The current signal on the VIX Volatility Model (VVM) is up +11.5% in just a few days at the time of this writing using volatility ETF SVXY (see date/time stamp to this email). Should the market trend higher, so should the model's gains on this current buy signal. Yes, the model is volatile, thus I have recently put in place additional significant fail-safe rules into the model that are discussed below which dramatically improve the model's profit/loss. Extensive backtests and actual money tested real-time, under fire is proving out. That said, always remember past performance is no guarantee of future results.
Some examples of the fail-safes in action (see VIX Volatility Model (VVM) reports for original signals here https://www.virtueofselfishinvesting.com/reports):
Buy signal on 8/27/15 = Instead of a loss of -10.2%, you would have been stopped out at a loss of -1.5%.
Sell signal on 8/31/15 = You would have closed out the trade on 9/1/15 for a two day gain of just over 20% using VXX, the 1x ETF. As I remarked in a previous email update to members, taking at least partial profits when you have such huge profits in such a short time is wise.
Sell signal on 9/4/15 = Instead of a loss of -5.3%, you would have been stopped out at a loss of -3.6%.
Similar improvements apply to the other signals. Since the signals can be fairly frequent, profits in backtests over just a few weeks have been substantial, even in a largely trendless year such as this one. The key is in taking advantage of the volatile moves in volatility-based ETFs such as SVXY, VIXY, XIV, and UVXY. The fail-safes keep losses to a minimum while profitable signals are often far greater.
The most recent buy signal on 10/9/15 went to cash on the same day as its sell stop was hit for a small -1.5% loss. But with the new fail-safe rules in place which sometimes allow for buying back a position after a small (typically around 1% or less) loss, you would have bought back the position the same day. Price bought: 29.15. Current price: 32.56. Gain: +11.5%.
After the model has more good signals under its belt, it will go live. Stay tuned. Until then, we will update members using the beta version with real-time emails as the signals come.
This information is provided by MoKa Investors, LLC DBA Virtue of Selfish Investing (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2024 MoKa Investors, LLC DBA Virtue of Selfish Investing. All rights reserved.
