VIX Volatility Model - UPDATE on both MDM and VVM

Published : July 14 2016 at 10:19 ET

Both models remain in CASH though both stand at the ready to switch. The market remains extended as do stocks which suggests an MDM sell and a VVM buy signal.

But QE remains the "growing wilder by the day" wildcard. While the Bank of England did not lower rates when its members met today, it has room to do so in the future. Other central banks have also pledged QE would continue to flow with further reductions in interest rates especially in the event of any liquidity issue caused by Brexit, the EU, or otherwise. This gives the markets comfort which, in time, may make the markets comfortably numb. Nevertheless, this suggests an MDM buy and a VVM sell signal.

So at present, CASH is the best place to be until odds tilt in favor of a particular direction. Stay tuned. 

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