IMPORTANT UPDATE ON VIX VOLATILITY MODEL (VVM)
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.
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