Clik here to view.
Using Volatility as an Investment Hedge
The past fifteen years have been a very volatile time for the stock market. Not only has the market had large corrections and bear markets it has also had huge rallies and bull markets. These swings...
View ArticleClik here to view.
Near Term Risk Rising
One of the charts that we like to keep an eye on to determine the amount of perceived risk in the market is the ratio between one month volatility (VIX) and three month volatility (VXV). When the...
View ArticleMarket Risk Indicator is Signaling
Just a quick note today. Our market risk indicator is currently signaling. We require a weekly close for an official signal so a strong rally tomorrow could negate it. If it is still signaling...
View ArticleClik here to view.
Volatility as a Hedge Update
Here’s an update of a post I did back in May where we showed how a volatility ETF (XVZ) can be used as an easy way to hedge when market risk is high. I use our Market Risk Indicator to signal that...
View ArticleClik here to view.
More Thoughts on the Volatility Hedge
I got a few questions about the volatility hedge strategy that I mentioned yesterday that provoked a few thoughts I thought might interest you. The first thought is that there is no need to go all...
View ArticleClik here to view.
Market Update
Today didn’t do much damage to our core indicators, however, two of the four components of our Market Risk Indicator are warning. A third component is very close to warning and it won’t take much to...
View ArticleClik here to view.
Short Covering Rally
In late September I showed a chart that I use for general clues about the market. It compares a short of the S&P 500 Index (SH), an actively managed short fund (HDGE), and mid-term volatility...
View ArticleClik here to view.
Softening Hedge
Our Market Risk Indicator cleared its warning this week. However, our core measures of market health are still mired in negative territory. As a result, we’ll be softening the hedge in the hedged...
View ArticleClik here to view.
Market Risk Warning
My market risk indicator is warning today. That changes the portfolio allocations of the Long / Short portfolio and the Volatility Hedged portfolio to 50% long high beta stocks and 50% aggressively...
View ArticleSoftening Hedge and Rebalancing
With the sell off this morning I’m taking the opportunity provided by a spike in volatility to take some profit from the hedge and soften it in the Long / Short Hedged portfolio. I’m taking all profit...
View ArticleClik here to view.
Year of Whipsaws
2015 was a year of whipsaws for the core portfolios. Take a look at the chart below and you’ll see the allocation changes throughout the year. Green lines represent adding exposure, yellow reducing...
View ArticleClik here to view.
It’s Ugly Out There
Wow. What a week. Like the market all of my core health indicators got hammered. They are now all deep in negative territory. I’ll let the chart speak for itself. One thing of note is that my market...
View ArticleClik here to view.
Market Risk Clears
My market risk indicator cleared its warning this week. As a result, the volatility hedge will go 100% long. In addition, the core portfolios will remove their aggressive hedge and replace it with a...
View Article
