22 September 2017: Ping pong

Rocket Man and Golf Man are still playing their verbal ping pong game. And most of the time, their words cause nothing more than a ripple in the pond. But some days, investors react quite heavily to them. Today and the upcoming trading days might be days of the latter kind. With its decision to start unwinding its balance sheet, the Fed has set up an environment in which investors feel a bit more touchy than they have been feeling lately. Under those circumstances, not much is needed to send stock prices down and volatility up. We are not sure if a good weekend’s rest will be able to erase that irritable feeling. In case North Korea decides to fulfill its ‘promise’ to test another hydrogen bomb, it will not matter at all. Either way, as we predicted before, we are up for a hot start of autumn.

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US major indices closed lower on Thursday, retreating slightly from all-time highs. These modest losses came not unsurprisingly after the Fed’s announcement of its plan to start reducing its massive balance sheet in October. The S&P 500 lost 0.30%, the NASDAQ slipped 0.52% and the Dow closed 0.24% lower. The latter index recorded a loss for the first time in ten trading sessions. Volatility eased further: the VIX closed at 9.67 points (-1.12%). UVXY ETFs gave up Wednesday’s gains and closed 0.13% lower. XIV ETNs recorded a minor gain: +0.01%.
Danny Daredevil had to take a small step back. His RSS remained at 33%, however. Adventurous Anny is still holding cash. Solid Suzy and Lazy Larry were virtually unchanged. Their RSS remained just above 40%.
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

33.22%

-66.95%

-69.40%

18%

Adventurous Anny Cash 6 March 2017

3.84%

3.84%

-25.11%

7%

Solid Suzy XIV 6 March 2017

40.03%

40.03%

11.87%

85%

Lazy Larry
XIV 6 March 2017

40.03%

40.03%

11.87%

85%

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

 

RS_v05-smallRené’s Reflections @ Friday: Catching the Big Fish

It’s Friday again and I am supposed to shift into reflective mode, in order to close the week’s blog in a contemplative manner. Usually, I sit down Thursday late at night, or Friday early in the morning before the birds wake up. Then I start writing about whatever pops up in my head first, provided that it is something that feels worthwhile to write about. It rarely happens that I stare at a blank screen longer than a minute or two, before the first idea bubbles up from wherever it is that ideas bubble up from. But today, nothing happened. Absolutely nothing, zilch, zip, nada! I was shocked. If I only knew where that bubbling source was to be found, I would go there and get it myself. Yes, I’ve read David Lynch’s Catching the Big Fish, but somehow that didn’t cut the mustard for me.
So, does this mean I am encountering the infamous ‘writer’s block’ or ‘blank page syndrome’? At first sight, it would seem so. But then again, the absence of ideas popping up in my head apparently didn’t prevent me from writing, or did it? It makes me wonder, where did this text just come from? And where do ideas come from? I guess I should read Catching the Big Fish once again. Who knows what else there is to catch.