Market Lab Report - FEAR is a four-letter word: VIX Volatility Model (VVM) IMPORTANT UPDATE 9-8-16

Published : September 9 2016 at 9:42 ET

Q: Worried about one of the many market bubbles bursting so we replay the financial disaster of 2008 or worse? Answer: VIX Volatility Model (VVM) can beautifully exploit volatile markets with its profit-taking strategies for fast gains. 

Q: Worried about missing the next uptrend? Answer: VVM has had a number of large gains this year partly due to implementation of profit-taking strategies, but two large gains were due to capturing uptrends this year, one +23.2% gain earlier this year, and its current signal which is closing in on a +40% gain. Members could take partial profits here.

Q: Frustrated with trendless markets? Answer: VVM can profit even when the stock market isn't going anywhere. The S&P 500 has been trading sideways since mid-July but VVM is up handsomely over the same period. 

To give investors a better sense of the signals issued by the VIX Volatility Model (VVM), below is a graphic that illustrates how VVM takes advantage of volatile markets via its profit-taking strategies. Look for the red buy signal 'B'. This means profits of at least 14-15% were achieved on buy signals which activated the profit-taking strategy. This year, there have been six such signals. 

That said, patience is required at times when VVM's fail-safes kick in which are designed to limit losses. This can result in a number of whipsawed trades. But you dont go from zero to big profits in a straight line. 

In backtests going back many years, VVM has made huge gains by capitalizing on volatile markets such as 2000-2002, 2008, the flash crash of 2010, 2011, and even sideways markets with inherent volatility such as 2015. That said, the testing phase was not without its growing pains as the fail-safes needed to be fine-tuned as well as profit taking strategies implemented.

As for riding uptrends, its current signal is closing in on a +40% gain from buying the instrument XIV. 

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