23 August 2017: Stairway to heaven

Yesterday, stock market indices in the US rose relentlessly. There appeared to be no doubt (whatsoever) on investors’ minds: the only way was up, up, up. While seeing this stairway to heaven being created, These Dutch Guys noticed that a number of articles were published on MarketWatch with such titles as The stock market is now in ‘correction mode’ and U.S. stock valuations haven’t been this extreme since 1929 and 2000. Speaking of being contrarian…. It felt like we were in two parallel universes at the same time. But in the end, we need both phenomena. A sharply rising stock market,that might even be rising more than history has ever seen, is necessary to enable corrections, or, even worse, crashes. In stock trading, there are no stairways to heaven. Only stairs to the top of the slide exist.

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Investors were obviously in a good mood yesterday. All major indices rallied. The Dow added 0.90%, the S&P 500 gained almost 1% and the NASDAQ topped both other indices: +1.36%. Volatility eased dramatically. The VIX closed almost 14% lower. UVXY ETFs had to take another beating: -14.6%. XIV ETNs climbed almost 7%. One wonders how long a rise like this can go on.
Danny Daredevil is still not in good shape. His RSS dropped below 100% and closed at 81% yesterday. Adventurous Anny is not moving. Her RSS remained at 4%. Solid Suzy and Lazy Larry keep partying: their RSS is approaching 25%.
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

80.65%

-55.19%

-58.50%

43%

Adventurous Anny Cash 6 March 2017

3.84%

3.84%

-25.11%

8%

Solid Suzy XIV 6 March 2017

23.53%

23.53%

-1.31%

57%

Lazy Larry
XIV 6 March 2017

23.53%

23.53%

-1.31%

57%

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

 

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The Netherlands has received its fair share of rainfall recently. This week, the summer weather is back again, with temperatures of over 25 degrees centigrade. The ideal growing conditions for mushrooms. The ‘common earthball‘ shown below, was photographed yesterday, when René visited his forest retreat. He almost put his foot on it, but could step aside just in time to avoid it being flattened. Not only is destroying mushrooms a criminal offense in the Netherlands, it also messes up your shoe soles big time. Autumn is coming soon. Mind your step.