VIX Volatility Model - Model switches to BUY on September 14, 2016 - Round 2
The Volatility Model has switched to a BUY signal. This means if the model was on a SELL signal, to sell any SELL signal related ETFs such as XIV, and buy ETFs such as VXX, VXZ, UVXY, etc (see list below). Price of VXX at time email sent: 40.55 (I will be using VXX as the standard even though the results table reflects using UVXY).
Note, if you decide to buy UVXY when it is, say, 1% above or below the price at the time the email was sent, this would be roughly 0.5% if you are buying a 1x ETF such as VXX.
For purposes of record keeping, UVXY will be used as the benchmark on BUY signals. This means gains and losses are twice that of a 1x ETF such as VXX. For those who are more risk averse, buying VXY (0.5x) or VXX (1x) are better choices. Alternatively, one can position a smaller size to reduce risk.
When the model is on a BUY signal, buy ETFs such as VXZ (0.5x), VIXY (1x), VXX (1x), TVIX (2X), UVXY (2X). The model thus believes the general markets will move lower thus volatility will increase.
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