OUT XIV for Wednesday....01.09.18

It was a wild volatility ride today with XIV swinging $3 , 1.50 up at the open and down 1.50 at the close. We didn't like the sell off at the open after hitting R1 and took the afternoon pop to 145.75 to close out our trade when XIV failed to get back to R1, but I was being overly cautious and wanted to bail on the position if any evidence of weakness appeared...   (see lower chart.)
According to the model metrics we lost money today, but that's based on closing prices.
If normal railing stops were in place the actual trade close would have been in the neighborhood of 145.25, therby still booking a nice gain for the day.. 
Note that the current Fast ALERT signals are in sync but downslope.....equals caution.

Long XIV for Tuesday...01.08.18

The weekend Ponzo updates suggest weakness in QQQ but that wasn't the case today and at the close XIV is in a vested position for tomorrow.  I actually make most XIV and VXX trades in the after hours markets where dips and peaks tend to be more opportunistic, depending on the current signal.
The model was not vested for today's gains but the volatility skew has now turned more attractive and the 2 Day Fast ALERT chart is back in synce and bullish along with the Pivot Alert.

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SPY and QQQ Ponzo Forecast Diverge....01.07.18

We haven't looked at the Ponzo Forecasts for 6 weeks so the beginning of the new year seemed like a good time to check in with our market forecasting tool that was deadly accurate last year.
And we have a little surprise....SPY is actually looking more robust than QQQ going forward for the next 18 weeks.  Generally speaking the QQQ lead momentum up and SPY follows.  However the Qs have been on fore lately, especially the FANG gang, and we may be seeing some risk mitigation to relative values of SPY vs QQQ (especially tech) as we progress into January...typically one of the strongest months of the year.

XIV Signals Back to Vested....01.03.18

XIV was up .4% in after hours trading, a perfect reversal of yesterday's after hours action.
Today's closing signal is back to vested as market volatility continues to slide with the VIX closing under 9 2 days in a row for the first time ever.  We may see some risk selling tomorrow but contrary to the historical bias for Fridays' to be down days, the last couple months have seen bullish surges on more that 50% of Fridays.  It's a new market.
Although the XIV signal is vested I would feel more confident if the TrendX and Fast ALERT were upslope in sync rather than divergent.  Accordingly, I have scaled back 50% for tomorrow.

XIV signal goes to cash...01.03.18

XIV is down .5% in after hours trading and the trending following model MTF7 is now flashing a cash signal for tomorrow....following through on the divergent TrendX versus the Fast ALERT signal mentioned yesterday.

CORRECTED M model for XIV...01.02.18

As I was pondering the recent lagging performance of the XIV model I realized that I had been posting the mean reversion MMR7 model when I meant to post the trend following MTF7 version.  I've adjusted the model ID in the title line and its apparent in the relative performance charts of the two models that trend following is clearly the tactical choice...at least for the time being.
Note the differentials in equity curve, total risk exposure and total net returns between the models using the same limit stop and volatility settings.
Note also the Fast ALERT is quickly going to a CAUTION mode.
Time allowing, I will post daily signal updates of this model this week before the close.
(Disclaimer:  not a recommendation to trade...signal provided FYI and for educational purpose only.)

M Chain @ EEM....01.01.18

This is the 8 parameter model as opposed to the 7 parameter model profiled last week.  And for this week's entertainment we'll track how the model delivers with EEM, the broad based, high volume, narrow spread, emerging markets IShares ETF.
Over the course of 250 trading days the model only traded 125 times with 72 wins and  49 losses.
Note that the 2 Day Paradigm signals (TrendX and Fast Alert) are now in opposition as of Friday ...suggesting we should bide our time until they sync up again.