VIX Volatility Model - Update on taking partial profits 8-11-16

Published : August 11 2016 at 12:16 ET

VVM is closing in on a 30% gain on the current sell signal. I mistakenly mentioned in today's webinar that profits have been as high as +56.3% from a sell signal issued in September 2010 which lasted roughly 6 months as the markets were in a tight uptrend. While this was factually correct, is was not the largest gain on a sell signal. The largest gain from a sell signal issued by VVM near the end of 2011 which lasted nearly 5 months for a gain of +87.9%.

Thus the current sell signal could last a lot longer. Unfortunately, the future does not exist so it is impossible to know ahead of time how profitable a signal will be. Thus when to take partial profits comes down to each member's risk tolerance/position sizing profile. 

Quantitative easing is on full bore but heightened levels of volatility could be around the corner as a number of serious political and economic headwinds remain.

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