28 August 2017: Back to business

The summer holiday season — traditionally a period with low volatility — ends this week. What will be on investors’ minds when they get back to work? No doubt, Category 4 Hurricane Harvey is well on their radar, with its possible impact on the energy markets. Also, the news agenda is heavier than last weeks, with a lot of US high-impact economic data to be reported during the week. On Wednesday, the second-quarter GDP reading will be of particular interest. On Thursday, July inflation data. And on Friday, the focus of investors will be on the nonfarm payrolls data (a.k.a. the jobs report). And then there are the worries about car sales, and the looming debt ceiling debate, and North Korea. Did we forget anything? It’s usually what you don’t think of, that moves the markets most…

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US stock markets closed mixed Friday. The Dow gained 0.14%, the S&P 500 added 0.17% and the NASDAQ, weighed down by earnings, finished narrowly lower: -0.09%. For the week, all indices were once again firmly in the black. The Dow gained 0.64%, the S&P 500 rose 0.72% and the NASDAQ closed 0.79% higher. Though the Dow still didn’t manage to climb back atop the 22,000 level, it did manage to squeeze out its fifth-best daily performance so far this year on Tuesday. Also that day, the S&P 500 and the NASDAQ posted their fourth- and third-best daily performance of the year, respectively. Volatility showed a V-pattern Friday morning, to ease substantially in the afternoon. The VIX closed 7.77% lower. As a result, UVXY ETFs dropped 5.56% and XIV ETNs gained 2.88%.
Danny Daredevil, who seemed to be heading back toward an RSS of 100% Thursday, had to take a step back, resulting in an RSS of 82%. His long anticipated ‘moment’, a significant rise in volatility in combination with a well-timed trading signal, is now long overdue. But when it comes, Danny will be back into triple digit RSS’s before you know it. Adventurous Anny is still keeping a cash position. Her RSS remains at just below 4%. Solid Suzy and Lazy Larry profited from the rise of XIV ETNs. Their RSS now stands at 22%.
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

82.19%

-54.81%

-58.15%

44%

Adventurous Anny Cash 6 March 2017

3.84%

3.84%

-25.11%

8%

Solid Suzy XIV 6 March 2017

21.96%

21.96%

-2.56%

52%

Lazy Larry
XIV 6 March 2017

21.96%

21.96%

-2.56%

52%

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

 

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René planned to take a selfie in the forest.
Just as he pressed the self timer button on his camera, a tree had the unspeakable effrontery to grow in his way.
Trees these days…
They really do get into these tricks of theirs.