Sunday, October 13, 2013

VEGA ALL IN...10.13.13

Here's a slight variation of the VEGA model that might be thought of as a VEGA bull with a hedge.
SH (SPY inverse) has been pulled from the mix and replaced with SSO (SPY ultra long).
This change gives us greatly amplified bullish gains WHEN THE P6 and TRENDX ARE UPSLOPE. 
To provide a modest downside buffer AGG and XLU are retained in the portfolio...which is always comprised of these 6 components. 

When its hot its hot..when its cold we're in cash. The first thing that comes to mind is probably "That's a lot of trades".'s not.  The model tends to stay either vested or in CASH for extended periods of time so instead of frequent rotational trades we just trade the portfolio as a basket.

Depending on your broker and whether your trades are charged on a per share basis or a single transaction fee, managing the portfolio may turn out to be a lot simpler than watching the occasional periods of momentum whipsaws and rankings fluctuations.

There are multiple tactics to gain some peace of mind with a capital portfolio in volatile times like these...this is just one example.  It would be dream come true if we could create a no fee portfolio that would mimic these results and I've got some ideas in that direction that will be discussed next week.