceremony, attended by 8 members of his family (himself included), Federer raised the trophy above his head for 8 seconds. Could it be there is something weird going on with the number 8 here? Numerologists might want to dive further into this. But as far as These Dutch Guys are concerned, this is all coincidence. If you look for patterns, you will find them everywhere.