VIX Volatility Model - Update on signal - Switch to CASH

Published : June 26 2016 at 14:10 ET

The VVM has switched to CASH based on the "IMPORTANT UPDATE" email you just received. Members should sell any sell signal related ETFs/ETNs such as XIV at Monday's open.

The next signal change given by VVM will be actionable as this will represent the start of real-time results under all three material changes in place as discussed in the prior "IMPORTANT UPDATE" email. 

The tested buy signal on 6/24/16 was due to the VIX spike strategy discussed in the "IMPORTANT UPDATE" email which has been an ongoing study that is ready to be integrated into the VVM. The results table shows all three material changes now in place as discussed, thus the buy signal on 6/24/16 was not live. Though a number of earlier trades were live, I've used exact figures for fail-safes thus it is best to call the results up to the close of the 6/24/16 buy signal as backtested. 

While the profit taking strategies make a material difference to the results, always keep in mind that past performance can never guarantee future results as markets always live to surprise and are ever-changing. Indeed, our research studies are always ongoing, thus all stock and ETF trading strategies remain fluid as always as the only constant is change.

That said, with greater volatility comes potentially greater profits as the periods of 2000-2002, financial collapse 2008, flash crash 2010, S&P downgrade of US bonds August 2011, and early 2016 have demonstrated.

Some of you who were members back in 2011 will remember when a very early version of the model scored more than 550% in those months by being on the right side of many highly volatile trades. Unfortunately, no fail-safes were in place and those huge gains were eventually wiped out. Today, the fail-safes, together with the profit taking strategies, make a material difference in backtests to VVM and in recent real-time trades tested using real capital as risk/reward is vastly improved. 

This information is provided by Virtue of Selfish Investing, LLC (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, LLC. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2016 Virtue of Selfish Investing, LLC. All rights reserved.