21 August 2017: Blinded

A possible scenario: this so-called ‘Trump rally’ has reached its pinnacle, and will now kick into reverse. Those wearing nothing but their rose-tinted glasses and no other form of protection, will realize — after the fact — that they have been blinded. And the Donald, who took credit for the market’s rise after his election (“Now we have to go up, up, up.”) will blame anyone but himself when the hot air leaves the soufflé and the markets come crashing back down, down, down faster than they rose. And the ‘Trump effect’ will enter the history books as the economic disaster, induced by an inexperienced, incapable and megalomaniac President, who thought that his used-car-salesman techniques would be applicable to the arena of international politics and economics. As we said: a possible scenario.

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In a vain attempt to recover from Thursday’s losses, all major US indices lost further ground Friday on growing doubts over Trump’s agenda. The NASDAQ managed to close virtually flat for the day: -0.09%. The S&P 500 and the Dow lost 0.18% and 0.35% respectively.
All indices also closed the week in the red. Both the Dow (which is still looking at the 22,000 level from below) and the S&P 500 posted weekly losses for the second time in a row. They lost 0.84% and 0.65% respectively. The NASDAQ posted its fourth straight weekly loss: -0.64%. Volatility eased Friday after Thursday’s excessive rise. The VIX closed lower: -8.30%. UVXY ETFs lost 5.37% and XIV ETNs gained 3.34%.
Danny Daredevil sold his XIV ETNs at the opening of Friday’s session, and bought UVXY ETFs. Though UVXY ETFs lost from Thursday’s close, they gained slightly during Friday’s trading, and Danny could profit from that: +0.18%. His RSS rose to 130%. Adventurous Anny sold her XIV ETNs and now holds cash again. Her RSS is now at just below 4%. Solid Suzy and Lazy Larry kept their XIV ETNs and were the only models who profited from the 3.34% rise of XIV on Friday: their RSS climbed back to almost 11%.
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

129.91%

-42.97%

-47.18%

67%

Adventurous Anny Cash 6 March 2017

3.84%

3.84%

-25.11%

9%

Solid Suzy XIV 6 March 2017

10.81%

10.81%

-11.47%

25%

Lazy Larry
XIV 6 March 2017

10.81%

10.81%

-11.47%

25%

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

 

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Eighteen years ago, almost to the day back in August 1999, René drove the 300 miles to Honfleur, one of the most beautiful cities of France. Purpose of his visit was to witness the total solar eclipse of 11 August. But what he was about to experience wasn’t anything he could have predicted. A total solar eclipse isn’t just a natural phenomenon you can stand by and watch, without being rattled to the core in such a way that words can’t describe. If you would ask him what moment in his life left the greatest impression on him, René wouldn’t hesitate and mention the total solar eclipse of 1999. And he would add to that, “If you ever get a chance to witness one yourself, do everything you can to be there. It is a life changing experience.” Below is a YouTube video of that day. The ‘moment’ is at 1 minute 40.