One Year Portfolio Performance Update

Now that the subscriber newsletter is available on a free trial basis, I no longer see the need to detail some of the content that is available in the newsletter. The format is essentially unchanged from the beginning of the year, but since I have had several requests to provide quarterly updates of the performance of the VIX and More model portfolios, I will use this space to do just that.

Technically, the first quarter does not end for one more day, but since today is the one year anniversary of the launch of the newsletter, I thought it would be an ideal time to update the portfolio performance data.

The graphic below shows the 2008 and 2009 performance data for the three VIX and More portfolios. These are long-only portfolios of individual stocks that do not invest in ETFs or options and are rebalanced only on weekends. I call the top two portfolios Focus portfolios because each portfolio is limited to only five stocks. The Focus Growth 2 Model Portfolio was launched on August 31, 2008 and utilizes the S&P 500 index as a benchmark. The Focus Growth 2 portfolio was actually beating the benchmark until last week, when the top holding, DRDGOLD (DROOY), suffered a sharp decline.

The second Focus portfolio, Focus Foreign Growth, has been a standout performer, particularly in 2009. Launched on March 30, 2008 in the initial newsletter, this portfolio has been heavily invested in China in recent weeks, where top holding Shanda Interactive Entertainment (SNDA) has helped propel the portfolio to an 8.8% advantage over the benchmark EAFE (Europe, Australasia and the Far East) Index ETF (EFA).

The big success story has been what I call the Stock of the Week ‘Sequential Portfolio,’ whose name reflects the fact that the ‘portfolio’ consists of only one stock. Each selection is retained in the portfolio for one week only and is automatically replaced the following week, regardless of performance. Also launched on March 30, 2008 in the initial newsletter, the SOTW has gained a remarkable 101.6% during a period in which the benchmark S&P 500 index has declined more than 41%. Some of the top performers in the SOTW have been JDAS (+18.5%), WTI (+15.5%), MAXY (+14.5%), CCOI (+12.3%) and SQM (+11.0).

For those who may be interested, I will update the EVALS performance data tomorrow after the close and then update both these three portfolios and EVALS at the end of each subsequent quarter going forward.

Announcing Blogger Triple Play

While Direxion 3x ETFs have been a big hit since their launch back in November, deep down I have always thought I could do better. So today I am delighted to announce that VIX and More has joined forces with bloggers extraordinaire Jeff Pietsch of Market Rewind and Rob Hanna of Quantifiable Edges with a new 3x offer, the Blogger Triple Play.

For an annual subscription of $820, the Blogger Triple Play promises a savings of $272 (25%) off of the combined monthly subscription prices of the three subscriptions if they had been purchased individually.

Included in the package is:

1. Market Rewind – How does your portfolio stack up to the market? What's working now? Take a deep-dive each night into over 170 ETFs while maintaining a broad perspective over twelve major asset classes with Jeff Pietsch’s ETF Rewind Pro. If that weren't enough, actionable model portfolio ideas, mechanical timing signals, nightly commentary, pairs trading, and custom portfolio correlation and optimization analytics are all included!
   
   
2. Quantifiable Edges – Start your week right with Rob Hanna's Quantifiable Edges Silver Subscription. Understand how recent market action compares historically. Get more detailed research than has ever been provided on the blog. Give yourself and your trading a Quantifiable Edge.
   
   
3. VIX and More – My weekend subscriber letter goes beyond the blog to provide a global overview of what is moving the markets, from geopolitical events to macroeconomic issues and fundamental analysis, along with a detailed assessment of volatility and market sentiment. The newsletter is comprehensive in scope and focuses on all asset classes.
   

As part of the three-day trial period, you will receive three evening editions of Jeff's ETF Rewind Pro, as well as the most recent weekly subscriber letters from Quantifiable Edges and VIX and More for evaluation.

The annual subscription fee of $820 (about $68 per month) clears through Market Rewind's secure Paypal site under the Maple Park Management, LLC name. This inaugural pricing will not last! You aren't likely to find a better bargain for as much of a diverse informed edge anywhere else on the web. Why not give it a try?

Note: Each service is subject to the respective author's disclaimers and notices.

Subscriber Newsletter Features and Portfolio Performance Through December 2008

As I mentioned previously, I continue to make enhancements to the subscriber newsletter. The most important change is that instead of publishing two very different editions on Wednesday and Sunday, I am now combining all the content into one weekly issue, with new content.

Starting with today’s the newsletter, the Market Recap and Commentary section is being expanded into a more comprehensive The Week in Review and separate Market Commentary section. There will be an increased emphasis on a global perspective, macroeconomic issues and fundamental analysis.

Another new section, Volatility Update, tracks and analyze changes in the VIX, the VIX and More Global Volatility Index, the VXV, and a number of related indicators, such as moving averages in the VIX, historical volatility in the SPX, the VIX:VXV ratio, etc.

The new VIX and More Subscriber Newsletter will be published on Sunday evenings going forward, with the following ‘permanent’ sections:

1. The Week in Review
2. Market Commentary
3. The Week Ahead: What to Look For
4. Market Sentiment (using a proprietary Aggregate Market Sentiment Indicator)
5. Volatility Update
6. Asset Class Outlook (short, intermediate, and long-term outlook for ten asset classes)
7. Weekly Feature(s)
8. Current Investment Thesis
9. VIX and More Focus Model Portfolios
10. Stock of the Week

As the newsletter and the economy are undergoing some dramatic changes, I am now making the newsletter available on a free trial basis. In order to receive a free trial, just click on the “Monthly Subscription: Subscribe” button in the upper right hand corner of the blog and follow the instructions. The free trial lasts for 14 days. Readers who elect not to cancel after the 14 day trial period will be billed at a rate of $30 per month.

Also, as a gesture of appreciation to former subscribers, I will add one free month to any subscriber who chooses to re-subscribe.

In response to reader requests, I will also be creating a detailed glossary to provide background on terms, abbreviations, acronyms and tickers I frequently refer to in the newsletter. The beginnings of this glossary can be found in the post below.

For the record, some of the December features included:

• 2008 Volatility Highlights and Observations
• What the VIX Indicates Right Now
• Equity and Credit Risk Both Dropping Rapidly
• Housing Prices, Inventory, and Net Worth
• Strong Divergence Between Investment Grade and High Yield Corporate Bonds
• VIX Term Structure Shows Changing Evolution of Volatility and Risk Expectations
• Further Research into the Spread Between the VIX and the Historical Volatility of the SPX
• A Closer Look at VIX and SPX Divergences
• Week By Week Asset Class Year in Review
• Financials Lagging, Consumer Discretionary Stocks Leading
• Options Expiration Income Strategy
• A Buy-Write Strategy Approach
• New Feature: Volatility Update
• Sector Strength in the Recent Rally
  

Since their launch (3/30/08 for the Focus Foreign Growth and Stock of the Week, 8/31/08 for the Focus Growth 2), the portfolios (equities only, long only) have performed as follows:

If anyone has any additional questions about the subscriber newsletter, please feel free to email me at bill.luby@gmail.com

VIX and More Subscriber Newsletter Glossary

AMSI – Aggregate Market Sentiment Indicator: a VIX and More proprietary sentiment indicator that incorporates components of volatility, put to call data, market breadth, volume and other factors

DJIA – ticker/abbreviation for the Dow Jones Industrial Average: the U.S. equity index that is most widely tracked by the media and the general public

EEM – ticker for an ETF that tracks the MSCI Emerging Markets Index

EFA – ticker for an ETF that tracks the MSCI EAFE Index of developed countries from Europe Australasia and the Far East, which excludes stocks from the U.S. and Canada

EMA – exponential moving average: applies an exponential weighting so that most recent data points in a series are given greater weight in the calculation of a moving average

ETF – exchange-traded fund: a group of stocks that often resemble a mutual fund in composition, but can be traded much like a stock during the trading day

FOMC – Federal Open Market Committee: plays a lead role in establishing U.S. monetary policy by setting target Fed Funds rates

GVIX – Global Volatility Index: a VIX and More proprietary index which is derived from a weighted average of the implied volatility in options for equities in the 15 largest global economies

HV – historical volatility: a measure of actual volatility in the price of security over a specified period of time, typically calculated in terms of standard deviations from the mean of a data series

IV – implied volatility: a measure of estimated future volatility in the price of a security as derived from options prices

NDX – ticker/abbreviation for the NASDAQ-100 Index: an index of the largest domestic and international non-financial securities listed on The NASDAQ based on market capitalization

RUT – ticker/abbreviation for the Russell 2000 Index: measures the performance of the small-cap segment of the U.S. equity universe

SMA – simple moving average: unweighted mean of a data series

SOTW – stock of the week

SPX – ticker/abbreviation for the Standard and Poor’s (S&P) 500 Index: de facto standard of U.S. equity indices for investors

USO – ticker for the U.S. Oil Fund, an ETF that tracks the movements of light, sweet crude oil, a.k.a. West Texas Intermediate

volatility crush – a dramatic decrease in implied volatility, often associated with the passing of a major news events such as earnings or an FDA decision on a drug application

VXV – ticker for the CBOE S&P 500 3-Month Volatility Index, which measures the expected 93 day volatility that is implied by options in the SPX

XHB – ticker for the homebuilders sector SPDR, an ETF

XLF – ticker for the financial sector SPDR, an ETF

XLY – ticker for the consumer discretionary sector SPDR, an ETF

Subscriber Newsletter Features and Portfolio Performance Through November 2008

Largely as a result of reader input, I continue to make enhancements to the subscriber newsletter. At the beginning of January, I will be rolling out more new features. The one I am most excited about is a weekly section on volatility that will appear in the Sunday edition of the newsletter. This section will track and analyze changes in the VIX, the VIX and More Global Volatility Index, the VXV, and a number of related indicators, such as moving averages in the VIX, historical volatility in the SPX, the VIX:VXV ratio, etc.

As currently constructed, the Sunday edition of the newsletter continues to incorporate a number of regular weekly sections, including a market commentary, asset class outlook, market sentiment update, current investment thesis, and week in review.

Wednesday’s edition is more feature-laden and has traditionally been devoted to subjects such as ETFs, sector rotation, volatility, market breadth, and related market sentiment-related issues.

Some of the November features from the Wednesday edition included:

• McClellan Oscillator Shows Strong Breadth Supporting the Bounce
• Put to Call Ratios Suggest Bullish Reversal Soon
• ETF Bottom Fishing Food for Thought
• Top Performing Sector ETFs
• Bullish Explosion in Spread Between VIX and 20 Day Historical Volatility in SPX
• What’s Working? Put to Call Ratios and the VIX-SPX HV Spread
• Credit Default Swaps and Sovereign Debt Problems
• Double Tops in the VIX (excerpted on the blog as The Significance of Double Tops in the VIX)
• VIX Term Structure: No End to a 45+ VIX?
• Oil: An Alternative Scenario
• Oil and Energy Stocks
• Analysis of Weekday Performance in the Most Recent Bearish Leg
• Outlook: More Opportunities Ahead for the Shorts
• Short Timing Triggers Using RSI
• Shorting with Direxion -300% ETFs
• Extreme Implied Volatility and Bear Put Spread Opportunities
• Implied Volatility and Corporate Themes
• Cisco’s Guidance Is a Shot across the Bow for the Technology Sector

Since their launch (3/30/08 for the Focus Foreign Growth and Stock of the Week, 8/31/08 for the Focus Growth 2), the portfolios (equities only, long only) have performed as follows:

If anyone has any additional questions about the subscriber newsletter, or is interested in reviewing a sample, please feel free to email me at bill.luby@gmail.com

Subscriber Newsletter Features and Portfolio Performance Through October 2008

Thanks to reader input, the subscriber newsletter has undergone several enhancements during the past month.

The Sunday edition of the newsletter continues to incorporate a number of regular weekly sections, including a market commentary, asset class outlook, market sentiment update, current investment thesis, and week in review.

Wednesday’s edition has traditionally been devoted to subjects such as sector rotation, volatility, market breadth, and related market sentiment issues. Recently, I have expanded the focus to include a more global emphasis, incorporated more macroeconomic and fundamental issues, discussed specific VIX options trading opportunities, and highlighted selected stocks and ETFs.

Some of the October features included:

• Sectors Most and Least Likely to Lead a Rally
• Hedge Fund Selling and Capitulation
• Bottoms and Price Discovery
• A Simplified Approach for Bottoms and When to Buy
• Combining the VIX and the TED Spread
• Should You Go Long at Volatility Extremes? A Look at the Nikkei (excerpted on the blog as Should You Go Long at Volatility Extremes? A Look at the Nikkei 225)
• VIX:VXV Ratio Waiting for Confirmation
• How to Trade the VIX
• VIX Bear Call Spreads
• VIX Bull Put Spreads
• Capturing Volatility in VIX Options: A Trade Idea
• Beaten Up Large Caps on the Move
• Some Oversold Stock Ideas Using the DeMarker Indicator
• What the Big Boys Were Buying When the Market Rallied
• The Lack of 52 Week Highs in the S&P 500 Index
• Evaluating Prospects for a Housing Market Turnaround – Inventory
• Evaluating Prospects for a Housing Market Turnaround - Affordability
• Biotech and Health Care Stocks with Offensive and Defensive Potential
• Recent Sector Weakness
• Overbought and Oversold ETFs

Since their launch (3/30/08 for the Focus Foreign Growth and Stock of the Week, 8/31/08 for the Focus Growth 2), the portfolios (equities only, long only) have performed as follows:

If anyone has any additional questions about the subscriber newsletter, or is interested in reviewing a sample, please feel free to email me at bill.luby@gmail.com

Subscriber Newsletter Features and Portfolio Performance through September 2008

One of purposes of the subscriber newsletter blog is to provide a space in which to summarize the recent content in the newsletter and update the performance of the model portfolios that I make available to newsletter subscribers.

The newsletter continues to incorporate a number of regular weekly sections, including a market commentary, asset class outlook, market sentiment update, current investment thesis, and week in review. Features generally focus on subjects such as sector rotation, volatility, put to call ratios, market breadth, volume, and other sentiment-related issues. Some of the September features included:

• An Overview of Capitulation
• Using the Force Index to Measure Elements of Capitulation
• Evaluating the Health of the Credit Markets
• What Happens When the VIX Spikes Over 40
• More on SPX Performance After VIX Spikes
• VIX:VXV Ratio and VIX Futures
  
• VXV Volatility as a Market Timing Signal
• Putting Highs and Lows in Historical Perspective…and Looking Forward
• Gold Miners Extremely Cheap Relative to the Commodity
• SPX Has Now Pulled Back Over 50% From 2002-2007 Bull Move
• A Conceptual Framework for Volatility Events
• Event Volatility vs. Structural Volatility
• The Rise of the Russian Bear
• Extreme Stress in Asia, Particularly in South Korea

Since their launch (3/30/08 for the Focus Foreign Growth and Stock of the Week, 8/31/08 for the Focus Growth 2), the portfolios (equities only, long only) have performed as follows:

If anyone has any additional questions about the subscriber newsletter, or is interested in reviewing a sample, please feel free to email me at bill.luby@gmail.com